August, 1989

Fruits of Thought

United We Stand

Like a breath of fresh air sweeping a house clean, Richard Jahnke, chairman of the United Fresh Fruit and Vegetable Association has set the stage for a renaissance at United, and in doing so he has earned the loyalty of the staff of United and the industry at large.

United has been an organization with problems for some years. There was a time when the organization was so dominant that produce people found its annual convention a “must attend.” In recent years, many have found the PMA conventions to contain more life and action. Several large exhibitors, the type of people who provide the financial underpinnings for the trade shows, have commented to me that they really are not sure that their investment at the United convention is worth it. The basic complaint has been that the convention attracts too few retailers and food service buyers, that the convention is stuffy and old-fashioned and that the association is simply not doing the exciting things that PMA has been doing.

Dissatisfaction with an annual convention is devastating to an association such as United. In the first place, these conventions are businesses – and very profitable ones at that. It is generally the case that the profit on the convention exceeds the entire net income of the association. Meaning they lose money on everything else and make it up on the convention. Secondly, a lukewarm reputation for your convention hurts, because to many members, the convention is the association. Few people are aware of the intricacies of what an association does, and the convention may be the only tangible evidence for some produce people of what their association is doing.

To some extent, a decline of some degree was probably inevitable once PMA was established. In 1937, when the old Western Fruit Jobbers Association merged with the old American Fruit and Vegetable Shippers Association to form the United Fresh Fruit and Vegetable Association, United became the preeminent industry association. In 1952, United absorbed the National League of Commission Merchants of the United States, giving it a virtual monopoly. Like most monopolies, it became set in its ways, failed to keep up with the times, and thus opened the door for the development of today’s PMA.

But today United has a new opportunity. And you can count this writer among those hoping United will make the most of it. Roger Stroh, who had been president, is now gone, and an atmosphere of change is in the air. Mr. Stroh served at United for 16 years, and a certain respect must be paid to anyone who devotes that much of his life to industry affairs. Nonetheless, Roger Stroh did not seem to be the right man for United at this time. People who manage the conventions for really large companies in the trade have told of the many occasions when they got the distinct impression that Mr. Stroh thought their concerns were beneath his level.

So today, as the search for a new president proceeds, United has an opportunity to put in a more appropriate personality, someone who will respect staff and industry alike and will work with them to restore the association’s preeminence. But personality, though important, has been only part of United’s problem. Another part is that PMA has become the interesting association on the money-making side. When United was having potato and onion divisions or tomato divisions, PMA was tapping into the marketing trends of the industry by talking about exciting things like foodservice. PMA came to be the interesting association, and the PMA convention has come to be the convention where people feel they can better make contacts and get tips on merchandising and marketing. In other words, PMA has become the place people think they can make money. This is a powerful appeal.

But if the industry abandons United, it will be at great cost. For though PMA has all the exciting money-making merchandising and marketing programs, it has little or none of the capabilities to do the kind of work that United does in representing the industry in Washington. Governmental relations, The Fresh Approach, scientific and technical information – all these are most exclusively United functions. And, it deserves to be noted that these are all the non-profitable, non-glamorous activities that the industry needs to have done.

Of course the industry needs to be educated on what United does if it is going to support it, and United’s public relations efforts have to be increased. In other industries, there are associations that get loads of money in large part to represent the respective interests in Washington. If United went out and explained to people what it does and why it is important, there is no reason to believe the produce industry will not respond.

Some in the industry have urged a merger of United and PMA. Combine UNIPAC, The Fresh Approach, and all of United’s resources in governmental affairs with PMA and its merchandising and marketing programs. This would avoid duplication and save some money. But this would also lead to a monopoly and the question is whether that will best serve the interests of the trade.

The story of American capitalism is that competition produces the best service. This is no less true in associations than it is on the terminal market. United is going through a wrenching period of reform and inner turmoil, but it was moved to improve itself by the challenge PMA posed to United’s prosperity. It is this type of creative competition which ensures constant improvement and which will create better and more competitive associations in the future.  pb