The cranberry and grapefruit growers who own Ocean Spray Inc. (search) have narrowly rejected PepsiCo's (PEP) offer to buy a stake in the agricultural cooperative.

About 900 farmer-owners in Massachusetts, Wisconsin, New Jersey, Florida, Oregon, Washington and Canada voted 52 percent to 48 percent to turn down Pepsi's bid to acquire half its branded business, Ocean Spray announced Tuesday.

Ocean Spray officials said in a statement that the vote means the board of directors "will cease all talks with PepsiCo and other potential equity investors, focusing all efforts instead on working with management to build the Ocean Spray business for the future."

The board had spent more than a year exploring a range of partnerships that would help Ocean Spray's juice products reach a wider audience.

The company had net sales of about $1 billion in 2003, but the cooperative is tiny compared to its primary competitors, PepsiCo's Tropicana and Coca-Cola Co.'s (KO) Minute Maid.

The cranberry industry is emerging from a prolonged slump caused by a glut of crop and decreasing demand. Prices dropped from a high of about $80 per barrel to $13 a barrel in 1999, well below the estimated production cost of about $35 per barrel. Cranberries have been selling at about $35 per barrel this spring.

Ocean Spray will continue to explore opportunities to work with other companies, the statement said.

PepsiCo shares were up 15 cents at $54.82 on the New York Stock Exchange (search).