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Perishable Pundit
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In Another Move To Court Retailers, United Fresh Joins FMI And American Meat Institute To Co-Locate Event in 2012

For 5 years, from 2004 to 2008, United co-located its trade show with the Food Marketing Institute event, with four shows in Chicago and one show co-located in Las Vegas. United worked hard to sell the value of being in a venue that focused on the bosses of the trade’s largest customers.

Rather unceremoniously, the Food Marketing Institute, at the behest a few large members, severed ties with United and other co-locators and became an every-other-year trade show after the 2008 Las Vegas event. FMI is currently conducting its own trade show again in Las Vegas.

It left some bad blood, but business makes strange bedfellows and now United and FMI are friends again, and they added in the meat folks as well:

American Meat Institute, Food Marketing Institute and United Fresh Produce Association to Co-Locate 2012 Education and Trade Events in Dallas, Texas

Side by Side Shows Offer Added Value, Increased Opportunities for Attendees and Exhibitors

WASHINGTON, D.C. — The American Meat Institute (AMI), the Food Marketing Institute (FMI), and the United Fresh Produce Association (United Fresh) today announced the co-location of their premier trade shows — the FMI Exhibit and Education Event, the AMI International Meat Poultry and Seafood Convention and Exposition, and United Fresh — beginning in 2012 at the Dallas Convention Center in Dallas, Texas.

The AMI Expo will be held April 30-May 3, 2012, and the FMI Exhibit and Education Event and United Fresh will be held May 1-3, 2012.

The three shows will offer their own exhibit halls, as well as unique education programming for their own attendees. The partners will explore potential joint programming and networking events.

This marks a reunion between the FMI Show and United Fresh, but it is the first co-location of either group with the AMI Expo. This co-location creates an event that connects the meat processing, fruit and vegetable, and retail industries to create synergy for all exhibitors and attendees.

“We are thrilled to launch an event that will encompass all aspects of the industry in one location to provide a continuation of our commitment to bring trading partners together, foster collaboration and build a strong industry community,” said Leslie G. Sarasin, president and chief executive officer, FMI. “This co-location provides the opportunity to foster leadership education opportunities that span across the industry and bring more depth and increased value to retailers from the front-lines to company headquarters.”

AMI President and CEO Patrick Boyle welcomed the partnership opportunity. “Now, in addition to state-of-the art technology and cutting-edge education, AMI packer processors have a third compelling reason to attend the AMI Convention and Exposition — thousands of their retail customers in one place,” Boyle said. “Attendees will benefit from a wide array of joint educational programming. Exhibitors at all three shows will take advantage of the expanded marketing opportunity and additional traffic on the show floor.”

“We’re pleased to once again co-locate the United Fresh 2012 Fresh Marketplace and FreshTech expos with FMI based on the very positive experience of attendees at both of our shows in the past,” said United Fresh President and CEO Tom Stenzel. “With AMI, we’ll now have an even stronger platform for increasing the attendee value proposition for all three events.”

“The FMI Education and Exhibit Event is the largest and most comprehensive food industry conference and exposition in North America, attracting approximately 450 exhibitors and more than 10,000 attendees from close to 100 countries representing the retail industry, including supermarket retailers, independent operators, wholesalers, mass merchants, distributors and suppliers. The AMI Expo attracts more than 450 exhibitors and 10,000 attendees from 100 countries at all levels of the meat and poultry industry, including executives, plant managers, purchasing agents, engineers, researchers and operations managers. The United Fresh show will attract 300 exhibitors and 5,000 individual attendees.

In our recent piece, “A+ For United’s Las Vegas Convention Effort; Will New Orleans Be A Winner?” we made this statement about United’s plan to move the show to New Orleans in 2011:

Whether or not the event will get enough retail traffic to make it a worthy investment for exhibitors focused on selling retailers fresh produce is very much an open question.

This co-location is an attempt to answer that question. Although the meat show, which is geared toward meat processors, is more similar to the old IFPA show, the FMI show is focused on retailers — though not the produce-specific personnel.

So it means that United plans to stay in the business of doing a trade show designed to attract exhibitors who want to sell to retailers.

We wish United well and understand the sense that this is both where the money is to fund the association and that the convention and trade show is key to keeping marketers engaged with United. We are still not certain it is the right approach.

United is on something of an upswing in the long competition between PMA and United. Although credit goes to staff and the board for making some strong decisions, most of the credit has to go to President Obama and the heavily Democratic Congress.

A more activist administration and Congress, a government more interested in regulating, legislating, taxing, funding initiatives, etc., makes an organization focused on lobbying and government affairs more important and relevant.

Although PMA has upped its commitment to being an important information resource for government agencies and Congress, United, with is D.C. location and outright lobbying emphasis, is almost inevitably going to rise in the perception of its importance to the industry when the government is more activist.

We can expect to hear some dissatisfaction from big exhibitors who don’t want to have the burden of exhibiting at two shows. Our advice to those exhibitors has been that if they don’t think a show will be profitable, they shouldn’t exhibit there. After all, if the goal is to support an association, there are a lot of ways to do that more efficiently than buying a booth. Do a sponsorship, make a donation, etc. To spend a few thousand dollars buying a booth and twenty times that putting it up, flying staff in, wining and dining, makes no sense unless you think that is profitable for your business.

This is all true, but not the whole truth and so we understand the feelings of the big marquis companies that want to support United. Although financially it seems to make sense to send a check, trade shows depend on people, and important names attract important attendees. So an exhibitor contributes something intangible to a show, something beyond money.

The bigger issue, though, is simply this: In a time of activist government and when government lobbying has become a crucial activity, how will the produce trade finance its government relations efforts?

Most of the interest in a PMA/United merger is an attempt to address this fundamental issue: PMA has a highly successful business model and much of this is reflected in its very successful Fresh Summit event. This has produced surpluses that have allowed PMA to fund initiatives such as the Center for Produce Safety and the Produce for Better Health Foundation, to which PMA just donated another $250,000.

But maybe the urgent need now is more funds to lobby inside the Beltway. One wonders if a deal couldn’t be struck… what if United gave up its retail-oriented event and PMA gave it some money for lobbying? Then United could boost its DC event that was once called the Congress of Committees and is now called the Washington Public Policy Conference into its national annual meeting.

PMA would eliminate its only national competitor in the trade show business, United would both get money to enhance its lobbying effort and be able to focus on its DC mission and the big exhibitors wouldn’t feel obligated to support two national shows.

Short of merger, that might be a direction to consider.




Freshway’s Traceability System Worked Like A Charm: FDA And Buyers Don’t Care

With the industry focused on traceability — which we deal with today here and have dealt with for some time — it is worth looking at the way food safety agencies and buyers react when there is both good traceability data and a foodborne illness outbreak. The short answer is they ignore traceability.

In this case, Freshway Foods announced a voluntary recall of a particular lot — tracking numbers starting with 117 — on May 6, 2010. They made this recall because the state lab in New York state had identified a dangerous variant of E. coli — E. coli 0145 — on a sealed bag of foodservice product.

So, for about 15 minutes a traceability system worked as intended. The FDA had no trouble tracing back to Freshway Foods, and Freshway had no trouble identifying the relevant lot, and the source in Yuma, Arizona, that supplied the romaine.

Back when this issue was first being raised, Bruce Peterson, then Senior Vice President and General Merchandise Manager of Perishables at Wal-Mart, urged the industry to emphasize traceability in large measure because sitting at his desk at Wal-Mart he saw that every day vendors of all kinds of products had to do recalls, but they didn’t paralyze the industry. Good traceability systems allowed them to delineate the extent of the problem and recall specific lots or batches without causing the kind of total industry chaos we saw in produce with the spinach crisis of 2006.

But Freshway’s virtually perfect traceability systems led to very different reactions both by government and buyers than typically happens if a batch of canned soup has to be recalled.

First, the FDA did not accept limiting the recall to the implicated lots and requested that Freshway Foods expand the recall to encompass any product with romaine from Yuma.

Acting with an “abundance of caution”, Freshway quickly complied. That was very cooperative of Freshway but, in fact, the FDA’s request made no particular sense. After all, this other product could come from totally different farms and fields, completely unrelated to the implicated lot.

But the buyers were actually way ahead of the FDA. The three colleges which received recalled product decided to remove everything from this supplier, recalled or not, from Arizona or not. More “abundance of caution”.

We mentioned before that one of the concerns of the industry is that buyers won’t ever actually care about lot-specific traceability. That if there is ever a problem, they are going to remove everything. This is partly out of an “abundance of caution” but mostly because they don’t trust their own workforce to be able to make careful distinctions between lot numbers. Recalls don’t cost buyers anything; they bill all costs back to the vendors, so why take any risk that their own employees will leave an errant bag… better just to dump it all.

Which raises this question: Traceability systems have to be calibrated to generate useful information. But if both the regulators and the buyers are going to implicate whole companies and whole valleys, regardless of how specific the traceability is, how specific do we exactly need to be when it comes to fresh produce?




The Great PTI Leadership Let-Down

Our extensive discussion of traceability brought us to our most recent piece, titled Problems Persist With PTI, and this piece brought a response from a man who has been in the forefront of the trade’s traceability efforts, Bruce Peterson.

Now running his own consultancy under the name Peterson Insights, Bruce worked on the grower/shipper side as President/CEO of Naturipe Farms, and is, of course, best known in the trade for his founding role in establishing Wal-Mart’s produce and perishable operation.

As always, you provided a thought provoking — and evoking — piece on PTI and you offered many salient observations. But I thought I might offer some additional thoughts on this important subject.

In my mind, PTI never set itself out to be a system wide “solution” to traceability. The steering committee of PTI absolutely recognized the complexity and challenges associated with providing transparent supply chain visibility that would allow for some degree of trace-back capabilities at the case and pallet level. It is important to remember the climate in which this discussion was taking place.

As you recall, the industry was reeling from a crisis in which people died from consuming a fresh produce item. Major newspapers were routinely talking about “dangerous” fruits and vegetables. And several things became apparent in the produce supply chain:

1. While most major grower/shippers and most retailers had — and currently have — a product trace-back system, everyone had their own nomenclature and process. So while you had some degree of “vertical” traceability, you did not have horizontal traceability.

2. While the threat of government regulation was not imminent, there was concern that in the absence of the industry attempting to wrestle with this issue, the government might “weigh in”.

My understanding was that PTI was never a “destination,” but the start of a “journey.” And we should also remember that it was envisioned that it would be 7 years before the elements of PTI could be enacted. It was clearly understood that produce traceability was a huge undertaking and over a year was spent on trying to “take the first bite out of the elephant.”

For me, the achievement of PTI was to get a common consensus on nomenclature, that being assigning a G-TIN as a prefix to a product code. Without a common method of nomenclature, you would NEVER have the opportunity to provide ANY degree of system-wide transparency.

I agree with you that PTI is exponentially more complex than setting PLU standards, but it still comes down to the same thing. Major receivers have to agree on a set of standards and then execute those standards in their company, with their suppliers. And don’t dismiss the adoption of PLU standards as something that was easy to do within a company. If you recall, retailers had their own coding systems and had internal system support that matched those systems. The produce leaders at the time had to go to their respective company leadership and adopt the industry standard. How Dick Spezzano, Bob DiPiazza, Harold Alston, and others did that was invisible to the industry, but they got it done. So when they went to the industry and said that they were going to adopt those standards, they did it.

We need to remember something else as well. The PTI committee worked on this for a year before the guidelines were released. If the members on the committee were having internal challenges getting it accomplished, they needed to say so. And if they felt reluctant to make their voices heard, then that’s a pity. Because for me, the tragedy of PTI is not the fact that it is not a complete, system-wide solution to traceability. Again, I don’t think it was ever postured as such. For me, the tragedy is that some very notable companies said publicly that they intended to “begin the journey” and then, for whatever reason, didn’t follow through.

I recognize this is easy for me to say as I don’t have a “chip in the game”, so to speak. There may be, in fact, some very tangible reasons why a specific company is not going to do what they originally said they were going to do. But those leaders need to summon up the courage to let the industry know where their company stands. To continually reaffirm that “everything is on track” is disingenuous because those trying to comply are running into a lot of push back from those very same receivers.

You can build a case that association membership, at the volunteer level, is perhaps different today. I can’t speak to that. And it’s also very true that the respective staffs at these associations continue to become more sophisticated. But as far as I know, no one on staff cuts a P.O. No one on staff has a receiving process. No one on staff has any experience at all running a complex supply chain. So those members of the volunteer leadership that DO those things need to lead this initiative.

For the most part, those people have more financial responsibility in a week (and in some case, a DAY) than all of the trade associations COMBINED do in a year! And THOSE are the voices that need to be heard

— Bruce Peterson
President
Peterson Insights
Bentonville, Arkansas

Like most things in life, Bruce’s letter reminds us that this comes down to leadership, a subject that has been a frequent subject of our attention.

We would agree. Yet we would also say that certain conditions tend to encourage certain behaviors. Bruce is correct that there are certain companies that said they were going to do certain things and haven’t done them. Obviously nobody can think this to be exemplary behavior.

But the truth is that some companies signed onto this initiative under threat of what was, in effect, public shaming by their own associations — this led many people whose silence would have spoken volumes to sign up.

What is done is done, but the question is what kinds of mechanisms are more likely to generate honest feedback?

Some of these are tools. When the Pundit conducts focus groups where people’s opinions are heavily influenced by both the moderator and by fellow participants, we use all kinds of mechanisms to make sure this influence is minimized. To start with, the moderator has to be convincingly neutral as to the outcome. Then you have to use all kinds of tools, such as secret ballots, to find out what the group is really thinking.

It is also true that the discussions over PTI were kept needlessly confidential. We pushed here to add a wholesaler to the group, a constituency that had been completely neglected. But it is not clear why anyone should have been excluded who wanted to participate and, more important, there were many bright and knowledgeable people whose input was never received because everything was kept top secret.

To us, it has echoes of the discussions over proposals last year for a generic promotion order — an industry-wide proposal, which would have needed mass support to succeed, but was negotiated in secret and then “explained” to everyone.

So the PTI meetings were closed, transcripts were not released, nobody but the selected few was in on the meetings.

There was a decision made that closing the discussions would make it easier to come to agreement. This is undeniably true. But there is an iron-clad trade off — it also makes it harder to get support for the agreement.

That is really what has happened here. Because there was no transparency, many didn’t pay any attention. When it finally came time for implementation, people who had not focused on the issue suddenly raised a red flag.

Also, many who “agreed” didn’t really have the authority to agree. This is particularly true at retail, where the companies handle many different products. Retailers don’t want 100 traceability systems, so they want a solution that covers all their perishables, not just produce.

When Bruce speaks of the internal battles that great produce retailers of the past have waged, he whispers a secret truth. If Wal-Mart, Kroger, Safeway and Supervalu at retail and Sysco, US Foodservice, Markon and Pro-Act on the foodservice side all actually implement PTI at their facilities and require PTI compliance of their vendors, then PTI will be the new standard and will gradually become ubiquitous as other buyers sign on, confident that the vast majority of product out there is PTI-complaint.

If these eight companies — signatories all to PTI — don’t implement it and don’t limit their purchases to PTI-compliant product, then it will not become a standard and no amount of press releases from PMA, United and CPMA will change that fact.




“You’ve Restored Our Faith In Humanity” Award

When the Pundit was a teenager, he realized one day on a visit to Manhattan that his wallet was missing. Then he received a call from a stranger advising that he had found the wallet — complete with money and all the cards — on the floor in Grand Central Station, where the Pundit had been that very day.

The most logical explanation was that it had been pick-pocketed and, for some reason, the pick-pocket dropped the wallet, possibly fumbling it or running because he saw a policeman approaching or otherwise got scared.

At his suggestion, we had arranged to meet the good Samaritan who found the wallet at The Harvard Club in New York City, and when we received the wallet, which included a not insignificant amount of cash, we proffered a reward but the Harvard man refused.

Told the story, the Pundit Poppa said that the man didn’t need or want money from us and what we should do is write a letter telling the man he had restored our faith in humanity — which we did.

The story comes to mind because, every once in awhile, something happens in this industry that also serves to buttress our faith in humanity.

Such an event happened at the Las Vegas convention of the United Fresh Produce Association, and it prompts us to offer the first ever Perishable Pundit “You’ve Restored Our Faith In Humanity” Award.

This first iteration of the award is granted to Lisa McNeece, Vice President, Foodservice and Industrial Sales at Grimmway Farms.

It has become a tradition at United that the Leadership Classes sell raffle tickets. The prize: 25,000 smackeroos. Last year’s winner, Gina Nucci, Director of Foodservice Marketing at Mann Packing Co., used the $25,000 to contribute toward the cost of her wedding and honeymoon.

This year Lisa McNeece was enjoying the closing banquet that United hosts, and Phil Gruszka, Vice President of Marketing at Grimmway and a member of 15th Leadership Class, was selling raffle tickets. The revenue from the raffle goes to United’s Research and Education Foundation.

In any case, when Phil approached Lisa to buy tickets, she said she would buy ten tickets from Phil and that if he sold her a lucky ticket, one that won the $25,000 prize, she would split it with him.

Lo and behold, later that night, after the winner was drawn, Lisa started getting texts and calls — telling her she was the winner. She thought her friends had conspired to pull her leg but, in fact, she had really won.

Now there was nothing in writing, there were no witnesses, a lesser person would have been tempted to keep the whole windfall. But not Lisa McNeece.

She immediately reached out to Phil to remind him that he was entitled to half the winnings. She is a woman of her word.

One wonders if there is enough karma in the world to say that Lisa won because she was willing to share and willing to be true to her own word.

In any case, in an industry where Moral Responsibility Ratings are at least as important as credit ratings, it points to why Lisa’s career has been so exemplary. In a world where happiness is determined as much by the caliber of the people one associates with as by any other factor, it is clear why the party is always where Lisa is.

And whenever we are feeling low, all of us can think of Lisa and Phil and how they came to share a small windfall, and we can feel brighter. That is a gift, and so we are honored to bestow our first Perishable Pundit “You’ve Restored Our Faith In Humanity” Award to Lisa McNeece, Vice President of Foodservice and Industrial Sales at Grimmway Farms.

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