Speaker 1: You're listening to Bloomberg Business Week with Carol Messer and
Speaker 1: Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. We're thinking
Speaker 1: of Thanksgiving and we know that is certainly on the
Speaker 1: mind of our next guest. There's turkey there, stuffing, of course,
Speaker 1: grave YouTube, but another must have it's a staple, cranberries
Speaker 1: and cranberry sauce. Tom Hayes knows a lot about that.
Speaker 1: He is the president and CEO of the agg Cooperative
Speaker 1: Ocean Spray, He's former CEO of Tyson Foods, and he's
Speaker 1: joining us on the phone in Boston. Tom. So great
Speaker 1: to have you back with us. Happy almost Thanksgiving. How
Speaker 1: are you. I'm doing great, Thanks Carol, and happy Thanksgiving
Speaker 1: to you and the listeners. This is a special time
Speaker 1: of year and we're so excited to be a big
Speaker 1: part of it. Well, you certainly are a big part
Speaker 1: of every Thanksgiving celebrations. Certainly we're in my house and
Speaker 1: continue to be so. So tell me how this year
Speaker 1: compares with last year, and how easy or difficult will
Speaker 1: it be to get cranberries on our tables this year.
Speaker 1: You know that the there's a couple of big factors
Speaker 1: of course Number one is demand. So consumer we're coming
Speaker 1: together more than they have in the last couple of years.
Speaker 1: We're seeing a lot of demand not just on Cranberry products,
Speaker 1: but all of our products, and it's something that is,
Speaker 1: you know, not unexpected. They want to get together, they
Speaker 1: haven't had a chance to be as family and friends,
Speaker 1: and they're just really trying to take advantage of something
Speaker 1: really positive. The other side of that is that the
Speaker 1: costs are are a lot higher, So whether it's supply
Speaker 1: chain impacts or you know, other things that are you know,
Speaker 1: just making our lives a little bit more difficult in
Speaker 1: terms of getting products to consumers. It does put us
Speaker 1: in a position where we have high demand but also
Speaker 1: high cost. So I think that's gonna put extra pressure
Speaker 1: on not just on companies like Ocean Spray, but a
Speaker 1: lot of consumer products companies to deliver everything to the
Speaker 1: Thanksgiving table. But you know, so far, so good for us.
Speaker 1: We're really happy about the position we're in and hopefully
Speaker 1: everybody be able to find what they want and enjoy
Speaker 1: the holiday. Tom I don't want to bring the mood
Speaker 1: down ahead of Thanksgiving this week, but there any sort
Speaker 1: of particular ingredients, particular products that all severely in short supply,
Speaker 1: things that that if you haven't done your shopping yet
Speaker 1: for Thursday, you should be worried about. You know, there's
Speaker 1: I think that that depends on the retailer, depends on
Speaker 1: the part of the country, and you know how the
Speaker 1: supply is held up because of the increased demand. So
Speaker 1: I think the you know, the the advice that we've
Speaker 1: been giving consumers and you know people that are asking
Speaker 1: us a question, is that you know, you need to
Speaker 1: be a little bit flexible. Some of the consumers are
Speaker 1: really excited about the iconic cranberry jelly sauce with the
Speaker 1: ridges from the can they left to open that up
Speaker 1: and slice of further family members, and but you know,
Speaker 1: there could be maybe in a situation where they got
Speaker 1: to pick up a whole berry or they have to
Speaker 1: make cranberry sauce from fresh cranberries. So I think those
Speaker 1: are the those are the things that surely make your
Speaker 1: own cranberry source. Who does that? Yeah, well, you know,
Speaker 1: there's certainly a lot of people that I think still do.
Speaker 1: But we uh, like I'm a sample sizing one here,
Speaker 1: but our family certainly loves the can cranberry sauce, well disclosure,
Speaker 1: so do we we we make cause I made as well. Um,
Speaker 1: you know your food supply chain. I mean this is
Speaker 1: something you know, just like with the pandemic Tom, we've
Speaker 1: learned about what it takes to create a vaccine. And
Speaker 1: I think with all of the supply shortages were understanding
Speaker 1: that a supply chain isn't just we go to a
Speaker 1: store and it's not on the shelf. It's a lot
Speaker 1: more complicated than that. What has the recent shortages, how
Speaker 1: has it impacted you in terms of how you think
Speaker 1: about your supply chain. It's really caused us to think
Speaker 1: very differently, Carol, And is the thing that is the
Speaker 1: most interesting to me is the way that the creativity
Speaker 1: has just been on display. So are we have The
Speaker 1: company is owned by seven hundred family farms, and those
Speaker 1: family farms, you know, do things in their daily operations
Speaker 1: that they've had the change as relates to getting whether
Speaker 1: it's transportation or materials to their farms in order to
Speaker 1: then produce the Grand braise and send them to the cooperative.
Speaker 1: I would say that you know the the supply chain
Speaker 1: parts that we've been head for example on steel cans
Speaker 1: that we put Grandberry sauce into we've had to get
Speaker 1: really creative because there's been a shorter supply of those
Speaker 1: based on demand. We've had to go to another can
Speaker 1: and a can size, and we've had to modify our
Speaker 1: lines and our plants to accommodate that. The other thing
Speaker 1: is on transportation. You may have heard about this, uh,
Speaker 1: you know too much already, but transportation is really difficult,
Speaker 1: particularly with you know, lanes from the plants to our customers,
Speaker 1: to retailers and food service customers. It's really like the
Speaker 1: cost has gone up, but it's not just the cost
Speaker 1: but the availability. Sometimes you can't get those products to
Speaker 1: the customers at the time in which they need them,
Speaker 1: and so it's caused us to really really think differently
Speaker 1: about you know, lead times and making sure that we're
Speaker 1: properly allocating products of customers. So the creativity is is
Speaker 1: front and center, and I'd say that overall that's a
Speaker 1: good thing because you have companies that are just thinking differently.
Speaker 1: We certainly have and has created new capabilities where we
Speaker 1: didn't have them. Frankly, hey, you've got facilities um around
Speaker 1: the country, and you've got obviously bottle facilities in various
Speaker 1: state labors. Are you able to get the labors you
Speaker 1: want and or are you having to pay up a
Speaker 1: bunch to get them? The cost have certainly gone up.
Speaker 1: We have been fortunate that we've been able to get
Speaker 1: the team members that we would like to We've we
Speaker 1: did experience and what has been difficult thing for us
Speaker 1: to overcome has been you know, team members have left
Speaker 1: and retired. We have people come to and spray they
Speaker 1: stay with our company because of the values that we
Speaker 1: have and the purpose that we are driven by. But
Speaker 1: you know, there have been people that have decided to
Speaker 1: retire during the pandemic. So we're training a lot of
Speaker 1: new team members. Of course, some of those team members
Speaker 1: turn over, but we have you know, thank goodness that
Speaker 1: we've been in a pretty good spot in terms of
Speaker 1: retaining the folks that we need to get the job done. Uh,
Speaker 1: you know, the transportation side it is a little bit
Speaker 1: more difficult, but you know, so far, I would say
Speaker 1: that the team has done a wonderful job, you know,
Speaker 1: keeping team members engaged at the plant level. Tom just
Speaker 1: got about a couple of minutes and then we'll take
Speaker 1: a break, do some more news and come back and
Speaker 1: contin in. You with you. But I think about your
Speaker 1: background former presidency. You have Tyson Foods, chief supply chain
Speaker 1: officer of at Hillshire Brands and Saraly You've been at
Speaker 1: Canagara Craft. What are the most interesting food trends that
Speaker 1: you think you're that that are happening right now? Um,
Speaker 1: I think right now it's uh food trend is getting
Speaker 1: the food to the table. The outside of that, you know,
Speaker 1: the vality check, right. The biggest thing that is has
Speaker 1: been before the pandemic, and certainly you know, I think
Speaker 1: coming through the pandemics has been accentuated is that consumers
Speaker 1: just want to feel emotionally connected to what they're you know, buying,
Speaker 1: and they have been really looking for products with fewer
Speaker 1: ingredients and they're really taking an active role in, you know,
Speaker 1: not only what they consume, but also how they feel.
Speaker 1: And it's really the health aspects of you know, food
Speaker 1: in the front and center. The other thing I would
Speaker 1: say is, and this is I've seen this in the pandemic,
Speaker 1: is that people are coming back to brands that they
Speaker 1: know and love. So there's a lot of a lot
Speaker 1: of focus on you know, what makes me comfortable, Like
Speaker 1: I said, an emotional attachment. But what do I know?
Speaker 1: What do I trust? What's a brand that I can
Speaker 1: feel comfortable with and I've been, you know, using for forever,
Speaker 1: or maybe I've not used it in a while, and
Speaker 1: I can come back to it. And we certainly have
Speaker 1: seen that at Ocean Spray. Our consumers are excited about
Speaker 1: our brand. They have come back to us to a
Speaker 1: large degree. We're excited about the households that we're keeping
Speaker 1: and you know, hopefully we earned that trust every day
Speaker 1: by quality products we produced, right, and you continue to
Speaker 1: really build out the brand in a thoughtful way. And
Speaker 1: maybe we'll get into that a little bit more when
Speaker 1: we come back on the other side. Tom Hayes, President
Speaker 1: CEO of Ocean Spray, you know the name Ocean Spray.
Speaker 1: I remember Ocean Spray as being about cranberries. But Tom,
Speaker 1: I'm delighted to speak with you. I won't be in
Speaker 1: the United States this year for Thanksgiving, and it's actually
Speaker 1: sag because it's the first time I won't be for
Speaker 1: a couple of years. But we were discussing how more
Speaker 1: more people than ever will get together. Essentially, there's so
Speaker 1: much to consider around supply chain inflation, higher input costs,
Speaker 1: but at the end of the day, you're still the
Speaker 1: sea have an important company this time of year, how
Speaker 1: much attention do you pay to things like the president's
Speaker 1: nomination of J. Powe's FED chair and Dr Lele Brain
Speaker 1: and his vice chair going forward? We certainly, you know,
Speaker 1: do we have a government relations team that is trying
Speaker 1: to make sure that our interests are best served, and
Speaker 1: so we constantly tell our likely officials what we think
Speaker 1: that would be helpful for our seven hundred farm our
Speaker 1: owners as well as consumers. So that's something that's certainly
Speaker 1: front and center. I would say that most of the
Speaker 1: time we spend is really focused on our own sort
Speaker 1: of issues that are important. Oceans very of course. So,
Speaker 1: but that you know external markets greatly is who you
Speaker 1: know a fact, what consumers are able to spend, and
Speaker 1: what you know certain policies will deliver as relates to
Speaker 1: potentially inflation and otherwise. We always have a keen ear
Speaker 1: to the rail on things that are coming down the pike,
Speaker 1: and we definitely want to make sure we influence where
Speaker 1: we can. Well, Tom dare I say inflation transitory or not?
Speaker 1: And I just wonder in terms of you know you
Speaker 1: are getting I'm sure intel when it comes to your
Speaker 1: supply chain and your need and as well as your
Speaker 1: member farmers about their costs and whether or not we
Speaker 1: see them continuing for a longer time or maybe for
Speaker 1: something that's beyond transitory. I guess it is at this point. Um,
Speaker 1: I'm just curious what you're hearing on that front. So,
Speaker 1: you know, the at the risk of you know, being
Speaker 1: a downer, uh, you know the the because this is
Speaker 1: a fantastic week. Everybody is hopefully a lot to be
Speaker 1: thankful for, and you know, certainly do a lot of celebrating.
Speaker 1: We don't see these cost pressures as transitory. We do
Speaker 1: see them, you know, ongoing and continuing, and uh, we
Speaker 1: don't see signs yet and I'm hopeful that we will
Speaker 1: right now, whether it's steel cans like I mentioned, or
Speaker 1: if it's from materials transportation. Everything is moving in the
Speaker 1: wrong direction now. Having said all that, you know, we
Speaker 1: also think at Ocean Spray there's a lot of opportunity
Speaker 1: for our products to be regardless of what comes at
Speaker 1: us in terms of inflation. Important to consumers because it's
Speaker 1: a super fruit and you want polyphenols and you know,
Speaker 1: antioxidants in our diet. We've got to figure out ways
Speaker 1: to do that, and we will continue to fight the
Speaker 1: good fight here for our farmer owners and for consumers.
Speaker 1: And we haven't, by the way, taken pricing in the
Speaker 1: last ten years. This is the first time we're taking
Speaker 1: pricing uh in the market for you know, to cover
Speaker 1: some of those costs. But we do a lot, think
Speaker 1: a very good job of making sure that we contain
Speaker 1: our costs to make sure we deliver a great consumer proposition.
Speaker 1: You know, it's a really important time of year. You know,
Speaker 1: it's important to be optimistic. It's been a long year
Speaker 1: to pan of years and the very book, but what
Speaker 1: is the health of the consumer? You know, you talked
Speaker 1: about the demand being there, but are you confident in
Speaker 1: the strength of consumer bank accounts and the economy going forward? Yeah,
Speaker 1: we we are, and we have seen it. I mean
Speaker 1: that if you know, other companies have not. They might
Speaker 1: be in spaces where uh, you know, just not thing
Speaker 1: that is uh. Consumers leaning towards these days with you know,
Speaker 1: being mostly at home. We're having been mostly at home
Speaker 1: for a company like Ocean Spray. We've seen because of
Speaker 1: I've talked about earlier, the brand strength consumers really have
Speaker 1: spent and they continue to spend their dollars on our products,
Speaker 1: and we do see the consumer being extraordinarily healthy. As
Speaker 1: we look to see what the implications are when we
Speaker 1: come out of the government assistance, it does that have
Speaker 1: a change effect. Possibly could, but right now we're seeing
Speaker 1: the consumer remaining extraordinarily strong and hopefully that continues. But
Speaker 1: for us, you know, and it's been we see a
Speaker 1: lot of tail went well, you know, and it's good
Speaker 1: that you brought up certainly the government assistance. It has
Speaker 1: been crucial to so many Americans at this point. Uh.
Speaker 1: And even though we talk about consumers being in better
Speaker 1: shape and they have more money in their bank accounts,
Speaker 1: we know for many those government payments have just kept
Speaker 1: them going and kept their families fed. You're involved Ocean
Speaker 1: Spread a UM is involved with the No Kid Hungry organization.
Speaker 1: Talk to us a bit about your involvement, what you've
Speaker 1: been seeing, especially as we kick off this this holiday season,
Speaker 1: which for many it's great. For many, they still have
Speaker 1: to struggle through, absolutely, and we're keenly aware of that.
Speaker 1: So being that it is the time in which people
Speaker 1: come together and they celebrate and they want to be
Speaker 1: with their families more so than almost any other holiday
Speaker 1: throughout the year. We thought it would be fantastic to
Speaker 1: start this Better Together campaign hashtag better Together. And what
Speaker 1: we did was we partnered with Jesse Tyler Ferguson and
Speaker 1: we have this national campaign going on that does benefit
Speaker 1: no kid hungry. And what it is is offering inspiring
Speaker 1: holiday recipes, bringing nutritious, delicious sort of thank you packages
Speaker 1: to school staff across the country because it's great work
Speaker 1: they do. And we're hopeful that, you know, not only
Speaker 1: to provide recipes and excitement around the holidays as people
Speaker 1: get together, but to to continue to do this in
Speaker 1: a way that is benefiting kids. And we're very focused
Speaker 1: on making sure that we can do what we can
Speaker 1: from our perspective to make the world a better place
Speaker 1: through food. Are you optimistic Tom for the the year
Speaker 1: to come for things to improve generally? I am. I
Speaker 1: would say a little bit cautious. Cautiously optimistic, just because
Speaker 1: we do see that we have some challenges right, challenges
Speaker 1: to face in terms of cost. What gives me the
Speaker 1: optimism is that this cooperative continues to face up challenges
Speaker 1: all the time. So ninety year history, we invented cranberry
Speaker 1: and we sort of you know, through the company from
Speaker 1: there and it's been very successful you know, over the
Speaker 1: ninety years. And I would say we just continue to
Speaker 1: build that resilience. That's one of our values is grower
Speaker 1: mindset and I believe this is at work here. So people,
Speaker 1: although they see the challenges in front of them, they
Speaker 1: are fighting to get the best result that we possibly
Speaker 1: can every day and for that, I'm very optimistic. Biggest
Speaker 1: risk you think going into so we have for us
Speaker 1: at Ocean Spray, we have certainly had not had a
Speaker 1: fantastic crop here and this is something that we're very
Speaker 1: focused on because if we have you know, for selling less,
Speaker 1: of course, then we're not going to make the same
Speaker 1: proceeds for our owners. So we want to do is
Speaker 1: make sure that we get pricing in the marketplace that
Speaker 1: we have you know, all the costs you know, corraled
Speaker 1: as much as we can and make sure we only
Speaker 1: spend money where we need to and we will pull
Speaker 1: through in a way that is going to you know,
Speaker 1: shine bright light on the power of our team coming
Speaker 1: together solved problems. But if there's something that you know
Speaker 1: sort of in front of us, is we've got a
Speaker 1: lot of headwinds, and you know, this year's crop has
Speaker 1: has been down and not the only crop in the industry,
Speaker 1: by the way, but the Cranburn crop has been so
Speaker 1: it just makes things just a little bit more difficult
Speaker 1: than they normally would be. Well, we wish you well
Speaker 1: and a better year certainly on that front, and a
Speaker 1: really healthy and happy Thanksgiving and really throughout the holiday
Speaker 1: season to you and your cooperative members. Tom Hayes, President
Speaker 1: and chief executive Officer of Ocean Spray from Boston. That's
Speaker 1: gonna do it for Ed Ludlow. I'm Carol Masser and
Speaker 1: the whole Bloomberg Business Week team. Have a good and
Speaker 1: safe evening. This is Bloomberg