FMI WEIGHS SELLING STAKE IN ITS ANNUAL CONFERENCE

SN Staff / Reporting: David Merrefield, Christina Veiders and Mark Hamstra

WASHINGTON -- Faced with dwindling attendance figures and a never-ending struggle to sell exhibit space, Food Marketing Institute here said it would consider partnering with an outside investor to run its annual trade conference in Chicago.

"We are seeking to add partners to the show, and possibly that could be an equity partner who could help us grow the show," said Karen Brown, senior vice president, FMI, in an interview with SN last week after the 2005 version of the conference had concluded. (See show coverage beginning on Page 6.)

Asked how an equity partner could contribute to the show's growth, Brown said such a partner might be able to add capital resources FMI lacks and identify new ways to develop the show. "FMI has a great deal to do, and our primary mission isn't running trade shows," she asserted.

Brown said no decision about a specific show partner, or anything akin to that, has been made.

Several trade sources at the show, none of whom wished to be identified, told SN they were aware FMI was either seeking an investor to buy the show, or was seeking an outside management firm to run it for them. One said a relocation of the show to Las Vegas has also been considered.

Judith Keel, executive vice president of the International Association of Association Management Companies, Westmont, Ill., said a growing number of trade groups have turned to outsourcing for all or part of their operations.

"There are some nice benefits from going to an outside management company," she said. "They can help control your costs because you are tapping into a company that has a lot of experience at doing this."

The IAAMC estimated that about 500 companies in the United States provide outsourced management for trade associations -- not including those management firms that only handle event management and those with just a single client.

Christ Vest, a spokesman for the American Society of Association Executives, Washington, said that although many associations have turned to outside management firms to run their conferences, he has not seen many associations sell their shows outright to trade publishers, as some speculated FMI might choose to do.

"For most associations, shows and meetings are huge revenue raisers, and associations are dependent on that," he said.

Some observers said it would make sense for FMI to find a partner to help produce the show, which could still allow the association to generate revenue from it while reducing its costs.

Roy White, vice president, GMDC Educational Foundation, New York, said outsourcing the show "could be a good thing for FMI. Every trade show needs to reinvent itself. By bringing in a third party to manage the show, it could mean a fresh perspective, new synergies and revenue. It may be the right thing to do."

The news that FMI was seeking a possible partner came as a surprise to many in the industry, even some who serve on the FMI board of directors.

Joe Azzolina Sr., president, Food Circus Super Markets, Middletown, N.J., said he has attended several board meetings, but had not heard anything about a potential sale of the show.

While observers said they thought the show was profitable, they said it was clear the volume of both attendees and exhibitors was waning.

"There's no question there has been attrition among [exhibitor] companies who are concerned about cutting costs," said one retail industry executive, who asked not to be identified. Vendors will be concerned about a possible outsourcing of the show, the executive said, because they will need to rethink their investment in the venue.

FMI has attempted to give the conference a boost by partnering with other shows. This year, for the second time, the show was combined with those of the Organic Trade Association, the United Fresh Fruit & Vegetable Association and the National Association of the Specialty Food Trade. The U.S. Food Export Product Showcase also continued its partnership with the conference.

"FMI has long sought new partners who could add value for our own core base, the retailers," said Brown of FMI. "This makes it possible for them to attend other shows at the same time they are at the FMI show, and it eliminates the need for retailers to perhaps have to decide which show to attend."