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![Page 1: Success with Inventive Joint Ventures Seventh Annual Farmer Cooperatives Conference Cooperative Innovation John Shelford President Global Berry Farms,](https://reader036.fdocuments.net/reader036/viewer/2022081516/56649dc95503460f94abf2ba/html5/thumbnails/1.jpg)
Success with Inventive Joint Ventures
Seventh Annual Farmer Cooperatives ConferenceCooperative Innovation
John ShelfordPresident
Global Berry Farms, LLC.
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Topics
• GBF History and Today’s Structure
• Partner’s Background
• Strategic Motivators
• Challenges
• Partner Policies
• Vision for Growth
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Global Berry Farms LLC
• The mission of Global Berry Farms is to be the premier fresh berry supplier to the North American market mutually benefiting partners, customers and consumers.– GBF organized Summer 2000– GBF operational November 1, 2000– MBG Marketing and Hortifrut SA – 50/50 partners– Naturipe Berry Growers partnered Nov. 1, 2002
• Equal shares
– Alliance agreement• $25mm sales threshold – for consideration to become 10%
partner• Partnership 30/30/30/10 split• Forecasted to achieve threshold in 2007
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Sales History
$72
$93
$175
$195$214
$0
$50
$100
$150
$200
$250
Millions
2001 2002 2003 2004 2005 Forecast
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Partner Sourced Sales90%
83%
92% 92%
88%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2001 2002 2003 2004 2005 Forecast
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Partner’s Background
• MBG – Michigan Blueberry Growers Association– Founded 1935 - marketing cooperative– 400 Blueberry Growers
• Michigan/Indiana• Florida• Georgia
• Members are the finest growers in North America• Various packs of blueberries – fresh, frozen, fresh
process for canning, and dried• Represent 25 to 30% of North America’s cultivated
blueberries
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Partner’s Background
• Hortifrut SA– Founded 1982– First significant Southern hemisphere berry
production investment destined for northern hemisphere markets.
– Tightly held family corporation -- Victor Moller, Chairman
– Represent approximately 30-35% of all berries produced in Chile
• Raspberries and Blackberries in early 80’s• Blueberries in mid 90’s• Blackberries in Mexico beginning in late 90’s – today
40% of Mexico fresh blackberry supply
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Partner’s Background
• Naturipe Berry Growers– Marketing Cooperative– Founded in 1917 as Central California Berry
Grower Association– Adopted “Naturipe” as the trademark and brand
in 1922– Entered frozen strawberry packing and sales in
the 50’s, exited in 2002– Partnered with GBF - November 2002– Represent 8-10% of California’s fresh strawberry
sales
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Strategic Motivators
• Customer consolidation– Efficiency in sourcing
• Reduction in number of sources• Seasonal suppliers out• Full season volume suppliers in
– Added services increasingly important• Logistics• VMI - Vendor managed inventory• Product support – category management• Shipper – Volume needed to fund services
– Producers must commit to product and category leadership for direct relationships
• Market leadership in each product• Market at least 30% of each product• Blueberries the core product – secure and build from existing market
share position
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Strategic Motivators (cont.)
• Partners or competitors?
– Partnering - the rational choice• Year round supply• Volume to support demand services• Concentration of supply • Facilitates a reduction of both sourcing and selling
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Strategic Motivators (cont.)
• Naturipe was attracted by – GBF customer relationships highly direct– GBF team of seven account mangers– Participation with the full berry category– Partnership sales sufficient to mount
serious marketing effort.
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Challenges
• Trust and confidence between partners
• Pride and emotional connection to significant successful history
• Integration and consolidation of employees
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Overcoming Challenges
• Significant history of business relationship– MBG and Hortifrut
• 1991 – MBG entered into sales contract with Hortifrut selling berries November to May
• GBF’s President– 18 years at MBG, 12 years as Executive VP
– employed MBG Director of Sales and key account manager who became GBF’s VP Sales and lead account manager
• Naturipe - no prior relationship.– Clearly evidenced in negotiations and the first years of
operation
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Overcoming Challenges•MBG member communication
• An intensive agenda of membership meetings with q & a
• Focus on strategic issues
• MBG board to Chile to learn Hortifrut in depth
• MBG membership voted approval
• NBG similar activity
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Overcoming ChallengesPride and emotional connection• First year
– Sales and administration consolidated– Packaging, brand and labels unchanged
• Second and Third Year– Package art and copy redesigned with
GBF logo and partners
• Fourth Year– Naturipe brand incorporated
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Overcoming ChallengesTeam integration and consolidation
• Hortifrut personnel moves to GBF – Executive and administrative function
• MBG sales team moves to GBF – No interruption of sales relationships
• NBG sales team moves to GBF
• MBG reduced administrative support positions
• One employee relocation to Naples
• Internet connectivity provides effective communication with offices in Naples, Tampa, Dallas, Salinas CA and Grand Junction, MI
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Partner Policies• Each partner has two representatives to the Board
– Chief Executive Officer of the partner– Chairmen of Partner’s Board or Board designated
representative
• All decisions must be unanimous• Expenses designated fixed or activity based.
– Fixed costs - allocated equally to each partner– Variable costs - allocated based on partner % of invoices
generated (ABC – activity based costing)– Incentive for partner growth– Manages the risk of a significant cost shift from partner to
partner in event of significant change in annual volume.– The partnership in-view will share an equal portion of fixed
costs (25%) although it’s ownership is 10%.
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Variable Cost Basis
1 1
0.49
0.79
0.46
0.68
1.15
1.72 1.75
1.03
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
Total Company GBF Partner 1 Partner 2 Partner 3
Cases/Inv $/Inv
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Partner Policies
• Three year notice required to withdraw• First rights territories are partner assigned for supply
development. – GBF has supply development responsibility in all districts
not assigned to a partner. – GBF and partners work together for supply development.
• Bar high to participate as an equity partner. – Sales of $25 million (2004 dollars) required for
consideration as potential partner
• Founding Partners retain control• To hold minimum 60% voting equity• LLC agreement require unanimous vote
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Our Vision
• Achieve $.5 billion in sales by 2008 through – Partner growth– New partners or alliances – Sales agreements with other growers
• Increase supply of each berry to a leadership share every day of the year.
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In Conclusion
• Strategic drivers must be compelling
• Inordinate Investment in Relationship Building – Trust is Essential
• Communicate Vision Often
• Deliver on Promises!
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Naturipe Labels In Your Supermarket
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The Fresh New Look The Fresh New Look Of QualityOf Quality