From a Freeze, Opportunity Thaws

Sometimes necessity is also the mother of re-invention.

Just ask Brian Ross.

Ross is three years into his tenure as the CEO of Cheribundi. The company, which makes a tart cherry juice that has been marketed behind both its refreshment and functional attributes, has had its struggles, but it’s also had a clearly articulated vision: to be the Ocean Spray of tart cherries.

Early last year, that vision received a strong vote of confidence in the form of a $4.5 million investment round led by Emil Capital and Cayuga Venture Fund. Things looked good: the company was ready to plow that investment into sales and marketing support for the brand, and, with the Olympics coming up, Ross had even more reason to be optimistic: the U.S. public would soon learn that many Olympic swimmers – along with dozens of pro and college sports teams – use tart cherry juice as an anti-inflammatory.

Within weeks of the investment, however, disaster hit. A March heat wave – temperatures hit the mid-80s – caused cherry trees across Michigan and New York to start blooming more than month ahead of time. That warming trend was followed by more typical early-spring weather: snow and ice. The frozen blooms never produced fruit.

Nearly the entire U.S. tart cherry crop was lost; in Michigan, which produces the majority of the nation’s crop, the yield was 12.5 million lbs., down from the 158 million the year before. The price of the tart cherries that remained skyrocketed.

For a brand that prides itself on being able to stuff the equivalent of 50 or so cherries into a single 8 oz. bottle, the ramifications should be apparent.

“Cherries are 80 percent of the cost of our product, and the price of cherries doubled,” Ross told me. “That’s huge. There was no supply. I had to fly to Poland last May once we found out what happened, negotiating for crops.”

That hurt not just from a cost perspective, but from a branding angle as well. One part of Ross’s plans for Cheribundi had been to help consumers get interested in tart cherries as the “All-American Superfruit.” With Polish cherries in the mix, that just wasn’t going to happen.

So Ross has taken a different tack.

The company took the disaster and the quiet period that followed – UNFI was put on alert that supply would be low, promotions nonexistent, and expansion plans were being dialed back – and instead went to work on making what he saw were changes needed for the brand. Now, the five-sku Cheribundi line that had been focused almost entirely on anti-inflammatory properties has been upgraded to include 14 different flavors, complete with 5 percent cherry juice teas and 25 percent juice “Refresh” drinks, along with several new 8 oz. functional packages: a protein-infused muscle recovery product, a sports drink, and a relaxation-focused variety featuring l-theanine. The larger, 16.9 oz. Refresh drinks are introducing cherries as a product that can be consumed on a daily basis, while the squat functional line is a step up for the heavy user.

“The functional line, that’s kind of the pinnacle of the brand – that product, the benefits, the science, it’s all there – but it’s an intense product, one you need to drink every day,” Ross said. “The Refresh line, we look at it as a grab-and-go, drink-every-day product, and we think that message about the key attributes of cherries is getting it out there, and we can make it more of a mass product.”

A veteran of companies like Oregon Chai and Izze, Ross has seen too many different product iterations to imagine that any brand restage guarantees instant success. But by being flexible in the face of what has been an unpredictable situation, he thinks he’s positioned Cheribundi to come back strong.

Now if only the weather will cooperate.

“We just don’t know anymore,” Ross said. “You’re dealing with a natural commodity. And you know things are changing. This happened 10 years ago, and that was supposed to be a 1-in-100-year occurrence. Instead it was just 10 years later.”

There’s obviously something in that weather pattern that points to the global warming phenomenon, something that the Michigan farmers – and the businesses they supply – are going to have to face over the long term.

But in the short term, the lesson here is that if you’re willing to adjust your plan in the face of an obstacle, to bear down, you might be able to take a limited supply of sour cherries and make them into cherry lemonade. Ross praised his investors, who, he said, helped him when it came time to “batten down the hatches and conserve as much cash as possible for the re-launch.”

“We’ll need to raise money next year,” Ross said, “but we did our best to weather the storm.”