Discuss the shifts in demand and supply and the impact on prices and the profitability of individual producers that occurred in the cranberry industry in 2006-2007 resulting from the following facts: 1. Cranberries are no longer relegated to a Thanksgiving side dish. They can now be found in more than 2,000 products from muffin mix to soap. 2. Ocean Spray and other growers have unleashed a steady flow of new products, including new low-calorie drinks such as Diet Ocean Spray. The company has also introduced a line of “Grower’s Reserve” 100% natural juices, including a “Super Antioxidant” variety with blueberry, pomegranate, and cranberry juices.

Last year Ocean Spray has its most successful year ever, posting $2 billion in revenue with 30% from outside the U.S. [1] Ocean Spray Cooperative has one of the great success stories in agricultural marketing cooperatives. Over the past 80 years the company has struggled in several industry dynamics, pricing, supply, demand issues, and macroeconomic factors but has overcome and be a leader in manufacturing and agricultural products.
Cultivated cranberry production can be traced back to the 1800’s when Henry Hull, a ship captain based in Cape Cod notices that wild cranberries flourished when sand blew over them. he transplanted vines to what he called “cranberry yards” and manually spread sand to encourage growth. This practice proved successful, and by the 1850s, cranberry production had expanded both on the Cape and into neighboring Plymouth County. The success spread to New Jersey, Wisconsin in the 1860’s and further west in 1885. By the end of the 19th century, cranberry growers through information asymmetry formed grower associations. The 20th century brought the first cooperative. [2, p. 2]
In the early years, cranberries were marketed exclusively as fresh fruit. Between 1910-1929 production quantities ranged from 300-750,000 barrels at an average price of $4-14 per barrel.