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Papaya industry meets to discuss formation of board

ATLANTA — Members of the international papaya industry met Oct. 23 during the Produce Marketing Association Fresh Summit convention, here, to discuss the formation of a national board.

Homero Levy de Barros, owner of HLB Specialties in Pompano Beach, FL, a major papaya grower-shipper-importer, is spearheading the initiative and invited William Watson, the former head of the National Mango Association and National Watermelon Promotion Board, to discuss the process of getting a board up and running.papaya-meetingWilliam Watson of the Fresh Approach speaks with Andrés Ocampo and Homero Levy de Barros of HLB Specialties during the meeting of the international papaya industry to discuss the formation of a national board. (Photo by John Groh)

Levy de Barros opened by thanking the more than 30 members from the main papaya-producing regions in the United States, Mexico, Central America, South America and the Caribbean for their attendance at the meeting, which he said “is about 17 years late.”

He said, “A board will enable us to maintain a steady supply, create demand, educate both the supply chain and consumers, and help our growers get a better price for their product. If we look at the mango and avocado categories, both are taking off [with the help of their respective boards], but papayas are lagging behind. We have a huge potential to increase.”

Watson, who now runs an Orlando, FL-based consultancy called The Fresh Approach, which specializes in helping industries form promotion boards, guided attendees through the process. He said a voluntary association first needs to be formed, and listening sessions would be held to gauge interest in forming a board. If there is a majority of importers in favor of forming a board, a proposal would be put forth to the U.S. Department of Agriculture for evaluation.

“It is recommended that you talk to as many industry members and sourcing countries as possible,” he said. “The USDA will want to see that you have done the legwork, and it is important to get as much support as possible. Ideally, they are looking for widespread support from the industry, not just a simple majority. They will also want an analysis of volume, value, geographic distribution and the impact on smaller businesses.”

If the USDA approves the proposal, an agricultural promotion group may be formed to either conduct research or promote product, “but it cannot set prices or control volume,” he said.

The USDA secretary would then appoint members to the board, and goals of the board, the rate of assessment and who would participate would be established.

“This process could take anywhere from six months to five years,” said Watson. “But I think we could make it happen within 18 to 24 months.”

Watson said if the industry decides to retain him to lead the effort, the estimated cost to get the board up and running would be around $150,000 to $175,000, including his monthly fee, the hiring of some staff and travel expenses.

Levy de Barros said it would take a commitment from the larger importers to fund the startup.

“If we can get 30 of the larger importers to agree to pay $500 per month, we could start the project,” he said.

Rodrigo Lima of Crown Global Corp., a Miami-based agent for the Brazilian papaya entity UGBP, said, “I think we should try it. Right now, we are all working alone toward the same goal. If we join forces, we can help each other.”

But Bill Brindle, vice president of sales management at Brooks Tropicals, the leading U.S. importer of papayas based in Homestead, FL, was skeptical of the return on investment of the board.

“How does a board help me get more money for the product and sell more product?” he asked. “And who right now has too much fruit that needs to be moved?”

Watson responded that there are many different ways a board can help importers get more money and move more product, such as conducting retail promotions and retail display contests, and also ramping up educational efforts. He cited the success of such initiatives by the National Mango Board for increasing sales of that fruit.

Brindle also questioned the amount of the assessment to the importers and whether the total would be enough to lift the category.

A rough calculation based on past volume revealed that the cost per box would be around 16 cents, for a total budget of around $1.6 million, to which Brindle replied, “I am not convinced. Sixteen cents is a lot of money for a commodity with a thin margin. And I question whether $1.6 million will be enough of a budget to be effective.”

Levy de Barros said he is convinced it would be effective and was willing to pay even more, saying he believes an investment of 20 cents per box would bring an extra dollar per box in return.

Jose Rossignoli, category general manager for Robinson Fresh, who is behind the formation of a papaya board, said the “object is to increase demand, and that will improve the price.”

Rossignoli also said he appreciates the skepticism by some of the industry, since “this is the kind of discussion we need to have as an industry if this is going to work.”

Watson said, “One of the best things about a board is that is causes the industry to come together to talk about issues for improvement of the overall industry.”

He added that if a board is formed and it is not working to the advantage of its members, it can be disbanded. “Every five years, the USDA wants to see an ecometric report to determine the ROI.”

Lima of Crown Global said, “I think we should try it. We have a unique opportunity in front of us now.”

Levy de Barros said he planned to contact everyone after the PMA Fresh Summit to get their vote. If there is enough support, he would propose moving forward with the board.

Questioned after the nearly three-hour meeting, Levy de Barros said he was pleased with the turnout and the robust discussion that took place.

“I am very happy with how much we advanced today,” he said. “We had people come all the way from Mexico just to attend this meeting, so we know it is an important issue for the industry.”