(From NAMI Headquarters, Washington, DC) There's a new gunslinger in town, the muscular spawn generated by mating the North American Meat Association (NAMA) with the American Meat Institute (AMI). NAMA, of course, is the two year old progeny of the National Meat Association (NMA) and the North American Meat Processors Association (NAMP). This new super group, born on 1/1/15, was named the North American Meat Institute (NAMI).
NAMI held its first Board of Directors meeting at the International Production and Processing Expo (IPPE) in late January during which it announced its first slate of new officers, an interesting mix of meat industry heavyweights who guide big packers and speedy welterweights who lead small- to medium-sized packers in the U.S. and Canada. Dave McDonald, president and COO of OSI Group, will serve as the first chairman. Brian Coelho, president of Central Valley Meat, will serve as vice chairman. The treasurer is Mike Townsley, president and interim CEO of Bob Evans Farms. Cardinal Meat Specialists Vice President of Operations John Vatri is the secretary. Immediate past Chairmen are American Foods Group President and COO Greg Benedict, Beef Products, Inc. Director of Sales Mike Hesse and Gahn Meat Company President Tony Gahn, Jr.
There will be no other trade association serving any part of the food business with as much potential clout as NAMI. Fortunately, the chief exec is Barry Carpenter, a prudent industry professional who knows not to overplay his hand. He can be relied on to set people down, regardless of their potentially adversarial position, and say, "Let's reason together." And more often than not, he will help them reach a mutually beneficial agreement.
Of course, having an organization as large and important to the North American economy as the meat industry behind Mr. Carpenter gives him a certain status when he climbs the Hill. The USDA and FDA offices will certainly practice an open door policy when he asks to confer with them on important issues. Members of the House and Senate will probably be eager to listen to what he has to say.
Full disclosure: I've been associated with NMA, NAMP, and AMI for over 30 years and with NAMA since its inception. It might give my questions a certain slant but it also helps me phrase them to get at the heart of member concerns. Recently, I spent an hour with Mr. Carpenter in his office discussing the ‘State of the Union" between NAMA and AMI. Because of the length of this interview, it will be split into two parts. This week, we discuss member concerns and what's happening with a long list of conferences and conventions. Next week, we'll look at who's in charge, hear what he says about COOL and where he wants to take this new organization.
ABOUT MEMBER CONCERNS
Q. In December, you sent out your first membership renewals, the first real test of member retention for the new organization. How have they responded?
A. It's looking good. We've had one company, one general member, who dropped out because they went out of business. We can't do much about that. We've added about six new members so far this year so things are looking good. The best part is we haven't gotten any negative feedback from members concerned about losing support or services they have come to expect. So I feel pretty comfortable about member retention and future growth in membership.
Q. I've seen several other organizations that merged, and they had a net loss of members.
A. Right. We had that experience with our prior merger. All the hard information and direct feedback pointed to a dues increase as the major reason members dropped. That was unfortunate, but is not an issue here. The vast majority of the membership had a dues decrease, some of them as much as $2,000-$3,000. In fact, we reduced the dues for more than 95% of the NAMA members and they stayed constant for the AMI members.
Dues are something we'll manage. We'll look at the operational costs and inflation, they change over time. But we picked the starting point that we thought was comfortable to run the organization and would balance out what we need to meet our financial requirements.
We're going to continue to have costs of doing business like any company. We know that anybody who's struggling in their business is going to look at the cost of membership. Membership in trade associations will go before losing the business. That's just the way it is, and we understand that.
We like to believe that if they're taking advantage of our services we're going to sustain them much longer because we are supporting their needs. We need the support of all of our members in order to keep our organization running. We feel good about where we are and will feel better after a year and see how things go.
We are looking at other ways to try to grow membership and maybe different models on dues. But that's all in the developmental stage. We'll look at it over the first year and see where things stand.
Q. How about negative member reaction and loss, a common thing when two associations merge?
A. The first reaction is usually that's just going to be your smaller members, and that's not the case. Some of our large members have that same kind of feeling. They ask questions like, "Are we really going in the right direction? Are my resources being well-used? Would I be better off putting my funds in some other type of process?" We are focused on the needs of all members, recognizing their needs may vary.
For example, some of our member companies have Washington, DC representatives. If all these companies cared about was what's going on with the regulatory and legislative issues they may not see the full value of being a member.
Fortunately, our members realize the value of the full scope of our programs. So far from the many member company representatives that I've heard from, they've taken a new focus and said we're going to make sure this works. They all really believe that having a bigger footprint through more members is going to help in the Congressional process.
There's no magic bullet with Congressional issues because there's always a multitude of competing issues. But the more congressional districts you have members in, the better opportunity you have for access to key members that can support your position. So retaining membership is a big target.
We're doing some analysis right now to decide the best way to expand our footprint and that could be through alliances with other associations. As you know, we already have an alliance with Eastern Meat Packers Association and the Chicago Midwest Meat Association. There are others out there that we've worked with but we don't really have that kind of close working relationship - we're looking to possibly expand that.
Q. One of the questions somebody asked at the Beef Safety Conference was "Can you tell me that the interests of North Country Smokehouse and JBS are the same? Can this new organization serve both of them equally?"
A. I can tell you what those members say, especially the two you just mentioned. They're good examples of the size extremes. First of all, we don't attempt to deal with competitive issues, marketplace issues, that's just not something trade associations deal with. But the things we do deal with image, trade, regulations, legislation, those types of issues I don't know a single time when we found ourselves in a situation where we couldn't go champion the position that everyone supported.
You could use an example like how should we label product that's cured with vegetable protein instead of nitrates - this whole idea of uncured labeling. Well there's a concern there that needs to be addressed; What is the best message to the consumer to clearly communicate the safety and best use of these products?
It's better to make sure that the message is going out to the consuming public that is clear and that the government's food safety authorities are comfortable that a product is being labeled properly. The past perceived difference between large and small plants, even back in the early days of E. Coli testing, were caused by misinformation about who was doing what in that process, it caused some groups to take a position contrary to others. From my observation, it was all based on a lack of understanding of the whole meat safety system. By having the smallest plant stand with the biggest plant or one extreme of the chain of production to the other, you have an opportunity to get everybody to understand the whole picture, and you avoid those kind of situations.
I think the key is making sure everybody understands the issues. If they understand an issue and where the regulators are trying to go with it, then I think you can get people to come to a common denominator and you can move forward. If you can't get that consensus, then you can't deal with it.
I don't think that there's much on the horizon that will fall in that category as long as you stay out of the competitive issues. That's taboo, we don't go there. In fact both prior organizations had policies that issues like food safety were noncompetitive issues. We'll reaffirm those policies and reassure everyone that those are not issues. If that's the mindset, it helps people to talk more freely in a discussion of the best way to deal with certain issues.
Now we don't expect anybody to give up trade secrets on anything that affects their product. But when it comes to food safety, I think everybody is in the same boat. They're asking "What's the best way to do this," because collectively we all need to do it.
If a retailer is buying beef trim to grind or buying coarse ground beef from two different places, they don't want a problem with either one of those sources. It's just a train wreck, so the more that everybody can do to make it a safer product, the better it is for everyone.
Q. When I did a research project on membership for NAMP 8 years ago, I found that somewhere around 80 to 85% of meat processors are not members of any meat industry trade organization. There's that huge potential market out there. How do you approach them?
A. Our membership team has been charged to come up with some ideas in that area. You have to show value and value is different for everybody out there. Some people feel like you need to belong to be a team, be part of the industry. Others think that's somebody else's job. A lot of it's just the human nature thing. If you look around, at the number of people who are active participants in groups, we aren't that much different than other organizations in other industries. I think it's just some people's nature of belonging to and being part of things or not.
We have to add value to attract those companies. Along that line, the insurance program we're working on may just be the value component for a lot of our current and potential new members. Like anything else, economies of scale enable members to get a better rate. We're expecting to see savings in insurance rates for some of our members to be in excess of what our dues would be for that size company. If that's the case, then it's a pretty easy decision for our members. The program is in its infancy, right now, but we've got companies signing up already. We probably won't have a real good picture of where it's going until summer when more of current plans renew.
The companies that have enrolled so far are really pleased. So if that's any indication of others, I think it's a model that works. It may be that drawing card we need to get people in to see what we can do for them in the bigger scheme of things. We have to add value out there to attract those companies that are not engaged.
ABOUT CONFERENCES AND CONVENTIONS
Q.NAMA and AMI each hosted a long list of industry events. In your planning process, I'm sure you've looked at all of them and asked which are still viable and which are not. What events are solid at this point?
A. All our education events are solid because there's not much overlap. For example, AMI owned animal welfare and Listeria, NAMA owned beef safety and Center of the Plate® training. Center of the Plate has worked well. So our big outreach educational programs were not competing with each other. We don't see any reason why those won't get better just because there will be a bigger audience to pull from. Of course, like anything else, our events may evolve as we go forward.
Q. NAMP started NAMA's Beef Safety Conference seven years ago as an E. coli conference and then it expanded into something larger. Would AMI's Listeria Conference remain as a standalone event or, at some future time, be blended into the Beef Safety Conference?
A. Listeria is such a unique situation; the issues are primarily associated with ready-to-eat products. I don't think our focus is going to evolve much because as you know, there are still recalls and illnesses associated with listeria. There's a long ways to go there. I don't see that conference changing from its focus; it's been a great success story. But it's also an issue where you can't claim victory and walk away. It's still out there.
The Beef Safety Conference started with a focus on E. coli, O157, not that we're claiming victory there, either, but the scope, has broadened by the inclusion of the additional STEC's as adulterants. Also salmonella has become a major concern for similar kinds of product and to some extent has similar kinds of ways you can deal with it. It was easier to evolve the focus of our beef safety training from E. coli to that broader micro group. It will evolve, and the Listeria Conference may evolve someday, but I don't see it in the near future just because it is such a unique area.
The technology component of ready-to-eat products is getting better but there's still concern. There are still a lot of processors that don't have the resources to use high pressure or a number of other technologies out there that can help. They need the process controls to be really effective in their systems so we'll definitely continue with that one.
Q. There was a move three or four years ago to have more Center of the Plate® Training programs and that was rolled back to the original Texas A&;M site. Will there be more of them in the future?
A. That was an experiment that didn't work. We saturated the market. I think it's solid to have a good program once a year. We've done a couple of specialty programs for special requests. For example, we did one for the Department of Defense where they wanted something unique to their world. We'll continue to look at doing those, but as far as the primary Center of the Plate, one is where we're at for now.
We'll do one really good one every year, get a good crowd. If we need to up the charges some to make sure our costs are covered, we can do that.
Q. What about new programs? It seems larger membership base might give you an opportunity to try new projects.
A. Overall, regarding education and outreach programs, we're looking for ways to up our involvement through things like increasing the number of webinars. Not so much in the product area, but addressing operational issues, like OSHA, the environment, employee relations, those kinds of thing. We want to do more informational webinars, too. They usually get better participation. We can do them quicker than onsite events and get top experts engaged at a better value to our members. It's just a better deal.
And then we've got a real focus on getting more of the members involved who don't have their own internal resources; the ones who can't afford to have their own HR guy or their own Ph.D. in meat science on staff - really focus on reaching out to them in a variety of ways, either by ourselves or through collaborative efforts with other associations.
The biggest universe, though, are the companies that aren't in anybody's association, they're just out there, they need help. We're not necessarily looking for them to be members. It's great if they want to be members, but we want to provide information to them, anyway. One of the philosophies of our membership is that we need everybody to do better because we don't want to keep seeing recalls and other negative press about the meat industry. They hurt all of us.
So it's nice if they're members and support the whole cause but let's have opportunities for non-members to understand what's going on and get better at what they do with information that we can readily make available to them. I think that's the right philosophy, and that's where our leadership wants to go.