WASHINGTON -- Food Marketing Institute here has decided to continue to go it alone.After approximately six months of contemplating whether it should take on a partner to run its annual May trade show and its Marketechnics conference, FMI's board of directors said last week the association was "recommitting itself to being the sole proprietor" of both events."We are excited about the opportunity to
WASHINGTON -- Food Marketing Institute here has decided to continue to go it alone.
After approximately six months of contemplating whether it should take on a partner to run its annual May trade show and its Marketechnics conference, FMI's board of directors said last week the association was "recommitting itself to being the sole proprietor" of both events.
"We are excited about the opportunity to continue to work with our retail and wholesale members, our exhibitors and our co-location partners to maintain these two shows as signature events for the industry," said Tim Hammonds, president and chief executive officer.
FMI representatives declined to indicate to SN what prompted last week's decision. Claudia Peters, vice president, communications and marketing, said, "The May show is the signature event for FMI and is the only annual showcase for the entire industry, and we believe it is best maintained by the industry's leading trade association."
FMI's decision came as a surprise to dmg world media, Larkspur, Calif., which told SN it was the company with which FMI has been in negotiations since early last summer, as previously reported by SN. "We had been hoping to close the deal to acquire two of their trade shows this week," Mia Eng, corporate communications director, dmg, told SN.
The exhibition and publishing firm produces more than 300 trade and consumer shows around the world.
"Obviously, we are very disappointed this acquisition was not completed, as we had invested a great deal of time and money looking at these shows," Eng said. "We were very keen to get involved, so we were very surprised at the outcome."
Peters said FMI "understands why dmg is disappointed, as we too believe in the value of this important show."
What prompted FMI to decide to hold onto the shows on its own may have been "the value proposition," one industry observer told SN. "FMI may have felt it had to give up too much flexibility in terms of its ability to generate revenue at other meetings or conferences throughout the year."
One board member told SN, "FMI felt the return on investment was better if it ran the show on its own."
Another director said, "FMI felt it made more sense for it to continue to work with its membership base and do what it's always done. With a partnership, the partner would be entitled to some of the money.
"But going forward, FMI will have to tighten up because of the shrinking number of retailers and vendors."
SN reported during the summer that representatives of FMI and dmg were meeting with major exhibitors as part of dmg's due diligence before deciding whether to involve itself with FMI, as "dmg wanted to get to know the people who would be its customers before it got involved," an industry observer explained.
The meetings were also meant to reassure exhibitors that a third party would not alter the nature of the show, another observer noted.
Still unresolved is whether FMI may be considering a move to relocate the spring show to a city other than Chicago because of the high cost to suppliers of dealing with the unions there to help them set up their exhibits. One observer suggested FMI might consider moving the show to Las Vegas, while another advocated a move to Orlando, "which has cost advantages because it has facilities that enable exhibitors to simply plug themselves in."
In an interview with SN at last year's Chicago convention, Karen Brown, FMI's senior vice president, said the association was "seeking to add partners to the show, and possibly that could be an equity partner who could help us grow the show."
"Our primary mission isn't running trade shows," she explained.
Sources questioned by SN suggested FMI was considering allowing an outside management firm to run the show because of dwindling attendance and the ongoing struggle to sell exhibit space.
"For suppliers, the decision to exhibit or not is a business proposition that is not as attractive today as it was even 10 years ago," one trade source told SN. "Some manufacturers feel they don't need to exhibit because they don't get much value from it, and with industry consolidation, they don't see enough customers to make it worth the investment."