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06.09.06

National Fruit & Vegetable Research & Promotion Board – An Industry Dialog. 06.09.06. Why Now?. GAO Report: Generic Promotion Program for Fruits & Vegetables, 1991 Commodity Promotion, Research, and Information Act of 1996

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06.09.06

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  1. National Fruit & Vegetable Research & Promotion Board – An Industry Dialog 06.09.06

  2. Why Now? • GAO Report: Generic Promotion Program for Fruits & Vegetables, 1991 • Commodity Promotion, Research, and Information Act of 1996 • Supreme Court Decision: Johanns v. Livestock Marketing Association, 2005 • Dietary Guidelines, 2005 • Fruits & Veggies—More Matters, 2007 • Current fruit/vegetable consumption • Other food marketing • Farm Bill, 2012, 2017

  3. Industry Promotion Board Effectiveness • The economic evidence is overwhelmingly in favor of generic promotion. Most ranged from 1.4 to 80 in benefit-cost ratios. • Most studies show that producers could have profitably invested more in promotion rather than less. Source: Economics of Commodity Promotion Programs, Kaiser et. al., 2005

  4. Dairy Industry Example 8.2% Difference Fluid Milk Disappearance, billion pounds Source: Measuring the Impacts of Generic Fluid Milk & Dairy Marketing, Kaiser, et. al, 2006

  5. Social Marketing Social marketing is the use of commercial marketing principles to influence human behavior in order to improve health or benefit society.

  6. Social Marketing Effectiveness • http://www.youtube.com/watch?v=4WLEwRdi0QU&NR=1 http://www.youtube.com/watch?v=q1_PhPKzjoA

  7. Western Australia

  8. The Proposal To increase consumption in the United States of all forms of fruits and vegetables through implementation of a comprehensive health marketing, communications, and education effort. A total of $30 million is proposed to be collected from first handlers of fruits and vegetables, including beans. This amount would be collected via a 0.046 percent assessment (less than 1/20 of one percent or 46 cents of every $1000) on the free-on-board (FOB) market value of fresh and processed fruits and vegetables, including beans. Both domestically grown and imported product would be included. (Exports would not be assessed.) The creation of such a promotion board would be dependent on the outcome of a referendum, or vote, of first handlers. If created, all first handlers would pay.

  9. Equitable Assessment Across Commodities

  10. 1st Handler Assessment = Importer Assessment

  11. What could be done with $30 million?

  12. Social Marketing Approach Positioning Product Price Place Promotion

  13. Positioning

  14. Product: changing behavior

  15. Price: beyond what it costs in money • Time • Pleasures that have to be given up • Loss of self-esteem, pride, dignity, health • Psychic hassle of having to change behavior • Cultural fads or trends • Social support • Economic trends • Beliefs • Self-efficacy • Attitudes

  16. Promotion: grass-roots involvement North Dakota Florida Hawaii Idaho Texas

  17. Promotion: supermarkets To Date: >25,000 Stores Meijer Nash-Finch Pathmark Price Chopper Publix Raley’s Redner’s Roche Bros Safeway Savemart Schnuck ShopRite Spartan SuperValu Times United Wal-Mart Wegman’s Weis Wild Oats Ahold Associated Food Stores Associated Grocers, LA AWG Big Y Bozzuto’s Brookshire Clemen’s Coburn’s Dierbergs EW James Felpausch Food Lion Giant Eagle Harris Teeter HEB Hy-Vee Key Food Stores Kroger Lowes

  18. Promotion: packaging To Date: >1300

  19. Promotion: magazines, newspapers, web

  20. Promotion: website

  21. Promotion: education materials

  22. Promotion Opportunities Public service advertising Paid advertising More earned media relations Celebrity spokesperson TV programming Social media Emerging technologies Partnerships Partner tools and materials Research

  23. Examples: outdoor http://www.youtube.com/watch?v=GCh4hsCUBGc

  24. Commodities assessed to raise $30 million All forms combined, excludes processed potatoes

  25. 0.046% Market Value – Top 20

  26. 0.046% Market Value – Next 18 Data not available

  27. How much would it cost 1st handlers? Total fruit/vegetable sales; subtract exports; subtract shipping; then multiply by 0.046% $ 50 million = $ 23,000 $ 75 million = $ 34,500 $100 million = $ 46,000 $200 million = $ 92,000 $500 million = $230,000 $750 million = $345,000 $1 billion = $460,000 Any exemptions? • 1st handlers who sell “direct to consumer” (e.g. farmer’s markets) • 1st handlers whose total operation is organic (required by law)

  28. Delayed referendum vs. upfront referendum Upfront Referendum • Vote prior to promotion board Delayed Referendum • Vote up to 3 years after first collection of funds To pass a Referendum • > 50% of those voting

  29. Conclusion General sense that barriers outlined in the past can be overcome… Seek feedback from industry

  30. Feedback Pros Cons belief that grower pays ultimately no guarantee profits will increase can’t afford it $30 million may not be enough already pay into a program many competing interests what would campaign look like we’re not one category 10 x return; others could pay too research says it does; no panacea can’t afford not to other brands have done it possible credit back provisions outline governance structure outline process to decide we ARE from a health perspective

  31. Next Steps

  32. For More Information www.fvcampaign.org

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