PMA CONVENTION OVERVIEW

MINA WILLIAMS

ATLANTA (FNS) -- Celebrating 50 years and looking to the new century, the Newark, Del.-based Produce Marketing Association opened its annual convention and trade show here this weekend, with more than 13,000 people, 1,723 booths and 540 companies represented.

"We want to celebrate where we have come from, looking at all the twists and turns," said Bryan Silbermann, PMA president. "But we want to keep our focus on the future with an eye on how we got here."

Originally, the PMA started as an informal group of suppliers who came together to address challenges related to produce packaging. As the association evolved and members found strength in numbers, its focus grew to encompass larger industry issues.

"Buyers and sellers got together to solve problems," said Silbermann. "Now, we have more of a marketing focus, but relationships and partnerships are still our foundation. Where else can you go to develop a consensus? Where else can you go to be able to put yourself in the other guy's shoes?"

The original purpose of the association has not changed over the past 50 years, though it has grown as the industry has developed and matured. Among the changes that PMA will be focusing on in the next century include:

Technology issues. As business becomes more technologically driven, produce executives need a blend of skills to be successful. The association is working on helping its members with on-line commerce, for example.

Education. New initiatives and a new advisory council have been developed at the PMA and a white paper on education is in the process of being written to ensure that all members have access to learning about technology and how to put it to work.

Building consumption. By throwing its weight behind the national Five a Day campaign, the PMA hopes to continue to build consumption. This government-and-private-industry partnership has been a fundamental communication tool with consumers, officials involved with the program have said.

Food safety. Microbial contamination is one issue that the PMA continues to address through a multifocused approach incorporating best practices into production and processing, distribution, retail stores and the home.

This year's convention and trade show present concepts and showcase products aimed at keeping attendees on the cutting edge of the produce business as the new century begins. One such tool is the unveiling of FreshTrack '99, a research report conducted with Cornell University. Now in its third year, the benchmarking study focuses this time around on buying practices in the wake of retail mergers and acquisitions.

"This has been the year of consolidation and a difficult year for grower/shippers," said Silbermann. "Retailers have to be sensitive to the natural supply cycles in the business. This year, but for citrus, we have seen over-abundance of produce widespread across commodities. Summer brought us depressed prices.

"Layer on top of that consolidation, and the impact of the 'big getting bigger' has significant implications," he added.

"Everybody is nervous and they are looking to the retail side to move product," said Silbermann. "This is a cyclical business -- there are good years and bad years. Where true relationships are built the impacts are not as catastrophic. But over the past 18 months the shoe has definitely been on the retail foot."

The one result of this year's high yields has been sagging prices, which may cause shippers to diversify as they fight off business pressures, said Silbermann, who noted that the effort is very difficult when inventory is getting "socked" from all sides.

"You can't just talk about partnerships anymore or vendor-managed inventory," he said. "If we don't have an industry where buyers are sensitive to the production side of the business, we will all lose out, buyer and seller alike."

Another issue under examination at this year's convention is the movement toward on-line buying. Though produce is an industry built on personal relationships between grower/shipper and buyer, Silbermann said, the method of communication is becoming more sophisticated through technology.

"We are beginning to see a very strong presence of on-line buying services," said Silbermann. "Nobody knows where it is going and there is not yet a significant amount of product being moved on-line. However, there are a good number of transactions being concluded on-line."

This way of monitoring and controlling inventory does have tangible advantages, such as the elimination of paperwork and a more reliable flow of information from one computer to another. Silbermann pointed out that the Cornell study being presented will examine on-line transactions and their potential growth over the next five years.

"Most retailers have information-technology departments that are currently spending a good deal of time on Y2K work and upgrading their systems," he said. One benefit of this activity is that once the millennium crisis is passed, the supermarket industry's networks will all be capable of using these technologically advanced methods of communicating with one another.

Consolidation has created a fewer number of players, but the business is no less complicated because of it, Silbermann said. The creation of these large companies has not changed the way they operate to any great degree.

"Produce-procurement practices vary from operator to operator," he said. "There are centralized retailers and divisional retailers. Some retailers have decided that centralized is not the way to go as there are no centralized customers."

Global competition has been another pressure point within the marketplace, since it pinches the supply of produce items. The association's International Trade Conference is held just prior to the start of the regular program, and has attracted more than 60 countries, who are sending both buyers and suppliers, said Silbermann.

"We have a large contingent from around the world. This has become a global meeting place," he said. "Those with the technology, capital and management teams will succeed whether they are in the Far East, South America, Europe or South Africa."

The PMA's FreshTech is new this year, a one-day technology conference that focuses on the communication and information technologies that are affecting the industry.

"It is hoped that this will attract people who would not come to the convention," said Silbermann. "Then these technology and operation folds would stay over for the show. Indeed the convention has attracted technology-oriented exhibitors. We wanted to respond to our members and conduct more events in one place." According to Silbermann, interest in this combination has been strong and keeping pace with room availability has been a chief concern.

The PMA's virtual trade show on the Internet has also been beefed up over the past few months.