Got Produce Round Up

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Got Produce? Generic Marketing Program Dialog Begins, But Is It Right To Use PBH Donor Funds To Lobby For A Mandatory Assessment? inaugurates our coverage of a proposal to establish a National Fruit and Vegetable Research and Promotion Board, similar to those in the dairy, beef, pork industries. It is an old idea, one long discussed, but it is not clear who actually supports the idea today. We come to the issue somewhat wistfully as there is little question that the world would be a better place if diets shifted to a plant-based foods diet. So the concept is not merely desirable; it is an important public health and sustainability opportunity, but there are serious questions to be discussed. The issue for the industry right now is how to conduct this conversation and the way it is being handled is quite problematic. 5/15/2009

Got Produce? Both Sides Need To Be Heard our piece, Got Produce? Generic Marketing Program Dialog Begins, But Is It Right To Use PBH Donor Funds To Lobby For A Mandatory Assessment? — brought many opinionated letters. We thought this note on our current subject — which is how the industry can conduct this “Dialog” — was worth noting right now. It comes from one the largest shippers in the industry. The writer of this note is one smart cookie and what he is alluding to is that although the process is billed as “An industry dialog” it is, in fact, a wildly stacked deck in favor of the proposal. The imperative for the industry, right now… if we are to have a true dialog… is that both pro and con need to be given equal opportunity to be heard. 5/19/2009

Got Produce? Is $30 Million Sufficient? determined that quite a number of people may oppose this particular proposal not because they fear being taxed too much, but because they fear being taxed too little. Or to put it more precisely, they fear that money will be spent without effect — and that this would be the worst outcome of all. As we move into more substantive areas of this discussion we find the lack of neutral parties involved in this effort even more troubling as we fear that the budgetary number was chosen, not based on an appropriate analysis of what is necessary to accomplish the goal, but, instead, because the proposal was designed by advocates, who chose the budgetary number because that was the number the advocates felt they could get approved. 5/21/2009

Got Produce? The Rent-Dissipation Hypothesis And The Issue Of Cui Bono comments that as we weigh the pros and cons of the industry launching a generic promotion program, we find ourselves frustrated by the kind of proposal being made and the process by which the industry is being asked to evaluate it. Today we consider the ancient issue of Cui Bono, which loosely translated means “to whose benefit?” We use the phrase just in its plain meaning and look to think about who could profit from such an enterprise. Also to be considered is how a successful program would not benefit all equally. The reason is that higher prices created by more demand create a “supply response” in which the supply rises to take advantage of the higher price. This is typically called the “rent-dissipation hypothesis.” 5/27/2009

Got Produce? What About FRESH Produce? our ongoing analysis of the proposal that the industry launch a generic promotion program saw most of our concern over The Produce for Better Health Foundation’s role in this situation revolve around procedural areas. Today we would like to look at a substantive issue, which also calls into question the involvement of PBH with this matter. PBH is obligated to promote, frozen, canned, dried and juiced product. On its web site, when asked about nutritional differences between fresh and frozen, it reads like a commercial for non-fresh product. There is a clear reason here for saying the truth — that the fresh industry competes with canned and frozen and needs to use its advertising to differentiate itself. 5/29/2009

Got Produce? PBH’s Hope to Be An Honest Broker Of Industry Dialog Is Tainted By Its Desire To Advocate our analysis of the proposal for a National Fruit & Vegetable Research and Promotion Order has often noted that many in the industry feel frustration that the advocates of the program have seized control of the supposed “dialog” and take it as their right to spend industry money solely to present their side of the debate. Even if PBH were able to get donors to specifically fund its efforts, it still would be assuming an untenable position. Why? Because PBH can either be an advocate of the generic promotion program OR it can be an honest broker managing the process for the industry — it cannot be both. PBH has taken on a dual role and the two roles are incompatible. 6/2/2009

Got Produce? What Is PBH’s Purpose If Not To Promote Consumption? explains we were very pleased to receive a letter from Kevin Donovan of Phillips Mushroom Farms because it gives us an excellent opportunity to analyze a few key points. We have no disagreement with Kevin on the matter of PBH starting a discussion on generic promotion. There are, however, better and worse ways of starting such a discussion. Money aside, the problem is not PBH’s involvement. It is the dual role PBH has taken upon itself. Had PBH decided to stay neutral as to the desirability of a generic promotion program but simply wanted to facilitate an industry discussion, that would have been reasonable. If you are going to start a discussion, there are two ways to do it and, unfortunately, the advocates took the wrong path. PBH is also a charity; its goal is to promote health through getting people to eat more produce. There is nothing in there about increasing the profitability of produce companies. The economics of the assessment, who benefits and who does not, create further complications. 6/4/2009

Got Produce? Has PBH Been Effective At Boosting Produce Consumption? points out that with all the attention being paid to the Produce for Better Health Foundation’s promulgated proposal for a Generic Produce Promotion Program, isn’t it reasonable to look at the effectiveness of the efforts that PBH has conducted on behalf of the industry for so many years? Based on data from the USDA’s Economic Research Service, the numbers show no meaningful consumption change in eighteen years.  Remember that this all took place during an unprecedented increase in affluence and obesity in America. It does show substantial increases in grain products and added fats — items we highlight specifically because they do not have big commodity promotion efforts — even while produce consumption is flat. Simply put, we cannot find any reason to think that PBH has had the effect of increasing consumption. 6/10/2009

Got Produce? Unvetted Generic Promotion Research Biased From The Start as we mentioned here, one of the big problems associated with PBH executives advocating for the proposed Generic Promotion Program for produce is that they lose credibility when it comes to doing research. In the research currently under way, the plan’s advocates made the terrible mistake of not getting buy-in on the validity of the proposed research from critics of the program. The advocates care only about consumption. Yet many in the industry would say that is a public health goal, not a business goal. If businesses are to fund a program, you need to make a case for a superior return-on-investment as opposed to alternative investments. Rather than dealing with this perspective in an authentic industry dialog, the advocates of the program are trying to bias the process by denying there is even any issue here. What a shame for the industry. There is no reason why this research could not have been vetted by opponents of the initiative. 6/12/2009

Pundit’s Mailbag — Generic Promotion Plan Does Not Allow For Differentiation our piece Got Produce? Has PBH Been Effective At Boosting Produce Consumption? brought this thoughtful assessment from Bill Vogel, President of Tavilla Sales LA who raises important issues in his letter. First, isn’t the real obstacle to increasing consumption not a matter of marketing, but a matter of product incompatible with consumer desires? Second, isn’t the kind of marketing and promotion we need really micro-focused on those products that delight consumers and more likely to be done closer to the product than by a national bureaucracy. The truth is that there are great tasting melons out there — just like Bill remembers as a child. There is good tasting stone fruit and wonderful mangos. Yet a national board, obligated to all producers, is unlikely to be the tool to market these differentiated products to consumers. 6/12/2009

Got Produce? Schnuck’s Mike O’Brien Tries To Add “Balance” finds we owe a great debt to Mike O’Brien, Vice President of Produce & Floral at Schnuck Markets for this letter, as it is gives us opportunity to reflect on the generic promotion program. It pains us that Mike would have found the Pundit coverage of this issue to not be “fair and balanced.” Yet, the very allegation points to a weakness in the case for a generic promotion program for the produce industry. If what we have presented is not balanced, it is not because we are suppressing one side. It is because nobody cares enough about that side to speak up. Or, to put it another way, the industry may not be balanced in its opinions on this matter. Mike also makes several specific points in his letter and we think it appropriate to address them. 6/16/2009

Pundit’s Mailbag — More Targeted Approach Needed For Generic Promotion received a note from frequent Pundit contributor Eric Schwartz who weighs in on the challenge of generic promotion, raising several points. We have urged a step back because the proponents of the proposal have not bothered to list any criteria to allow the industry to assess the reasonableness of its aims nor, after the fact, to assess whether the program was successful. The promotion also proposes to spend $15 million on measured media. This is significant because McDonald’s alone spends almost two billion. Eric also raises another point: That the choice is not national generic promotion or nothing. The “targeted and individual” approach to marketing, whether by commodity-specific promotion organizations or through corporate branded efforts may be more effective, especially in an industry like produce where a mango has little to do with a potato. 6/16/2009

Pundit’s Mailbag — PBH’s Effectiveness May Best Be Seen At State Levels our piece: Got Produce? Has PBH Been Effective At Boosting Produce Consumption? questioned if all the talent and money invested in PBH had actually helped achieve its professed aim of increasing consumption of produce. Because it questioned an industry and public health “sacred cow,” it brought a number of responses, including this thoughtful letter from Sharon Sass, R.D., Nutrition Education Advisor with the Arizona Department of Health Services who agreed to let us in on what Arizona is doing to utilize the Fruit & Veggies—More Matters program. We asked Pundit Investigator and Special Projects Editor, Mira Slott, to find out more. When we review the copious materials Ms. Sass offers, we see her efforts as only marginally related to increased consumption. More exercise, more low-fat as opposed to full-fat dairy consumption, a focus on the poor — Ms. Sass, quite appropriately, is looking to enhance the health and well being of the citizenry, and increasing produce consumption is just one facet of that effort. 6/16/2009

Got Produce? Will The Money Really Be There? thought it worth mentioning that we are not convinced that when all is said and done, the board will actually raise the $30 million a year the USDA says it will. Money is supposed to be raised by so-called “first handlers” who pay an assessment on their sales, not counting freight. But you can’t assume that business will be conducted in the same way when what are, economically speaking, “new taxes” are imposed. We’ve had some questions about that $30 million number from the beginning; in fact, at first we thought the processed sector was being wildly underestimated. If, however, we accept that the base USDA statistics are correct, then we can expect a significant decline in the amount of money actually raised for the generic promotion board as companies legally adjust their behavior to minimize their “tax” payments. 6/23/2009

Got Produce? Retailers Beginning To Look At The Fine Print Of The ‘Generic’ Proposal received a number of calls from retailers anxious to discuss the proposed generic promotion board. In general most produce executives at retail were for the board. Most are serious business people and don’t want industry funds wasted. So they are sympathetic to the idea that a real serious business case needs to be made that this will provide a positive ROI for the industry and, specifically, those who have to pay for it. Most retail executives, whatever their personal inclinations, respect the demands of the supply base, which is going to have to write the check, for an effective business case to be made before approving funding. Beyond that there are two other facets of this proposal that retail executives are just coming to understand and, as they do so, these retailers will find the proposal problematic. 6/23/2009

Got Produce? Will Big And Small Producers Ever Agree On Generic Promotion? our ongoing analysis of the proposal for a National Fruit & Vegetable Research & Promotion Board brought this thoughtful note from Veronica Kraushaar President of VIVA Marketing Strategies. Veronica is correct when she writes that those promotion boards that have failed tended to fail because large players didn’t feel they were getting value. The law under which the advocates are proposing to act on this new board has each “first handler” getting one vote. This may defeat the project because companies of large size may say they will oppose it unless the voting rights are refigured to correspond to volume. Otherwise, they could be “dictated to” by large numbers of small “first handlers” even though it is the big guys who are paying the bill. 7/1/2009

Does COOL Achieve Its Purpose? shares a note from an industry luminary suggesting we consider this issue. Our correspondent looks at the history and identifies a flaw in our public policy efforts. All too often, what is wanted is simply a victory of some sort: A law enacted, a regulation approved. Whether those laws or regulations ever accomplish what they were sold as going to accomplish is virtually irrelevant and rarely followed up on. Of course, this is not only an issue that involves the government. We raised the issue here of whether PBH was achieving its self-professed goal of increasing consumption? We have asked here whether the newly proposed generic promotion order is being proposed in such a way that there would be real metrics available for judging its success or failure? 7/7/2009

Pundit’s Mailbag — Measuring Success Or Failure Of Generic Promotion our piece, Got Produce? Schnuck’s Mike O’Brien Tries To Add “Balance,” brought this commentary from Fred Medero, Principal with Kincannon & Reed. We appreciate Mr. Medero’s weighing in on the issue and, indeed, we think he points to a key issue regarding any consideration of a generic promotion order for fresh produce: If it was to pass, how would we evaluate whether it was a success or a failure? What are we doing to ensure that this generic promotion program is created in such a way that success or failure can be verified? 7/7/2009

Got Produce? Ten Steps To Creating New Dialog On Generic Promotion explains how after months of studying not only the proposal for a generic marketing board for fresh produce but also the mechanics of how the “dialog” is being conducted by the advocates of the board, we realize the key problem: The advocates rushed into “dialog” when what the industry really needed was debate. PBH should really walk the program back and explain that in this recessionary environment, it is just not the time to have this dialog. They should withdraw the proposal as written. Here we offer our suggestions for a process that could lead to the industry ultimately making the best possible decision. To persuade is difficult, but in a free society, persuasion is all we have. 7/14/2009

Pundit’s Mailbag — Got Produce? Objection To Mandatory Component remarks that we don’t believe the support is there right now to pass a Generic Produce Promotion Board. We attempted to lay out a procedure by which advocates for such a program could prevail. Those who oppose such plans, though, were having none of it. Here is a letter from a Dick McKellogg, Director, Produce Merchandising at Lowe’s Foods Stores, Inc. explaining this point of view. We share his concern as to the casualness with which some have proposed such a mandatory program. Dick McKellogg’s letter speaks to the fact that to even consider going to USDA and asking them to hold a vote is a very serious matter. In America, we believe in freedom and voluntary action. To override such beliefs we need substantial consensus. The problem, of course, is that there is no such consensus. 7/23/2009

Got Produce? Survey Results Show ‘Disappointing Response Rate’ after a reshuffling of speakers at the recent Town Hall meeting on the generic promotion program, we found it amazing how far people will go to help you if they feel they are being given a fair shake. This is why we are pleased that PBH has released headline results from its industry survey regarding the generic promotion program. To us it is has been clear for some time that most people in the industry are not engaged on this subject, so the response rate would be very low. It wound up being only 8%. Of the 248 people who responded, 45% said they never heard of the idea and 47% were undecided. 8/5/2009

Perishable Thoughts — Sins Of Industry Can’t Be Cleansed By Generic Program explains much of the feedback from our discussion of generic promotion has identified the industry itself as the cause of low per capita consumption of fresh produce. We published one such letter, and received this Martha Stewart quote. We select varieties for good yield or easy transport, rather than flavor. We pick too early to catch high markets and then don’t properly refrigerate at retail and consumers are often disappointed as the flavor is irregular. Sins and all, there will be a produce industry in 10 years, but we think Martha is right to focus on the quality of the product. 8/5/2009

Got Produce? Generic-Promotion Expert Enters Debate With Some Shocking Analysis found that the Produce for Better Health Foundation asked Harvey Kaiser, a Cornell University Professor who specializes in the economics of generic promotion, to answer some questions that have been raised about the commodity promotion board. PBH summarized Professor Kaiser’s findings in three points, two of which we found somewhat shocking. The whole assessment by PBH of what Professor Kaiser believes is so odd that we were anxious to read the professor’s assessment ourselves. Fortunately, PBH has made Professor Kaiser’s piece, titled "Background Brief on Checkoff Programs," available. Here we’ve added our own assessment to the professor’s responses. 8/11/2009

Pundit’s Mailbag – Got Produce? Advantage Goes To Convenient Produce finds that in our extensive coverage of the proposal for a Generic Produce Promotion program we sometimes receive questions that find an intersection between the proposed generic promotion program and marketing dilemmas of the contemporary produce industry. Today’s correspondent has his finger on a vitally important issue, both health-wise and marketing-wise. The move to convenience products disadvantages some fruits; and trying to effectively market all this variety in a persuasive message is a marketing conundrum. Should such a broad board be established, Produce will be taking a leap into the great unknown. How will constituencies that represent all these varied items be kept happy and what is the best message to tie together all of these items? 9/4/2009

Got Produce? Look Closer At Packaging And Handling To Increase Consumption comments that during our coverage of the proposed generic promotion board for the produce industry, we’ve had quite a number of produce executives point out to us that they believe the biggest difficulty in boosting consumption is the fault of the produce industry itself — selling the wrong varieties, harvesting it before it is fully ripe, etc. Well we wanted to add packaging and handling to the list of industry vices. Should we even sell apples in bags that offer absolutely no protection to the product during transport? 9/29/2009

Got Produce? Cornell Professor Responds To Pundit Criticism… recognizes that in seeking sanity in the debate over the proposed generic produce promotion program, we have called for academic experts to contribute their viewpoints on the issues. Program advocates moved in that direction by asking esteemed Professor, Harry Kaiser of Cornell University, to weigh in. Professor Kaiser is undoubtedly an expert on generic promotion, but we actually proposed bringing in academics in a different capacity. If we want to encourage industry members to really access the best thinking on this subject, what we need to do is present the best thinking on both sides of the issue. We were pleased to receive a lengthy letter from Professor Harry Kaiser responding to a piece in which we analyzed a Produce for Better Health press release and the accompanying statement from Professor Kaiser. 10/2/2009

Got Produce? …And Spawns Virtual Debate On Generic Promotion continues our earlier article Got Produce? Cornell Professor Responds To Pundit Criticism… Here we are pleased to publish a lengthy letter from Professor Harry Kaiser of Cornell University responding to a piece in which we analyzed a Produce for Better Health press release and the accompanying statement from Professor Kaiser. It is a lot to read, but this is a big and controversial issue. If the industry commits, we are talking about spending $300 million over the next ten years. That is worth some heavy reading. 10/2/2009

PMA Convention Observations And Lessons For Produce Promotion thought this year’s PMA convention a hopeful sign for the industry as two giants each unveiled very consumer-focused initiatives. In fact, at a show where the trade’s consideration of a mandatory generic promotion program seemed to attract no interest, both Dole and Del Monte were attacking the consumption problem head on. Efforts like those by Dole and Del Monte show there are many ways to boost consumption. Some look at how great produce is and say it needs more promotion — the problem is messaging. Others look at the situation and say, no, the problem is with our offer — for example, our salad bags won’t open easily and we have no product in lots of places where people eat. 10/16/2009

Got Produce? Let’s Cancel The Effort And Start Afresh explains that since the very beginning of the proposal to create a mandatory generic produce promotion program the silence of the industry on the issue has spoken very loudly. It is time that the folks from United and PMA speak up and say that we need to set this initiative aside and start working to salvage PBH before that comes down in a whirlpool with this generic promotion initiative. Those who believe a mandatory assessment national generic promotion program can work and should be implemented can regroup, lick their wounds for a year, then put up some money and begin the multi-year effort of creating trade consensus on the need for and efficacy of such a program. 10/16/2009

Got Produce? PBH Puts Fate Of Generic Promotion In Industry’s Hands explains that in the past we've shown the intellectual independence to endorse promotion programs when they seemed likely to work and reject them when they didn't. Just as we issued a call to pass the apple assessment and a call to reject the watermelon proposal, we felt the need to state the obvious, and we did so in a piece we titled Got Produce? Let’s Cancel The Effort And Start Afresh. Now the Produce for Better Health Foundation has decided to do exactly that. Some want to believe it was appropriate for PBH to spearhead this effort, we don’t see the issue so much as a question of appropriateness; we see it as a question of effectiveness. And on that score, the answer is self-evident. What we will argue is that there are three really good lessons here for anyone looking to make anything happen. 11/9/2009

Got Produce? Next Move Is To Push For School Salad Bars in our discussion of the possibility of implementing a national generic promotion program, three things became clear about industry attitudes toward increasing produce consumption. First, that the financial contribution the industry can make to increase consumption is limited. Second, that maximum leverage can be gained through specific efforts by government and industry to make sure fresh produce is widely available. And third, that maximum effort should be applied to getting children to eat more fresh produce. An example of the kind of effort these three principles support is the ongoing effort of the United Fresh Produce Association to get a “salad bar in ever school.” United is urging produce firms to sign a letter that would indicate their endorsement of the Children’s Fruit and Vegetable Act of 2009. 11/13/2009

Got Produce? Increasing Consumption One Item At A Time: In Search Of Product Innovations points out that all the time and attention paid to the proposal to introduce a generic promotion board to the fresh produce industry won’t be wasted if it leads to a new focus on increasing consumption. Private companies play an important role in increasing consumption and so here at the Pundit we thought we would mention three examples of products that have helped us personally boost consumption and also raise concerns with another type of presentation that has the potential to depress consumption. 11/20/2009

We Have Our Own Selves To Blame For Poor Growth In Consumption discusses how increasing consumption is not just a matter of clever promotional schemes; it has to do with having a product that consumers will enjoy, value and want to purchase again. Part of this is some of the long term issues — what varieties we grow and promote. Yet we would say that the produce industry is often its biggest enemy. The thirst for short term boosts in sales leads both producers and retailers to enter into a kind of “unholy alliance” in which consumers wind up getting substandard product. 7/20/2010