Where the subject may be perishable
but the insight isn’t.

PMA/United Merger Fresh On Our Minds

Jim Prevor's Perishable Pundit, October 27, 2006

It has been many a convention since the Pundit heard so many people expressing a desire to see the Produce Marketing Association and the United Fresh Produce Association merge. Perhaps more importantly, it is the first time that the desire for a merger typically did not grow out of some self-interest, such as a desire to not feel pressured to exhibit in two shows, but, instead, grew out of a genuine concern that two associations on the national level may well be hurting the interests of the industry.

The spinach/E. coli crisis impressed many with three ideas:

1. There is a need for the trade to have a single front in Washington.
2. There is no clear distinction between what PMA and United are doing in D.C., and there is a lot of duplication and waste between the government relations efforts of the two associations.
3. Whoever is doing government relations hasn’t been successful in building the kind of relationships that are crucial for the industry to create and maintain.

Number three is probably the most important. When United’s President Tom Stenzel indicated (at PMA’s town hall meeting on the spinach crisis, which we dealt with here) that he thought the key to understanding the FDA’s actions was understanding that they didn’t have faith in the produce industry and our products, the obvious question is: Whose fault is that?

The bottom line on this crisis is that the FDA’s action to impose a blanket recommendation not to consume spinach bespeaks very weak relations with the produce industry. It implies little confidence in the trade and it implies that our government relations efforts haven’t been particularly effective.

The key crucial obligation of produce industry government relations efforts is to have a great relationship with regulatory decision-makers so that the instinct of these decision-makers is always, “The produce industry is doing the right thing so this must be an aberration,” and “Let me call my friend over at the produce association and find out the situation because he is knowledgeable and gives me the straight story.”

That relationship wasn’t there.

In light of this failure, industry leaders are of a mind to reorganize. My sense is that the boards of both United and PMA would agree. The issue is really what does a merger mean?

PMA is a fantastically successful organization. This was evidenced in San Diego, where they realized record attendance and record booth sales despite industry consolidation. It is also evident by the fact that PMA has sufficient surpluses to fund industry needs, such as the recent announcement of $1 million to fund food safety initiatives.

United has valuable assets — a superior scientific/technical ability over PMA, a D.C. office in proximity to government offices and many important programs such as its Produce Industry Leadership Program. But its financial future is rocky with its trade show’s future up in the air, as the FMI show, its co-locator, has an uncertain future. In addition, there is dissatisfaction among many companies that the dues United charges are too high.

PMA is too successful to do a merger similar to what United did with IFPA. It seems unlikely they will agree to dramatic changes in governance such as doubling the size of its Board of Directors. PMA’s division structure, in which retail and foodservice drive all the decisions, has proven effective; PMA won’t want to dilute that effectiveness.

But I bet the Board of PMA would be perfectly willing to merge the associations if governance was not dramatically altered. They would operate the D.C. office as the headquarters of the produce industry’s lobbying efforts, bring the scientific and technical competency into PMA, and probably port United’s leadership program over to the new PMA Education Foundation.

Although the name would be an emotional issue, I would urge the PMA board to consider a name change, perhaps even adopting United’s name — partly because Produce Marketing Association is not an accurate description of what PMA is doing even now.

Mostly, though, because I can still hear Bob Carey, the longtime President of PMA who presided over its transformation from virtually nothing to a major industry institution, reminding his board as he reached the twilight of his involvement with the association, of how in its early days PMA sought to merge with United and it was rudely dismissed. He urged some magnanimity. If PMA got the governance, it could be generous with the name.

When I was in South Africa, it was explained to me that Nelson Mandela, in pursuit of a peaceful transition to black rule, often used symbolic means to demonstrate this commitment to making things work. For example, Mandela’s supporters urged that the black-run governments should adopt as the new national anthem the hymm, Nkosi Sikelel’ iAfrika (“God Bless Africa” in the Xhosa language), which had served as the anthem of Mandela’s movement, the African National Congress, since 1925.

This was in opposition to the white-run National Party that wanted to keep Die Stem van Suid-Afrika (In English “The Call of South Africa,” which had been the anthem since 1957 (superseding God Save The Queen).

Eventually Mandela arranged for a new hybrid anthem using elements of both. Perhaps keeping the first two English lines of the anthem in our minds might allow for some symbolic give to make this happen:

Sounds the call to come together,
And united we shall stand