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PMA-United’s big merger opportunity

The long anticipated merger between the United Fresh Produce Association BB #:145458 and Produce Marketing Association BB #:153708 hit on the last day of Q1 2021.

This has been a talking point every decade for the last 50 years, and it will become a reality on Jan. 1, 2022.

There are many questions, some we know now, some we can guess and some we don’t have any idea.

We can look at a few of them.

Why now?
The official March 31 joint statement doesn’t say, but the Frequently Asked Questions does acknowledge that the pandemic has had an effect on the merger timeline, saying, “coming together now is not driven by financial concerns, but by a true desire to maintain and build member value in the future.”

The second part of this is no doubt true, but the first half is not the whole truth, to be charitable.

Of course financial concerns sped this process up. Both associations missed out on the revenue associated with in-person events in 2020, and we don’t know what 2021 will bring, but likely less than 2019. Duplicate costs have always been a driver of the member push to merge.

It’s no secret that a merger last decade was complicated by two association CEOs who each felt he should be the one to lead a combined association forward. This time, it’s not the case.

If United Fresh CEO Tom Stenzel fulfills the proposed co-CEO role through the end of 2022, that will give him 30 years in charge, and we presume, the right time to step away.

Is this a good thing?
Everyone will have their own perspective, but for most industry members and companies, this is certainly a good thing.

Waste is bad, and there is waste any time we pay two for the job of one. While each group has focused more on what they do best the last decade, the produce industry as a whole should be represented by one voice on big picture issues.

It’s also a time to re-evaluate events. We just had a year without them. How many do we need? What’s their purpose? Do they return value to members?

Are there concerns?
Of course. Any time two groups try to merge people, skills and cultures, there will be pain. Many in the industry have gone through this in their own businesses.

United Fresh has made its niche representing the grower-shipper side of the industry and making the industry case in Washington, D.C., which is a necessary expense of time and money.

PMA has tended to take a broader view of the industry, representing the needs of buyers as well as international companies.
The makeup of the first post-merger board of directors will be contentious.

A merged association can be many things, but it can’t be everything. It will have to choose in disagreements between buyers and sellers, domestic producers vs. importers, for example.

What should happen now?
Both PMA and United Fresh have long and well-respected histories. But this merged association will be a new one with a new name, as they say they will announce at the end of the year.

It would take a lot of courage to use this opportunity to create a new organization — as if from scratch — to meet the needs of this industry, which has seen a decade worth of change in the last 15 months.

This association should represent what the industry is going to be.

The harder the work now, the stronger the association will be in the future.

The long anticipated merger between the United Fresh Produce Association BB #:145458 and Produce Marketing Association BB #:153708 hit on the last day of Q1 2021.

This has been a talking point every decade for the last 50 years, and it will become a reality on Jan. 1, 2022.

There are many questions, some we know now, some we can guess and some we don’t have any idea.

We can look at a few of them.

Why now?
The official March 31 joint statement doesn’t say, but the Frequently Asked Questions does acknowledge that the pandemic has had an effect on the merger timeline, saying, “coming together now is not driven by financial concerns, but by a true desire to maintain and build member value in the future.”

The second part of this is no doubt true, but the first half is not the whole truth, to be charitable.

Of course financial concerns sped this process up. Both associations missed out on the revenue associated with in-person events in 2020, and we don’t know what 2021 will bring, but likely less than 2019. Duplicate costs have always been a driver of the member push to merge.

It’s no secret that a merger last decade was complicated by two association CEOs who each felt he should be the one to lead a combined association forward. This time, it’s not the case.

If United Fresh CEO Tom Stenzel fulfills the proposed co-CEO role through the end of 2022, that will give him 30 years in charge, and we presume, the right time to step away.

Is this a good thing?
Everyone will have their own perspective, but for most industry members and companies, this is certainly a good thing.

Waste is bad, and there is waste any time we pay two for the job of one. While each group has focused more on what they do best the last decade, the produce industry as a whole should be represented by one voice on big picture issues.

It’s also a time to re-evaluate events. We just had a year without them. How many do we need? What’s their purpose? Do they return value to members?

Are there concerns?
Of course. Any time two groups try to merge people, skills and cultures, there will be pain. Many in the industry have gone through this in their own businesses.

United Fresh has made its niche representing the grower-shipper side of the industry and making the industry case in Washington, D.C., which is a necessary expense of time and money.

PMA has tended to take a broader view of the industry, representing the needs of buyers as well as international companies.
The makeup of the first post-merger board of directors will be contentious.

A merged association can be many things, but it can’t be everything. It will have to choose in disagreements between buyers and sellers, domestic producers vs. importers, for example.

What should happen now?
Both PMA and United Fresh have long and well-respected histories. But this merged association will be a new one with a new name, as they say they will announce at the end of the year.

It would take a lot of courage to use this opportunity to create a new organization — as if from scratch — to meet the needs of this industry, which has seen a decade worth of change in the last 15 months.

This association should represent what the industry is going to be.

The harder the work now, the stronger the association will be in the future.

Greg Johnson is Director of Media Development for Blue Book Services