A Market Analysis for New Opportunities in the Cranberry Industry
Project Director: Nora Ganim Barnes, Ph.D.
Of the approximate 1000 cranberry growers in North America, 500 are in Southeastern Massachusetts. Those growers produce 38% of the cranberry supply and add over 5,500 jobs and $200 million to the Massachusetts economy. While the demand for cranberries has been increasing at a rate of about 3% annually, supply is now increasing at twice that rate (Warsh). As a result, prices have plummeted. From a high of $80 three years ago, prices dropped to as little as $10 a barrel by the end of the 2000 harvest - well under farmers’ average cost of $32 a barrel ("Ocean Spray to Stay…").
A Boston Globe correspondent reports the current situation as the worst crisis in the industry since 1959, when a cancer scare led to a widespread dumping of crops. Regardless of one’s historical perspective, times have changed for Massachusetts' cranberry growers. One important change occurred in 1987, when Wisconsin entrepreneur John Swendrowski pulled out of the Ocean Spray Cooperative to which he had been selling his cranberries, and formed a publicly traded company (Northland Cranberries Inc.). Since then, the dynamics of the cranberry products market have changed.
As new farmers entered the market in significant numbers, the competitive environment turned into a complex arena. Potential markets did open up, but supply outpaced demand. For the first time, large-scale cranberry farming occurred outside Massachusetts and marketing strategies were not yet developed to handle the new competition. Given this environment, the industry was granted some assistance through a market order issued by The Department of Agriculture on July 12, 2000, to reduce crops by an average of 15%. Even with the aid of regulatory production, however, it is essential to increase demand in order to regain a healthy market presence (Bushnell).
This study is the result of an independent effort at the University of Massachusetts Dartmouth, Charlton College of Business, Slade’s Ferry Bank Center for Business Research. Its goal is to evaluate consumer preferences as they relate to the purchasing and consumption of cranberry related products. The University recognizes the importance of an independent market analysis at this juncture. Cranberries are the number one crop in the state, and are an integral part of the economic future of Massachusetts.
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- Cranberry Study (PDF)
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Pictures courtesy of US Department of Agriculture
