From the Bog to the Boardroom

Driving along the winding road leading up to Ocean Spray's sprawling 99,000 sf headquarters, there was really only one thought on my mind. Now this is what the headquarters of a global, multi-national beverage company should look like.

Envision cranberry bogs on both sides of the road, surrounded by a maze of rolling green hills, walking trails, ponds and majestic wild life. At the end of the road, the actual office looms - a beautiful white structure more closely resembling a wealthy 19th century estate than a global corporate headquarters. The building makes you instantly forget you are at the hub of an internationally known juice company and not the scene of a lavish wedding.

With this in mind, you'd think Ocean Spray employees would appreciate their grandiose home each and every day. This isn't a faceless building on an urban street. It's an ornate tribute to our native fruit. Yet, CEO Randy Papadellis admits he often forgets to show proper admiration for the Lakeville, MA headquarters.

"I don't appreciate this place enough," confesses Papadellis, tireless leader of the globally known $1.9 billion agricultural co-operative, producer of the world's most famous cranberry juice. Then as if it's an official part of his ever-changing agenda, he remarks, "I'm going to try to do that more. I forget how lucky we have it here sometimes."

Chief Alignment Officer

This kind of do-it-all determination has come to define Papadellis since his elevation to CEO in 2003. He's not just Chief Executive Officer, he also refers to himself as Chief Alignment Officer. It takes an alignment officer to keep the co-operative's approximately 800 growers (including 150 grapefruit farmers) on the same page as the vision of the company's Board of Directors. In the unique co-operative structure, the growers individually own their farms, supply the fruit and are the shareholders of the company.

A few years back, the last phrase you would've used to describe the growers was "on the same page." After the price of cranberries dropped significantly from 1999-2004 due to flattened demand and increased supply, half of the growers wanted to sell the Ocean Spray brand to Pepsi and eliminate the independent co-operative structure. Conversely, the other half wanted to keep Ocean Spray as it was and rebuild the brand under new management.

"When I came in as CEO, I sat down with the board and I said, `I know how this picture finishes. We're going to write a different ending to this picture. The first thing we are going to do is we are going to get alignment on exactly what our growers want'," recalls Papadellis, who at the time was the fourth CEO in four years at Ocean Spray.

Getting alignment was where his predecessors had failed. After much deliberation spanning nearly a year, there were two possible end solutions: a sale to Pepsi or to maintain the independent co-operative structure with revamped management.

"It was literally a 50/50 split," he says. "We said whoever chose the losing option had to get on board with the winner." The vote ended up being 52-48 vote, with the majority having faith in the management. A possible sale to Pepsi was averted.

Approximately six years after the fact, Papadellis says the growers who were against maintaining independence are now management's biggest supporters. Still, for the Chief Alignment Officer, the mission to align the growers never ends. A native New Englander and father of two, Papadellis spends much of his time on the road. He finds himself at town halls and community centers, attempting to inform growers on the new happenings at Ocean Spray.

"If it ain't broke, break it"

One of the reasons Papadellis is on the road a lot has to do with the fact cranberry bogs take up to five years to mature. Thus, Ocean Spray is always coming up with new ideas and products based on consumer insight to stay ahead of the game.

"I have always lived with the mantra: `If it ain't broke, break it,' " states Papadellis, who got his MBA in marketing and finance from Cornell and a bachelor's in business and government from Colby College. "Complacency is the biggest risk of any successful business. We are very successful today. We're going to grow a profit of 20 percent. Not too many companies can grow a profit by 20 percent in a recession while increasing their top line by eight or nine percent."

Interestingly enough, change is sometimes not planned but rather stumbled upon. Take for instance the unusual story of Craisins®. At first, after the juice was taken from the cranberries, Ocean Spray would pay pig farmers to buy the seemingly useless dried cranberries. The company eventually discovered if they re-infused some of the juice back, the dried cranberries had a terrific taste and could be used for baking ingredients. However, the story of the Craisins® does not end in the baking isle.

"We had them out as snacks in a bowl during a meeting and saw people were just popping them into their mouths. So we asked the question what if we reposition them as a healthy, dried fruit snack. And the rest is history. When they were baking ingredients we use to manufacture 20 million lbs of them a year. Five years later we've had to build four manufacturing facilities, we've invested close to $200 million to build those facilities and we're going to produce 140 million lbs of them. They are the fastest growing most profitable part of our portfolio. And this is something we were paying people to take off our hands," says Papadellis.

Other recent product innovations from Ocean Spray include Cranergy®, a type of cranberry flavored energy drink favored by working moms, Diet Cranberry, to please the calorie free drinking crowd and their latest creation, blueberry juice.

"If you think about it Motts equals apple, Welch equals grape, Tropicana equals orange and Ocean Spray equals cranberry. There is no national brand of blueberry," emphasizes Papadellis. "We asked ourselves the question what if we did to the blueberry what we've done to the cranberry. We've just launched test markets in San Antonio and Indianapolis and if all goes right we'll release regular, light and diet on a national level."

Where's the Cranberry?

Three words - taste, health and heritage - aptly depict Ocean Spray's global message about its cranberry juice. While the taste and heritage parts practically speak for themselves, over the past few years the company has amped up its promotion of the health benefits of cranberry juice and related products.

Traditionally cranberry juice has been associated with curing urinary tract infections. However, cranberry juice can do much more than simply treat UTIs. "Cranberry juice is a natural antibiotic and it can work as immunity," says Papadellis, who even has secret advice to avoid food poisoning.

"If you're ever at a restaurant where you think you might get food poisoning, if you drink a glass of cranberry juice before you eat the meal, there is very little chance of you getting food poisoning. The bacteria you take in doesn't adhere to your stomach lining because it is a natural immunity," he advises.

Ocean Spray's catch phrase: "Taste Good, Good for You," is a derivative of this health promotion. Coupled with a popular set of television ads with two actors portraying cranberry growers, the catch phrase has caught fire.

"The campaign has been a major hit. We have a testing service that helps us evaluate recall and persuasion on advertising. They claim our ad campaign is the most successful they've tested since the `Where's the Beef?' campaign," Papadellis laughs.

The Cranberry Guy

Whether it's joking about those commercials, or talking about Ocean Spray's global strategy to educate the world about a primarily North American fruit, the passion for the business is evident in Papadellis' voice. As a man who says he rarely fails to order a cranberry/club soda beverage at a restaurant and has grown up in the food industry (his parents owned a Greek restaurant in the Boston area), he isn't just another suit with a degree.

When it comes to Ocean Spray, he emphatically wants people to remember those three key words. "Taste, health, heritage. Great tasting, good for you and these things have a great culture," he declares. After hearing him speak fervently and intelligibly about Ocean Spray and cranberry juice in general, you realize one thing. Now this is what the CEO of a globally known beverage should sound like.

To read this story and others check out the June issue of Exec Digital