Cranberry cost hikes likely as demand booms

Poor weather and booming demand is creating a supply shortage that is likely to drive up the cost of fresh cranberries and their extracts. Sauces, juices, and dried cranberry products are all expected to rise by year's end as adjustments to the supply situation are made. Small increases in the retail price of fresh cranberries has already been passed onto the market and more are expected.

Demand for all forms of cranberries has been fed by marketing efforts of companies like market leader, Ocean Spray, meaning cranberries have attracted a 'superfruit' buzz that has seen the fruit being included in one form or another in more than 2000 products ranging from cereals to juices to trail mixes to muffins and soap. Ocean Spray and others like Massachusetts-based Decas Cranberry Products and CHR Hansen of Denmark have stepped up their ingredient offerings to fill the breach.

Illinois-based market analyst, IRI, noted dried cranberry sales rose 20 per cent in 2006. Yet the overall crop is expected to be down because of an unusually dry winter in 2006/07 and a summer drought in many parts of North America. However Massachusetts-based Ocean Spray, responsible for about two-thirds of North America's cranberry crop via its network of about 800 farmers, said its crop was not expected to be less than last year, and if there was a shortage it would be due to surging demand.

According to the Wall Street Journal, the wholesale price of cranberry juice concentrate rose from $45 to $65 in August, according to the Cranberry Marketing Committee, an industry advisory group to the US Department of Agriculture. One juice maker told WSJ it expected process to rise "at least 10 per cent" in the short term.

Ocean Spray, with annual sales of about $1.68 billion, said plans to move into new markets in Europe, the Middle East and Philippines had been put on hold by supply constraints.

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