The pandemic has posed many challenges, both long and short term for the industry. Right now, foodservice is in despair and retail is riding high. But nothing is forever. Some changes, such as the move of consumers to purchase online, may pose long term challenges to the trade’s ability to effectively promote and introduce new products.
Despite being well-financed, PMA announced the layoff of a number of executives when its physical trade show was cancelled. We all, of course, hope for a better 2021 with the vaccines now rolling out.
Still, sometimes moments like these give people a chance to move ahead. What should our industry associations look like in the years ahead? This is an issue we have been dealing with for some time.
With the start of the pandemic, we raised this question:
That brought a former chairman of one of the two national produce associations to share an informed perspective:
Then Bruce Peterson, who had deep involvement in both produce and grocery trade associations when building the Walmart produce program — including becoming Chairman of PMA — shared his thoughts with us:
Then a former Chair of one of the two big national produce associations, who has been involved with many produce institutions, wrote:
Now we have more input, this time from the grower/shipper side of the business:
I am not afraid to be vocal and use my name. I think this article is on point and very timely.
We have begrudgingly gone to PMA’s Fresh Summit event over the past 10 years only to protect our family name. If we don’t show up, our competitors will slag us off and say our business isn’t doing well.
In the old days, this was the only way for everyone to really get together, and it was amazing. Now it is an excuse to piss away money on all levels. Whether that is meals, booths or entertainment that goes on well longer than necessary.
It is an excuse to promote the “good old boys” mentality. Nothing pisses me off more than being at a dinner, whether I am paying for it or not, and to watch everyone order seafood towers and surf and turf and buy bottles of wine by the price, only because they know someone else is paying.
It is complete trash. If you don’t behave like that at home when you are paying the bill, why then should you behave that way when someone else foots the tab? Honestly, there have been many times when I won’t even order food at these dinners, just because I know there will be plenty to go around. How in the world can you say you want to get rid of waste when you are promoting it?
Fight the good fight my man.
Director of Sales and Retail
Success Valley Produce
Backus’ note expresses a common feeling in the industry. Yet we are uncertain that the solution is clear.
We should say that we have had a wonderful experience exhibiting and sponsoring at PMA’s annual convention. We actually launched Pundit sister publication, the pater familias of our company, PRODUCE BUSINESS magazine, at the PMA back in 1985 in San Francisco!
We have spent over $3 million over the years at the PMA event: this includes exhibiting, sponsoring, doing special events there such as our Rising Star Reception, saluting our 40 under Forty. This includes flying in staff, staying in hotels, team meetings and meals, entertaining customers, prospects, editorial subjects and industry friends.
We would say the returns were good. But, as we grew and became more established, it is fair to say that the participation shifted from offense to defense.
Yet this strikes us not as an indictment of PMA, but as a commentary on the way of the world. If there is a show devoted to, say, cars, and it is 2003 and you are Tesla and have just launched, it is all upside and aggressive marketing for growth. Same year, but let the company be GM, Ford or Toyota, the upside is much smaller, the downside much greater – so a lot of the marketing is defense.
In produce, even more than in the automobile industry, much of the marketing is defense because production is often fixed. When things are good, a car manufacturing operation can speed up a line, can add a shift or have people work overtime. In the end, they can add a factory.
The produce industry, however, is filled with companies that own or farm a fixed acreage, and that is what they have — although, of course, as technology advances, they may have higher-yielding plants, better ways of planting, etc. Their market share is mostly fixed. Sure, they can always buy a competitor or start marketing for another producer, but none of this increases overall production.
So, many well established producers, which grow fixed acreage of commodity crops and have clients signed up for their production, will see the event’s availability of marketing opportunities as more a program to help people “steal” their customers than as an opportunity to grow. When they participate, these producers will also see a lot of unnecessary expense. They were going to sell 500 acres of Honeycrisp at the market price no matter what – now they are out to dinner looking at, and paying for, seafood towers and expensive wine.
Some companies fight this. When we were young and didn’t know the rules, we were once doing an event and had an important executive from Costco speaking. We happened to see him and an associate at a restaurant that night when we went to have dinner with another group. Without telling him, we picked up his bill as a thank-you for his coming to speak, and we left the restaurant. He approached me the next morning in a kind of panic, saying he could lose his job for letting me pay. The rules weren’t simple. He was allowed to join our “speaker dinner,” but he could not accept my picking up his tab at a restaurant. He wrote us a check to reimburse us.
On the other hand, it is very difficult for a company to even know what its people do. We remember when we were working on the terminal market, and there was a customer who we just couldn’t sell. But we found it worth marketing to the guy because if we had something he liked, another wholesaler down the block would show up and buy it. Maybe it was more convenient for the customer to consolidate his order or, maybe, he had a “special arrangement” with the other buyer and wanted the business to go through his organization.
One question is whether the realities of the industry will change because of who owns the trade show. In other words, if PMA sold its trade show to a private company, would that change the dynamic? For many years in the produce industry, the United Fresh Show – which used to be the largest show in the produce industry – had grumblings from exhibitors who didn’t feel they were getting value from the show because PMA had become the dominant buyer-attended show — but these same companies didn’t want to be seen as not supporting United.
This Pundit, working with Alan Siger and others, focused on finding ways to make it possible for companies to support the government relations aspect of United, even if they didn’t find exhibiting at its trade show a good use of funds.
Our sense, however, is that people mostly do not support the Fresh Summit event in order to support PMA. It is a marketing decision, and, as Backus mentions, many who have to pay the bills would rather not do so, but marketing dynamics often lead marketers to spend money that, if the world was different, they would not have to spend.
Indeed, one suspects that people support PMA in order to get a discount on Fresh Summit. Right now, if you want to apply to be an exhibitor at the next PMA, you need to send $1,500 as a deposit. If you are not a member of PMA, you have to send $3,000! That is a $1,500 difference. A small company only pays $1,580 in dues to PMA, so one is really encouraged to be a member!
Numbers such as this make one question how deeply are many PMA members dedicated to the association. Put another way: How many industry members feel that what PMA does is worthy of their financial support — even if PMA didn’t give member discounts on its events? This is an important question.
The broader question, though, is what all this has to do in 2021 with running a trade association? Put another way, if PMA didn’t exist today, would we as an industry create it? And why? What would we expect this new creation of ours to do that other associations aren’t doing or couldn’t do?
It seems pretty easy to answer what the purpose of United is: Government Relations.
Now, imagine that we sold Fresh Summit. The National Restaurant Association sold its show in late 2018 keeping a minority stake — and this pandemic shows that business always carries risks — so it is probably very glad it did!
So if PMA sells its event business, sells its headquarters, and we took all the money and put it in a foundation to help the produce industry, what would the industry want PMA to do? What is its raison d’être — its reason for being.
Over the years, we have heard Bruce Peterson of Walmart fame ask this question many times.
This is a tough thing to resolve because few see an upside in being seen as an enemy of an industry association. But this process of analyzing what the industry would build if it was starting from scratch is really an important effort.
If you feel you have thoughts that could help the industry to advance, please let us know here. Let us know if you want to maintain confidentiality.
We thank and commend Backus Nahas for his bravery in being willing to express his thoughts.