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National promotion concept gets aired at United

by Tim Linden | April 29, 2009
LAS VEGAS -- The national fruit and vegetable promotion concept being advanced by the Produce for Better Health Foundation was the subject of two add-on workshop sessions at the recently concluded United Fresh Produce Association convention, here.

Foundation President Elizabeth Pivonka, who has been traveling around the country giving a presentation about the proposed program to numerous individuals, associations, media and allied industry groups, ran through the concept for convention attendees before opening the floor to comments. She and foundation Chairman Paul Klutes of C.H. Robinson Worldwide fielded the questions, and separately talked to The Produce News a week later about the feedback they received during the convention.

Ms. Pivonka has been keeping an unofficial assessment of where the industry stands now that she has presented the ideas to hundreds of people and companies individually and in groups.

"Going into the PBH board meeting in early April, I said the people I talked to [collectively] scored the idea at about a six on a scale of one to 10, with one being not at all interested and 10 being wildly enthusiastic," she said. "After United, I'd say we are just slightly below six."

But she added that many industry leaders have expressed full support of the concept but tended to be more reserved on how it could be developed fairly and equitably.

In a nutshell, the promotion concept, which is still in its early developmental stage, would assess all first-handlers of fruits and vegetables at the rate of about one-half of one-tenth of 1 percent (0.00046 percent) of total sales, which would raise about $30 million. For it to be implemented, it needs to be officially proposed and to go through a U.S. Department of Agriculture vetting process, which will include a national referendum by first handlers.

Mr. Klutes told The Produce News that $30 million was enough to carry on a credible national promotion program and produce results. "There are plenty of national brands that carry on robust advertising campaigns, including national electronic media, on a $30 million budget or less," he said. "You could argue that these brands already have brand equity that they are trading on, but so do we."

He said that PBH has created awareness over the past 20 years -- first to its 5 A Day campaign and now to the More Matters effort.

At the United convention, those representing the producer sector seemed to be the most negative, as they expect that whatever assessment is levied will eventually fall on the shoulders of growers.

At the first United session Wednesday, April 22, this concept was articulated by numerous grower representatives, including Mike Stuart, president of the Florida Fruit & Vegetable Association in Maitland, FL.

Mr. Stuart said that while the assessment is being levied on the first-handler, these assessments typically fall back to the producer. He added that taking $30 million out of the growers' pockets in these difficult economic times is going to be a tough sell.

Although the assessment is to be levied on first-handlers, others argued that the program should not be put forward without producer support.

Mr. Klutes, who made it clear that he is a supporter of the concept as PBH chairman but does not speak for C.H. Robinson, told The Produce News that the idea would be fully vetted by the industry before it is proposed to USDA. He said that the PBH executive committee would have to decide whether to advance the money to hold the USDA hearings and the subsequent referendum. While PBH could recoup those funds from the program if it passes, the foundation would be out that money if it fails.

"We will want a demonstration of industry support before we put the money up," said Mr. Klutes. "And that would be more than just a narrow majority. We would want significant support."

Ms. Pivonka said that while PBH originally advanced the concept from a neutral position, she and the board clearly believe it has merit and is needed if an equitable way can be found to fund and run the program. She said that at this point, PBH is interested in creating a program that can garner the necessary support to move it forward. And the PBH executive said that this opinion appears to represent the majority of the people she has spoken to.

Mr. Klutes agreed, saying that virtually everyone agrees that advertising works and that the produce industry could benefit by a national program. The key is developing a program that can work for everyone.

Ms. Pivonka presented the idea to the California League of Food Processors after the United Fresh convention, and she said that the general response was "the idea is a good one and it is necessary, but it may be difficult to round up enough support."

She is scheduled to make similar presentations over the next several months and expects there to be another session devoted to the idea at the Produce Marketing Association's Fresh Summit this October in Anaheim, CA. Ms. Pivonka said that the foundation is considering hiring a third party to conduct a couple of surveys of first-handlers over the next several months to anonymously gauge their input. In late October, the PBH executive committee is scheduled to determine if sufficient support exists to formally propose the concept to the USDA.

Mr. Klutes said that before the idea can be implemented, industry members would have ample opportunity to express their views and to vote the concept up or down.

"Our industry tends to make decisions in phases," he said. "To most people, this is a very new idea, and they are currently collecting information so that they can make a rational decision. Right now we are conducting a serious debate about whether it makes sense and how it can be implemented in this case."