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Retailers see customers flock to Ocean Spray Cran-Raspberry juice after viral TikTok

Tom Hayes, Ocean Spray CEO, joins Yahoo Finance’s The First Trade with Alexis Christoforous and Brian Sozzi to discuss the impact of the recent viral TikTok sensation showing off its juice, in addition its upcoming harvest season and much more.

Video Transcript

ALEXIS CHRISTOFOROUS: The COVID-19 stay at home orders have sparked a number of creative trends, we'll call it, across social media. The latest to go viral? This Ocean Spray challenge.

I could just keep on watching it. I am one of them that started. The TikToker drinking cranberry juice while riding his skateboard and you have it listening to Fleetwood Mac has made its way around the world. So who better to bring into this conversation than Ocean Spray's CEO Tom Hayes? Hey, Tom, good to see here.

I know you yourself did sort of a spin off of that TikTok video, and you took to your skateboard. I was very impressed. First off, how did you even hear that Ocean Spray was part of this viral TikTok video?

TOM HAYES: Yeah, first of all, thanks for having us. This is a great time of year for us. It's actually our 90th harvest, and so really excited about all the opportunities in front of us, but really proud of what was behind us in terms of our heritage at Ocean Spray.

Yeah, the video came to my attention through one of our team members. They had sent it, you know, forward and said, hey, this is something that is sort of hitting the ground, getting a lot of traction, if you will. And so my immediate reaction was we need to be a part of this. We've got to get involved, and we weren't really sure at the time when we first had the discussion how we were going to do that, but then sort of the conversation started from there.

BRIAN SOZZI: Tom, I had no idea that you knew how to skateboard, but what you did, your TikTok was very, very impressive. Have you seen any pickup in business? I mean, this is now a viral commercial, and people are still coming in contact with it for the first time.

TOM HAYES: Yeah, it's incredible. You know, Brian, we have about 15 billion impressions now, you know, media impressions alone. And we can't say that we've seen, you know, an immediate impact right now, because we have the shipments are going to retailers, retailers are telling us though there is some, you know, additional draw off the shelf, particularly with Cran-Raspberry. We have been the benefactors of, you know, some strong sales based on consumers coming back to products that they love and that give them comfort in uncomforting times. So we have seen, you know, overall sales great, and I expect to see Cran-Raspberry sales to take off quite literally year in the next quarter. So yeah, we are looking forward to that.

ALEXIS CHRISTOFOROUS: You know, we've seen I saw this behavioral shift which has been taking place over a number of years, people moving to healthier foods, and cranberry juice, you know, typically, I think people think of cranberry juice as having a lot of sugar. Are you doing anything there at Ocean Spray to sort of meet that concern?

TOM HAYES: Yeah, that is certainly a challenge that we have, and I would say probably, you know, most of the drinks category, with the exception of seltzers, water, they have been fighting that challenge. For us, you know, cranberries being a super fruit with the antioxidant properties that they have, it's a great ingredient, and you know, of course, we have to make the products taste great for consumers to consume them, but we are doing a lot of work to make sure that we reduce sugar, reduce added sugar, and also come up with alternatives that, you know, use the cranberry benefits without necessarily being, you know, the prominent feature or the prominent ingredient on the label. So some of the innovation that we've started in our Lighthouse Innovation Incubator in downtown Boston has been really exciting, because there are ways that you can introduce cranberries and all the benefits without having some of the negatives with added sugar, so absolutely, it's a focus.

BRIAN SOZZI: Tom, you must have saw my next question, because I remember talking to you years ago back in your prior life as the CEO of Tyson Foods. You have had a real cool knack of predicting like the next big thing in food like spotting trends. What are you working on right now? Is Ocean Spray just a cranberry company? Are you looking at expanding into foods? Where do you see it going?

TOM HAYES: We have the beauty of having the wonderful heritage that I spoke of, which so we are cranberries and focused on cranberries. However, we have a very progressive, even though very, you know, multi-generation grower base and owner base that wants to make sure that we continue to keep the company relevant. So to do that, you know, three things.

One, make sure that the brand is continuing to be, you know, in the forefront. We're doing things to renovate and get the exposure out there. This TikTok, you know, sort of crazy really helped that.

Number two is making sure that the consumer is leading our direction. So if the consumer has been telling us what they want in terms of things like reduced sugar and other products. But then the third, most importantly, yes, absolutely, getting to those products that can be a part of consumer's life to take advantage of the great brand equity that we have with Ocean Spray into things like healthy snacking, new beverages, maybe even, you know, some signs and mini meals, but getting really focused on what the consumer wants today and where they want to eat it, when they want to eat it, and importantly, you know, having great taste.

ALEXIS CHRISTOFOROUS: Tom, what can you tell us about cranberry farmers? How are they making out now during this pandemic? Are they already struggling? What are you hearing from them?

TOM HAYES: Yeah, that's a great question. You know, we're fortunate that we have farmers all over the North American market and also in South America and Chile, and so we are, you know, balanced in our exposure to mother nature. There are some challenges. You know, here in Southeast Massachusetts where I'm sitting right now, we've had a drought, and so we need water to harvest cranberries, so that has been a challenge.

The co-op has been, the cooperative, have been very focused on overcoming challenges over the years, and they will overcome this one in Massachusetts. But outside of that, it's been a very, very strong year. A little bit of a maybe some headwinds in Wisconsin, but our Canadian growers are doing great. And I would say overall, we're pleased with where the harvest is going to come in, and I've been very excited to see the quality of the fruit that we're getting, which is fantastic.

BRIAN SOZZI: Tom, how are you preparing, or how do you plan it-- I mean, you just took over there. How do you plan to prepare the co-operative for a future of climate change getting even worse?

TOM HAYES: Yeah, you know, we do see there are certainly, you know, as it relates to frosts and, you know, precipitation, there's been some changes that we have seen. The growers would tell you that for sure. The way that we've been dealing with that, Brian, is really picking up the pace on Ag Tech. So there's a lot of great irrigation technology that has allowed us to use less water, use the right amount of water at the right times and to reduce the impact that we have on the environment and reduce the amount of, you know, overall water that we're using.

So we are the first sustainable crop, as designated by the Sustainable Agriculture Initiative, SAI, and that is a pretty interesting thing for us. Because you would think there'd be more crops that have that designation, but cranberries in Ocean Spray is the first crop to actually be designated as that. So we're excited about, you know, our ability to continue to be a positive influence on agriculture and reduce our overall footprint.

BRIAN SOZZI: All right, we'll leave it there. Tom Hayes, Ocean Spray CEO, good to see you back in the CEO game, and be careful on that skateboard, man. The co-operative needs you at the board meetings.

[LAUGHTER]

TOM HAYES: Thank you very much. I will do my best. Take care.