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Town hall meeting weighs pros and cons of mandatory promotion board

by Rand Green | July 29, 2009
MONTEREY, CA -- Should a national fruit and vegetable board be formed, funded by mandatory assessments on producers, to encourage Americans to increase their consumption of fruits and vegetables?

If so, who should pay the assessments? How much should the assessments be? How much funding would it really take to move the needle? What are the prospects of obtaining matching funds from government grants? Should the primary objective of such a board be to improve public health or to improve the profitability of the industry?

Those are a few of the questions that were discussed Saturday, July 25, at a town hall meeting during the Produce Marketing Association's Foodservice Conference & Exposition, here.

Speaking at the town hall meeting were Mark Munger, vice president of marketing for Andrew & Williamson Fresh Produce in San Diego and immediate past chairman of the Produce for Better Health Foundation, and Lorri Koster, co-chairnan of Mann Packing Co. Inc., who also chairs the Grower Shipper Association of Central California in Salinas, CA.

The Produce for Better health Foundation, in discussions with the U.S. Department of Agriculture, came up with the idea of exploring the possibility of a mandatory program as a means of increasing available funds to promote fruit and vegetable consumption, according to Mr. Munger.

For the past 10 years, the foundation has had an annual budget of around $5.5 million to $8 million, and it is "very challenging to launch a national health initiative campaign" with such a small budget, although "for what we have to work with, the foundation gets an amazing bang for the buck," Mr. Munger said.

Competition is fierce, with several fast-food, snack-food and soft-drink companies having advertising budgets in excess of a billion dollars. "A lot of companies spend a tremendous amount," Mr. Munger said. But by looking at models of other successful promotion board and branded programs, "we felt $30 million was the minimum" amount needed to & change behavior." Certainly $100 million would be better, and "$200 million would be even better than that," he said. "It is really a balance of trying to do something that is not going to be a hardship on the industry and yet raise enough critical mass to be effective."

Ms. Koster praised the efforts of the foundation and was supportive of the idea of increasing promotions, but she had some tough questions to ask about the advisability of a promotion board in the form proposed and also the timing of the proposal.

"At the end of the day, I want to sell more produce, and & for growers and shippers, there needs to be some return on the investment that you make," she said.

The proposed model for the promotional board would be to assess first handlers, not growers or others in the supply chain. However, "I think just because we are easy to see and we are easy to find and we are easy to measure doesn't mean that we should be the ones to fund the effort," she said.

Furthermore, it is "an effort that we don't feel will raise enough funds to make an impact," and there is no promise that any matching funds from the government would be forthcoming.

As to the $30 million such a program would hope to raise from the industry, "It's like you just came up with a number you thought the industry could manage," she said.

Mann Packing operates in Monterey County, which is "probably the most expensive place to farm in the world," Ms. Koster said. With the added burden of the new Produce Traceability Initiative and many other "real, pragmatic, huge issues we have to tackle day in and day out, & to think that our margins could take any of this [added expense of a promotional board assessment] at this stage of the game is, I felt, very out of touch in the real world that we are operating in. I think it is a luxury we can't afford right now."

Ms. Koster conceded that "we need to do something." But "I'm not sure this is the model," and the timing of the proposal "just really sort of took everyone's breath away," she said.

Mr. Munger acknowledged that there were many questions that needed to be answered. "But we felt we might as well start the discussion while trying to find out some of the answers."