Bounty of the bog gets pricier

Thinking of cooking with fresh cranberries this holiday season? You may need a backup recipe.

A combination of poor weather conditions and rising demand for the tart red fruit from health-conscious consumers may lead to shortages by Christmas, industry and retail officials say. Canned sauce, bottled juice and dried cranberry snacks will be available, but prices are expected to rise in coming weeks and months. As for fresh cranberries, ”we won’t have any left for Christmas,” predicts Robert Keane, a spokesman for the Stop & Shop Supermarket Co., a 389-store supermarket chain based in Quincy, Mass. and owned by Royal Ahold in the Netherlands. He calls the projected scarcity ”an industry-wide problem.”

Consumers already are seeing slight price increases. The average retail price of a 12-ounce package of fresh cranberries rose eight cents this year to $2.20 from $2.12 in 2006, according to the American Farm Bureau Federation, an organization representing farm and ranch families.

Thanks to new product innovations and efforts to promote the health benefits of the fruit by industry leader Ocean Spray Cranberries Inc. and others, cranberries no longer are relegated to a Thanksgiving side dish. They can now be found in more than 2,000 products from muffin mix to soap. U.S. unit sales of dried cranberries, used to make snacks and as ingredients in other foods, rose nearly 20 percent in 2006, according to Information Resources Inc., a Chicago-based retail-tracking firm.

Cranberries prefer cold winters and plenty of rain. So last year’s unusually warm winter and a summer drought in many parts of the U.S. and Canada hurt the crop now being harvested. Peter Beaton, who grows cranberries in Wareham, Mass., says his overall crop is down about 30 percent this year from a year ago because of the weather. But he expects higher prices to help offset the shortfall, resulting in a profit decline of only 10 percent to 15 percent.

Cranberry industry officials estimate this year’s smaller yield is expected to bring growers $45 to $50 for a 100-pound barrel, up from $37 last year, and more than triple the $16 a barrel about seven years ago. Farmers generally need between $18 to $24 a barrel to break even. Overall, officials are predicting growers will produce about seven millon barrels in the U.S. and Canada – about one million less than a year ago. As recently as August, the U.S. Dept. of Agriculture was forecasting a slight increase in cranberry production in the U.S. this year, but officials say they expect to revise the numbers in January.

The wholesale price of cranberry-juice concentrate charged by processors to juicemakers and other distributors shot up to $65 a gallon this month from $45 in August, according to the Cranberry Marketing Committee, an industry advisory group to the USDA.

Some of that price increase will be passed on to consumers in the coming months, says David Farrimond, the committee’s executive director. Gordon Crane, founder and president of Port Washington, N.Y.-based juice maker Apple & Eve LLC, which markets the Apple & Eve and Northland cranberry juice and juice-blend brands, says he expects retail cranberry juice prices in general to rise ”at least 10 percent” in the next several months. He said his company will make its pricing plans known shortly.

Chris Phillips, a spokesman for the Lakeville, Mass.-based Ocean Spray, says the 800-member farming cooperative also plans to increase its prices on its cranberry products in 2008. He called the increases ”modest” and declined to elaborate. With annual sales of $1.68 billion and a 70 percent market share, Ocean Spray is far and away the cranberry market leader, selling its products in many parts of Europe and in Asia. ”We could be selling cranberries right now in countries like Turkey, Saudi Arabia and the Philippines, but we can’t enter those markets just yet because of supply constraints,” says Ocean Spray Chief Executive Randy C. Papadellis.

On the health front, the first big boost for cranberry marketers came from an article in the Journal of the American Medical Association in 1994. A team of Harvard Medical School researchers showed in a large clinical trial involving 153 elderly women that regularly drinking cranberry juice cocktail – a mix of cranberry juice, corn syrup and water – reduced the presence of certain e.coli bacteria in the urinary tract.

Then, in 1998, a research letter in the New England Journal of Medicine identified the agent preventing bacteria from adhering to urinary tract walls as proanthocyanidins, which are condensed tannins in the cranberry’s skin and other parts. The 1994 study was funded by Ocean Spray; the 1998 research was funded by Rutgers University in New Jersey and Ocean Spray.

Researchers are further probing how the cranberry helps prevent urinary-tract infections, whether cranberries can deter dental plaque and tooth decay, and whether they can help blood move more effectively through the blood vessels. ”It’s a miracle food,” says Amy Howell, a researcher at Rutgers.

The academic research piqued the interest of the food industry, which began paying farmers up to $80 a barrel for cranberries. That attracted a host of outside investors, who expanded cranberry production. The result: a cranberry glut around 2000.

Competition from new products in the expanding beverage market led to declining cranberry drink sales. To turn the sales around, Ocean Spray began promoting the health benefits that cranberry studies were uncovering. In addition to its effect on urinary-tract infections, several studies also found the cranberry to have very high levels of anti-oxidants – a buzzword in health circles referring to natural chemicals that are believed to fight disease and slow the aging process.

Ocean Spray decided to call its fruit the ”wonderberry” and focus on its ability to ”cleanse and purify.” An ad campaign that launched in the fall of 2005 featured growers standing in a cranberry bog delivering various health messages in an awkward but folksy manner.

Unit sales of Ocean Spray’s cranberry-juice cocktail rose 3.1 percent in 2006, compared with a 5.3 percent decline in shelf-stable juice and juice-drink sales over the same period, according to IRI.

To further drive up demand, Ocean Spray and other growers have also unleashed a steady flow of new products, including new low-calorie drinks such as Diet Ocean Spray, a juice drink introduced in 2006. In one recent television ad, two growers promote the juice drink as ”better for you than diet soda.” In April, the company launched a line of ”Grower’s Reserve” 100 percent natural juices, including a ”Super Antioxidant” variety with blueberry, pomegranate and cranberry juices.

Following Ocean Spray’s lead, Decas Cranberry Products Inc., a smaller competitor based nearby in Carver, Mass., also has introduced a variety of health-oriented offshoots. Under its patented ”Fruitaceuticals” brand, it recently launched two new products. One, called ”PomaCrans,” is labeled as ”Antioxidant-rich Cranberries plus pure Pomegranate.” Another offering, ”OmegaCrans,” are dried cranberries fortified with omega fats – considered by some to improve cardiovascular health – from cranberry seeds. ”We used to throw the seeds away, but the funny thing is, we recently discovered there’s omega oil in them,” says Decas Chairman John Decas.

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