Keeping the Owners Aligned

Randy Papadellis spends a big chunk of his working life talking with cranberry growers. Some are small farmers, like the men you see standing knee-deep in red fruit in an Ocean Spray ad. They might be hobby growers with five-acre bogs, or fourth-generation business owners who live by what they grow. Others are managers at companies with vast agricultural holdings.

As members of the Ocean Spray Cranberries cooperative, these 700 growers own the company where Papadellis serves as chief executive officer. “They see themselves as 700 limited partners,” Papadellis says. “We are their employees. And they have an opinion on everything.”

They rarely speak with a single voice.

Getting this diverse group — which also includes some Florida grapefruit growers — to pull in one direction is much like rounding up votes for a bill in Congress, Papadellis says. It takes a lot of leg work and face time, a lot of effort to build trust while constantly quashing the rumors that circulate in coffee shops from Oregon to Cape Cod.

The ongoing job of coaxing such a diverse constituency into alignment is probably the hardest aspect of running Ocean Spray. Doing it well, Papadellis says, has been his biggest contribution.

The growers — not to mention the board and the executive team — were anything but aligned in 2000 when Papadellis joined Ocean Spray in Lakeville-Middleboro, Mass. as president and chief operating officer. Trying to prop up the bottom line for the near term, the company had cut $30 million from its marketing budget prior to Papadellis’ arrival, a tactic that backfired by depressing demand for Ocean Spray’s products while the cranberry supply continued to grow. The glut was so severe that year that Ocean Spray could pay its growers just $12 a barrel — $6 per barrel less than it cost to grow the fruit. Papadellis joined the cooperative at this point as COO.

That crisis spurred a major rift. Half the grower-owners felt it was time to sell the Ocean Spray brand to a powerhouse such as Coca-Cola or Nestlé. The other half believed that with the right management team, Ocean Spray could regain the success of earlier days.

The company churned through two boards of directors and three CEOs before Papadellis assumed the chief executive job in 2004. He immediately set out to unite all the factions behind a common goal.

“I took the job under the condition that the board would work with me, and once and for all determine what the growers wanted to do strategically with the business, and then align around that point of view,” Papadellis says.

Leading stakeholders to a difficult consensus was not a new challenge for Papadellis. Before coming to Ocean Spray, he had served as chief marketing officer at Welch’s Foods, another growers’ co-op. Earlier, as vice president of marketing for Cadbury Beverages, North America, he had to negotiate continually between the needs of franchise bottlers and the parent firm.

Even early in his career, as a brand manager at Frito Lay, Papadellis spent much of his time getting constituencies to line up behind a plan. “There’s a sales department, a manufacturing department, a distribution department, that don’t quite see eye-to-eye on things like objectives and timetables and priorities,” he says.

Continued on page 2