March, 1996

Fruits of Thought

How United Can Prevail

With all the pageantry of the United Convention, in all the claims and counter-claims of how well or poorly the association is doing or not doing, in all the analysis of representation and profitability, one statement rings true: The United Fresh Fruit and Vegetable Association has become irrelevant to retail chain stores.

OK, I said it. Now let us get past it. Because the truth is, United does not need one single retailer at its convention, on its board of directors, or as a member, to be a vibrant, successful and growing association. United’s main purpose is government relations. This is its raison d’etre. Furthermore, United represents the interests of fruit and vegetable growers. Although it has had strong wholesale and broker membership, United cannot truly represent these segments of the industry in any instance in which their interests conflict with grower interests.

The unwritten story of the New Orleans convention was not the lack of retail support but that a substantial number of terminal market firms simply did not show this year. Although perhaps valued less as customers than the major chain stores, these are significant buyers still, and could justify continued participation in the trade show by many produce vendors.

All in all, one could say that the convention was very sad – empty aisles at the trade show and a general pessimistic feeling about United. The more the association talked, the weaker it sounded. United placed great emphasis on the fact that pre-registration, mostly by out-of-towners, was down just a bit from the previous year. The big loss in attendees was in 2,000 fewer on-site registrations – many from local day passes. Alas, though, such statistics only prove the point: United is heavily dependent on local attendees because it does not have a strong enough trade show to motivate people to travel long distances and expend funds to stay in hotels and attend the function.

Even the earnest protestations by the association that this was the most profitable United show ever, play differently to the listener than United may have intended. Profits, of course, are a function of both revenue and expenses. It was perfectly obvious that United had decided to cut the budget way back. For years, to keep people in the exhibit hall, United did things like have regular drawings giving away substantial prizes. Not this year. Big name speakers like George F. Will or C. Everett Koop and high-profile entertainers like Glenn Campbell or Lee Greenwood have fallen by the wayside. Specialized seminars for international trade and for produce retailers are all gone.

In truth, the high profit of the convention and the decline in attendance are not coincidental; they are directly related to United’s determination to raise money for government relations. The problem with this is that people who pay to attend and exhibit at shows do not necessarily share the association’s commitment, and so these people will only attend or exhibit if they feel the value of the show experience – be it as an exhibitor or an attendee – is a good one.

If United wants to maintain and grow its convention and trade show, it has to stop looking at it as a cow to milk for money to fund government relations and, instead, view it as a business that requires resources to grow and prosper. In fairness, United knows this, but it is driven to desperate straits by a membership that tells United it values government relations, yet, for some reason, has not shown a willingness to write checks for that purpose.

This is obviously a situation that cannot go on forever. One simply cannot profiteer in a business – the trade show – and expect to prosper. Something has got to give.

Yet despite the talk at the convention, I do not think this need be the end of United. In fact, I believe it can come back stronger than ever before.

First, a caveat: I do not think United’s problems can be solved by hoping that other people or associations will save United. A joint show with PMA will not, and should not, happen on the terms that United would like – namely, to combine PMA’s much larger show with United’s much smaller show and split the revenue 50/50. I say it should not happen because it wouldn’t solve the problem, which is the draining of profits from a conference to support government relations.

If United wants to succeed, here is what it has to do:

1) Focus – United can always entertain retailers, foodservice operators, truckers, wholesalers, etc. But it should be clearly defined that the purpose of the United Fresh Fruit & Vegetable Association is to represent growers of fruits and vegetables to government and the public at large.

2) The prime purpose of the association is government relations. The degree to which this function can be executed must depend entirely on the willingness of the industry to explicitly support government relations. This means principally that larger companies must pay higher dues at United.

United, in turn, must explicitly dedicate all dues over a minimal amount necessary for basic upkeep to government relations. It is often said that big companies carry all the water in industry activities. That is really not so. True, really small players under-contribute – this is mostly because of the expense and difficulty of reaching out to tiny players. The big players, however, under-contribute as well. If a big company is not willing to contribute $50,000 or $100,000 a year – a small portion of its produce sales – to United for government relations, then it must not value it very much.

3) The convention should be viewed as an activity primarily designed to benefit attendees – not to fund other activities. Every potential exhibitor should be told that United offers the trade show as a chance for them to do business. If the trade show does not make sense for their business, the association offers a government relations fund to which they can contribute as an alternative way to support the association.

It is self-deceiving for the industry to fund government relations out of marketing budgets and a waste of money for companies who don’t value trade shows to spend tens of thousands of dollars shipping booths, bringing people, etc., just so they can give a few thousand bucks in booth rental fees to the association. United should reinvest virtually all of the profit the show makes in making the following year’s show more information-rich, more entertaining and more valuable for attendees.

It is clear that United is not a retail show but a grower/packer/shipper show. So the focus should be on having exhibitors that can profit by selling to these types of organizations.

There is a problem at United, but also an opportunity. For it is only when problems are severe that most people – and associations – open themselves to change.  pb