WisBusiness.com

January 2008

“Cranberry experts plan to make high-volume organic production possible”

By Robyn Donahoe

REEDSBURG – Wisconsin is called the “Dairy State” for a reason; it’s known for its cows and the milk they produce. But Wisconsin is a top producer of other commercially important crops, as well. In 2004, Gov. Jim Doyle declared the cranberry as Wisconsin’s state fruit because of its importance to the economy. CraneBerry, an organic cranberry development company, is using this growing awareness and the organics movement as a basis for a business plan.

This budding start-up company plans to build the nation’s largest single-site organic cranberry farm. The design allows for the production of a high volume of high-value, organic cranberries, but at a low cost.

The plan is to plant 750 acres on an “ideal” Adams County site and to use proprietary breakthroughs in water, fertilization and pest management techniques to produce organic cranberries cheaply and at a larger volume than anyone has so far.

Starting a new marsh puts CraneBerry in a strong competitive position in relation to current cranberry growers, conventional and organic. Starting from scratch at such a large scale will allow CraneBerry to employ new technology and realize other economies of scale through equipment and infrastructure.

With one large farm, instead of many small ones, CraneBerry will increase the efficiency of production and be able to generate large volumes of organic cranberries to meet the rising demand.

The members of the CraneBerry team have the knowledge and experience to pull this off.

For Chief Executive Officer Kerry Tolzmann, the CraneBerry business plan is not an entirely new idea. He adapted it from a previously funded plan he created with the help of Robert Pricer at UW-Madison’s Weinert Center for Entrepreneurship. This first plan was to help Ocean Spray lower costs and provide profitability. To create this state-of-the-art farm, Decorah Cranberries, Tolzmann and Pricer raised more than $2 million in angel capital. Tolzmann lead Decorah Cranberries to establish Ocean Spray’s fruit color standard nationwide. This model became the basis for CraneBerry.

The other players in this game are experienced as well.

Chris Lindemood, co-founder and chief operating officer, worked with Tolzmann in the building and operating of Decorah Cranberries. He owns Vision Cranberry, a top producer of organic cranberries. Lindemood has broad industry experience in construction, growing and processing, including cleaning, sorting, packaging, shipping and freezing, of conventional and organic cranberries. His own 10-acre farm of organic cranberries has given him ideas and inspiration for CraneBerry.

Chief Marketing Officer Bob Wilson rounds out the CraneBerry team as the sales expert. He has a thorough knowledge of all levels of cranberry production from construction of farms and fields to processing, procuring and selling. He currently owns Food Partners, which sells commercial ingredients for cranberry products to top-tier companies.

These three cranberry industry veterans are looking for investors to get this project rolling.

“We have an extremely solid plan and if we have an investor sign up today, we could be digging dirt in a couple of days,” Lindemood said.

Last year, organic cranberries represented only 5 million of the 800 million pounds of conventional cranberries produced. CraneBerry predicts production of 10 million pounds of a current 20 million pound demand for organic cranberries.

CraneBerry hopes to meet a high demand for organic cranberries in the juice and frozen segments. According to CraneBerry, larger companies would really like to be in the organic juice market but it’s not profitable. The CraneBerry plan will make production of organic juice more feasible by contracting with one of these juicers to sell their organic cranberry concentrate. Lindemood sees this as a way of creating a brand that is unique and individual, “kind of like the crasin.”

CraneBerry is seeking investors to provide part or all of the estimated fully burdened cost of $35 million. While cranberry farming and production is capital intensive, CraneBerry founders believe they will reach the “break even” point by 2011 or 2012.

With the dairy state of Wisconsin being the source of one of every two cranberries grown, large-scale organic cranberry production may be a solid investment in an evolving, homegrown industry.

Donahoe, who grew up on a Wisconsin farm, recently graduated from the UW-Madison Department of Life Sciences Communication.

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