You are here
As its Fresh Summit draws near, the Produce Marketing Association has a lot on its plate, from getting more aggressive on government issues, to helping the industry prep for a high-tech future, to bulking up its education programs. The challenge for Bryan Silbermann, president of the Newark, Del.-based trade group, and Steve Junqueiro, its chairman, will be to set priorities and allocate resources in a fast-moving market.
Progressive Grocer: The produce industry has not had a particularly easy time of it lately. What is the state of the fresh produce business right now, and of PMA?
Bryan Silbermann: I feel as though we've turned a corner over the last few months, vs. where we'd been for the last couple of years as an industry. It's been tough. The post-911 impact has been considerable. But generally people's optimism seems to be on the rise.
The state of PMA is very good. We just came out of our executive committee meeting, which is a good time to review. The association is financially very strong. Membership satisfaction seems to be high, and the best measurement of that is the retention rate. Relative to two years ago, retention has gone up 2 percent, which for a trade association in this climate is excellent.
PG: And membership growth?
BS: It's been pretty flat on a net basis for five or six years. Obviously consolidation has affected that. There are growth segments -- international membership is one -- and I still think there is a lot of potential for growth in foodservice. Meanwhile it is nice to see retention go up, but are we going to be complacent about it? Hell, no. A lot of the talk at our executive committee meeting was about what strategic direction we want to go in.
PG: And what direction is that?
BS: The big question in the last couple of years has been what our role should be in Washington, D.C. PMA needs to be more aggressive in the government relations arena, in the self-regulatory arena -- but with a marketing focus. The country-of-origin labeling issue really galvanized the industry this year, and PMA took more of a front-and-center role on this than historically any other governmental issue. You are not going to see PMA become a lobbying organization for the entire produce industry on every issue. We will get involved in issues that impact on marketing, and where other organizations are not doing a meaningful job. When we came to the party on COOL, there wasn't anybody putting across the message that we felt needed to be put across, that this mandatory bill was just bad for the industry.
PG: Are there any other shifts in priority for PMA?
BS: A much higher commitment to industry technology and standards. We are going to throw some big-time resources into this. We are doing a lot of work in 10 different areas, from RFID to data attributes to EPC codes to RSS-14, but we have not really had the resources to be influencing the direction the industry is taking with these technologies.
PG: Why emphasize this now?
BS: More demands being are put on players at all levels, to advance their use of technology. They need guidance, help in the data attributes area, for example. PMA has been working on an industry product database, which should be done sometime this year. Its core is standard, detailed descriptions of produce items. Actually filling in all the data has been a massive task. It doesn't matter which technology we are talking about; until the industry is speaking in a common language in defining its products, all the other tech stuff can't be used properly. Right now everyone is making do by communicating on a one-to-one basis.
P.G.: What stands in the way?
BS: Here is the biggest challenge: Produce has always lagged behind other food industry sectors on data capture. But now you are in an e-commerce world, with people pushing efficiencies in distribution logistics, and not just at store level. People are saying the competitive position of produce as a category is being adversely affected. If we are going to prevent produce from sliding further behind the rest of the food industry, we have to step up to the plate.
PG: Speaking of slipping further, many trade shows are in turmoil, and the relevance of some shows is being challenged. What's going on?
BS: Some trade shows have fallen substantially, especially in terms of attendance. I guess it goes back to a couple of things: You can never be complacent, never satisfied; you have to constantly be putting in more energy and reinventing what you do. Those organizations that have not been diligent at reinventing are the ones we are seeing a fall-off from.
Having said that, there is no question that the trade show piece of what PMA does has gotten bigger and more vibrant. We are focused on improving the Fresh Summit. We've taken apart the education program and created a new format of 10 tracks positioned to allow folks to easily pursue their core interests. And we've reworked the exposition. Last year, for the first time, we had the Floral Merchandising Center, in which we constructed a model floral department, all done by members. Now you will see a Fresh Ideas Marketplace, with a floral theme and also ethnic and prepared meals merchandising themes. The perception is of the best and brightest people having come together and asked, "Have you thought about this?"
PG: The PMA Foodservice Conference also continues to grow. What's happening in the industry on the foodservice side?
BS: When I first joined PMA 21 years ago, the conference had just started and it was a gleam in some people's eyes. Now fresh produce is a center-of-the-plate item, and fast-food chains are re-creating their image using produce. It's part consumer demand, part industry innovation, and part social and legal pressure. On the consumer side it's been a glacial movement toward more fresh foods, tied to nutrition and health. But the obesity issue over the last 12 months has been the key catalyst for the move by fast-food restaurants into salads.
I also think we are getting better at the taste profile, but this is the biggest single barrier to increased produce consumption, and it applies to foodservice and retail. Far too much attention has been focused on yields, efficiencies, shelf life. These are critical, but where is the consumers' need in all this? I've been preaching that we need to increase the focus on taste, and I have yet to find an audience that does not agree with that view. Still, not enough people act on it.
PG: If everyone agrees, what's holding up the progress?
BS: Something called human greed, I guess. Farming has always been a supply-driven business. It is changing to a consumer-driven business, but when your business model has been built historically around yields per acre and the price that you get from the next person down the stream, you have got to be careful before you say, "You've got to reduce the yields to have a better-tasting variety of product, and at the end of the growing season you are going to get a price that will compensate for that lower yield." It's difficult to make happen as long as you get a lower-yield, better-tasting product competing with an oversupply, and most buyers say, "Sure, your product tastes better, but I'm still not going to pay you extra." I think the business is changing slowly, but it will take a huge commitment from the buy side.
PG: Will the ascendancy of produce in foodservice help here?
BS: What we will learn going forward is that the industry is going to have more demanding buyers on the foodservice side than the retail side, and that in turn is going to drive improvements in the taste profile of fresh produce throughout the pipeline.
PG: Will you look to foodservice as a particular growth area for PMA?
BS: It always has been. A lot of innovations happen in foodservice, so a lot of innovation at PMA also happens first on the foodservice side. You will continue to see PMA devote a lot of attention to foodservice. And the growth of foodservice as a portion of consumer spending is clearly a threat to retail. The tables are turning to more and more food prepared away from home at least, if not eaten away from home.
PG: What other consumer trends were important in the past 12 months, and what's the outlook?
BS: The obesity issue is clearly huge. Overall the impact's been more good than bad, but where it's been bad, it's been bad. The fallout from the Atkins movement [at retail] has also clearly been a response to obesity. Certainly potatoes, orange juice, and carrots have suffered. But I think the Atkins mania has peaked; it is a fad, and Americans tend to lose interest in fads fairly quickly. The emphasis has already begun to turn back to the calorie debate.
PG: Is concern about food safety a consumer issue?
BS: Maybe it's more of a governmental and public affairs issue. There have been some high-profile incidents, but the level of attention they have gotten has been limited. For the most part the government has become much more aware of its potential to throw markets into turmoil. But in some areas the government has gone overboard, such as in the Bioterrorism Act and in the Produce Safety Action Plan. We are saying this needs to be tied to the real world. Let's talk about the scope of the problem in the context of all the volume that moves safely through the system. Let's not make blanket statements about increased numbers of outbreaks involving produce, as the government has been tending to do. The FDA is certainly making a lot of noise, and a lot of it is valid noise. But we need to turn the noise into a direction for the industry.