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3 Ways Your Trade Association Is Pushing Your Company To Extinction
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3 Ways Your Trade Association Is Pushing Your Company To Extinction

Hank Cardello

If you shopped for candy recently, you may have noticed that individually sized packages have been getting smaller. It’s not because candy companies are getting stingy. Rather, it’s because the National Confectioners Association, in response to an alarming rise in America’s obesity rate, more than two years ago announced its Always A Treat Initiative. It’s a marketing commitment that casts candy as a treat to be savored in smaller portions rather than gobbled down like popcorn.

By convincing its members of the need to ascribe to a higher social cause, the move made NCA a rarity among trade groups. The association, which supports Mars, Hershey, Ferrero, Ferrara, Lindt and more than 200 other large and small confectioners, induced those companies to commit to make more than half of their single-serve product sizes no more than 200 calories by the end of 2021.

NCA, which meets next week in Boca Raton for its annual State of the Industry Conference, is an example of what its CEO John Downs calls a “purpose-driven trade association.” It has become an industry group that is reaching beyond its own self-interests and bringing member companies to be more in touch with the social issues of consumers.

But too many trade associations, especially in the food and beverage industries, have behaved more like exclusive country clubs that exist just to lobby, fight change and preserve their members’ interests at all costs. This puts them and their member companies in danger on three fronts: becoming irrelevant, raising the ire of regulators, and jeopardizing future sales by ignoring changing consumer preferences and societal concerns.

Trade associations and their leaders can no longer afford to ignore consumers’ clamoring for healthier foods and the societal problems that they have contributed to outside their gated enclaves. Environmental and sustainability problems have reached the tipping point. Single-use packaging is polluting oceans and being turned away from overflowing landfills around the world. Activists and regulators are calling for taxes and bans on products that add to our waste and our waists. Respected scientists are targeting the food industry for its role in public health crises like obesity and climate change. In short, by focusing only on parochial needs, these associations jeopardize themselves tomorrow.

Along with losing member companies, it’s no surprise that some associations are skirting with irrelevance. The Grocery Manufacturers Association already lost eight of its largest members, including Nestle, Unilever, Hershey and Cargill. The trade group drew fire for being out of touch with today’s consumer needs for better nutrition, transparency and sustainability, and for being too focused on lobbying against consumer-friendly labeling about added sugar and GMOs.

The grocery industry’s trade arm, the Food Marketing Institute, once held a hugely popular, celebrity-studded annual conference. But in recent years, attendance dropped off substantially and the show was nixed.

And while the National Restaurant Association (NRA) is hanging onto its members, it’s still too inwardly focused. Its sole effort at helping patrons eat healthier – the Kids LiveWell program – does not go far enough: there are no measurable goals to improve the nutrition in products sold to children.

In response, the Grocery Manufacturers Association has rechristened itself the Consumer Brands Association (CBA). The former Food Marketing Institute (FMI) is now called FMI-The Food Industry Association, filling the void left by the original GMA.

But name changes are not enough. The primary raison d’être for these trade organizations remains protecting its members’ fiduciary interests and building industry influence. They fail to marshal their considerable energies and influence to solve the social problems that are shifting the paradigm. My experience with such trade groups shows me that focusing only on self-interest no longer works.

To be fair, there are signs that some organizations are heeding the message. For example, the American Beverage Association, despite spending millions of dollars fighting soda taxes, eventually pledged to eliminate 20% of calories sold per person by 2025. The CBA just launched the Recycling Leadership Council to revamp the U.S. recycling system. Several members of the National Association of Convenience Store (NACS), including Sheetz and Kwik Trip, have joined the Partnership for a Healthier America to improve the nutritional value of foods they sell and to offer more fresh produce. And the new FMI is rallying their members to get behind the family meal movement, encouraging one more meal at home per week.

We need more leadership like the NCA has demonstrated for food and restaurant associations. To help their member companies grow and stay relevant, here are three things their leaders should be doing:

**Lead, don’t be passive.** Waiting for your member companies to tell you what to do is not a leadership principle. They are focused on running their day-to-day businesses. Companies need guidance in today’s world of confused consumers, aggressive activists and public health issues related to their businesses. This is the correct role for a proactive industry group.

**Own the biggest issues affecting your industry.** The next generation of association leaders need to size up the issues – business AND social– that are confronting their members. Looking only inward at specific industry matters such as labor costs, regulatory actions and promoting the industry does not fully serve members. If your products contribute to obesity or pollution, don’t deny it. Make that problem a focal point to address.

**Make concrete public commitments to fix those issues.** Food and restaurant corporations do not want to be blamed for the three food-related crises laid at their feet – obesity, undernutrition and climate change. Nevertheless, their products do contribute to those problems. These companies must recognize this, and then commit to solid goals to measure their progress. The confectioners’ Always a Treat Initiative and the ABA’s pledge to eliminate 20% of industry calories are examples of the kinds of actions that can be taken.

Purpose-driven trade associations resist the urge to “dig in and fight.” Instead, they help their members grow by attacking the social problems affecting their industry and aligning their products to meet the demands of tomorrow’s health-conscious and socially aware consumers. When they lead like this, everyone wins.

Read in Forbes

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