September, 2010

Fruits of Thought

The End Of Homogenization

This year, at the upcoming Produce Marketing Association Convention, we begin the celebration of the 25th anniversary of Produce Business magazine.

As part of that process, we've been surveying the industry as to what events and trends most shaped the last quarter-century and what is likely to shape the next.

Chris Nelson, the President and CEO of the MIXTEC Group, was the first to suggest to us that consolidation was one of the key trends of the last 25 years. There is certainly no denying that he is correct.

Whether it was the organic growth of Wal-Mart rolling Supercenters across the country, or chains such as Safeway and Kroger doing a roll-up on regional chains, consolidation has been a defining characteristic of the age.

More intriguing, though, is what this means for the next 25 years. One of the most dangerous things to do in business is to extrapolate. The obvious facts are that consolidation brings efficiency, and efficiency brings lower cost; and lower cost allows for lower prices, which leads to larger market share, which causes the system to become further consolidated. It is a cycle that never ends.

Unless, of course, it does end.

Herbert Stein was an economist, the head of the Council of Economic Advisors under Presidents Nixon and Ford (he also is father of Ben Stein of Ferris Bueller fame), and he was famous for saying: “If something cannot go on forever, then it will stop.”

Perhaps an example of this is found in the whole “locavore” movement, which is less about all the specific reasons given for the phenomenon ­— carbon footprints, food miles and what not — than it is about a society saying, en masse “Stop.” A society saying that we want an end to the homogenization of the modern world.

The challenge is to see beyond the immediate reaction to identify how reality will shape itself in the years to come. The drive for efficiency drives consolidation and the world needs efficiency. Yearnings for rootedness, a connection to the land and admiration for the artisan drives the demand for small scale and local, and the world needs to help fill the souls of people.

The zeitgeist of the age will always rule, and the zeitgeist ahead of us is profoundly conservative. In our politics, it is assumed that conservatism and capitalism go together, for that is the coalition that the Republicans have formed. In fact, though, capitalism is profoundly hostile to conservatism. It creates giant waves of change, disrupting settled interests and the manners and mores of society.

The zeitgeist is best seen as a reaction to the consolidation. If you were to blindfold people and take them to any one of a hundred giant shopping malls, few could tell what city they are in. The same can be said about airports or convention centers. Even the supposedly responsive architecture exhibited in the new generation of baseball stadiums is all the same.

When society transitioned from an artisan and small farmer society to a manufacturing society, the objection was that human beings would lose their autonomy. The future of democracy was, itself, held in question. After all, a small farmer who had to think in order to effectively plant, tend, harvest and market his crop was capable of exercising independent judgment, and thus, of effectively voting. But a man whose whole day was spent on an assembly line would have no chance to practice independent judgment, so such skills would atrophy and he would not be fit to vote. This is what the famous Charlie Chaplin film Modern Times was all about.

Now, as we transition to the knowledge-based economy where only a fraction of the people are on those assembly lines, the threat may be to consolidated capitalism. If once the question was how can people not accustomed to exercising judgment vote with judgment, now the issue may be how can people super-stimulated from birth — with over-parenting, over-schooling, on to employment that must always be stimulating — how could these people be asked to eat undifferentiated food and shop in undifferentiated venues?

They cannot and they will not. But neither can they give up the economies of scale that consolidation brings. Herman Kahn, the great futurist, was famous for explaining that the reason it is hard to predict the future is that if we knew how we would do things in the future, we would do them that way now.

The best bet is that many of the most interesting and important insights will not in the future come on a national or international scale; that to garner many crucial insights you need to get local, you need to get close to the market.

After a quarter-century of surveying the scene both locally and nationally, it became clear that insight could be gained by getting close, close to many who never get to go to PMA or Fruit Logistica. This led those of us here at Produce Business to seek out a regional trade group, the Eastern Produce Council and favor the establishment of The New York Produce Show and Conference.

In this region, in this city — a place filled with people, buying power and creative energy — the conference will create a node of connection and feedback between local ideas and national and international executors of ideas. The future will be built on the interchange of such people and ideas. I hope you’ll consider being part of the future by joining us in New York. You can learn more at NYProduceShow.com   pb