(From NAMI Headquarters, Washington, DC) A few weeks ago, Barry Carpenter and I talked about a lot of things during a lengthy conversation about the newly formed North American Meat Institute, the new borne offspring of a union between the North America Meat Association (NAMA) and the American Meat Institute (AMI). In part 1 last week, I asked him about member concerns and what’s happening with a long list of formerly NAMA and AMI conferences and conventions. To read that interview, click here. This week, we talk about the people charged with leadership, hear what he says about COOL and I ask him where he wants to take this new organization.
ABOUT THE PEOPLE IN CHARGE
Q. Tell me a little bit about the Executive Board. How was it put together?
A. The Executive Board consist of members selected from the Board of Directors. The initial Executive Board is a combination of the prior NAMA Executive Committee and the AMI Executive Committee. The combined committees resulted in a group of about 40 leaders.
Rather than disenfranchising any current leaders of NAMA or AMI, we combined both for the first three years. We also combined the prior Boards to form the new Board of Directors. In order to make sure there is balanced representation, in the leadership group, we have minimum requirements in our by-laws for Directors from four different categories based on number of employees: 50 employees and down; 51 to 300; 301 to 2,000, and 2,001 and up.
We’ve had one Executive Board meeting, and I think it went very well - great discussions, no us and them. Dave McDonald of OSI is our first Chairman. He was an ideal choice since OSI was a member of both prior organizations, in fact OSI was represented on the Board of both prior organizations. Going forward, the leadership rotates through the existing officers from the prior organizations.
Q. Would that be the same kind of set-up as when NAMP and NMA combined?
A. No, we did co-positions that time. During our discussions on this merger with the transition team, none of the people who had been in those positions in NAMA wanted to do that again. Each felt like they weren't the person in charge, and it was just awkward.
NAMI’s Executive Board is a good mix, not only by size of company, but also by business type, whether they're pork producers or food service or whatever. It’s a mix of all business types so there’s plenty of opportunity for everybody to have a voice.
From the beginning of the Executive Board, it was established that we would focus on the future and not talk about how things were done by the prior organizations. To the credit of that group, they’ve kept talking about the future and things we needed to do, what works well, what doesn’t work well, and not referencing how things were done in the past.
I think our focus should be on where we go as an industry and the things that we really need to care about, like our image. Not only the image of our products, but also the image of our businesses and the freedom to operate and the regulatory burden. Everybody was able to rally around these topics.
Q. You have 107 Board members? Isn't that unwieldy?
A. NAMA and AMI each had 60 Directors on their Boards. We had 26 companies that were members of both prior organizations. In case where they were represented on both Boards we were able to reduce the total number of Directors. So we ended up with 107. Over time attrition will reduce the number. Our by-laws provide for 40 to 80 Directors.
Q. So you'll cut down on its size through attrition?
A. Attrition will happen. Right now, everybody has a three-year term. After the first three years, we will go to staggered one-, two-, and three-year terms so we will have a normal flow. We didn’t want to have the disruption of changing people during our first three years. We wanted to have a good, stable, well balanced group, let them all work together, focus on the issues, and then during the third year begin the nomination process for the next round.
In the merger development process, we really focused on governance things. A lot was obviously lessons learned from the previous merger. You do things you think are best at the time like the co-officer thing, and if they don't work well, you drop them.
Q. Were there a lot of things you did during the NMA/NAMP merger that you could look back and say, “That worked” or “That was a bad idea”?
A. The NMA/NAMP merger experience was a great asset actually. We could identify things that take their toll as you work through the process. There were things we did then that could have done better, and there were things that we did that really hit the mark so we tried to focus on those going forward.
On the transition team we had equal numbers from both groups. The NAMA side was able to speak with a lot of authority on what worked and didn’t work. The AMI group generally deferred to past experiences on those kinds of process questions. I think the time and effort put in by the merger team, working through the issues, getting to a vote on merging, and establishing the transition team was well spent. We tasked them pretty hard to be involved in a lot of conference calls and face-to-face meetings. But it made them think and see the process and buy in to where we’re going.
Q. How was staffing effected?
A. We kept staff at a level that we may not have in our prior organizations in order to be able to really focus on supporting, maintaining and growing membership. We wanted to make sure that none of the members felt like they’ve somehow gotten lost in the shuffle. Everybody was concerned about membership because, when your objective is to do the things we wanted to do for an industry, you need to have everybody in the mix at the table. From an internal perspective, the top priority has always been membership.
ABOUT FUTURE DIRECTION
Q. As you look at the issues that are here right now and that are coming up on the horizon, can you point with pride at some and view with alarm at others? What gets you excited and what causes some concern?
A. I think the recent wave of more transparency into what the real nutritional values are of meat products is something really exciting. You don't change people’s thinking overnight, but getting more information out there to take the bias out of the discussion by really getting into peer reviewed science is critical. That’s an opportunity that we have as an industry to really get out there with our messaging. So that’s something that’s really exciting.
A major challenge is the regulatory burden. I don’t know where that stops. I think regulations are important. Most of the regulations affecting our industry have historically fallen in the food safety area. I agree regulations are a critical part of a sound food safety system but the process has to be done in a way that doesn’t restrict the industry’s ability to use new processes and technology to improve safety.
Most companies in our industry recognize that food safety is critical whether it’s a government mandate or not. In addition, given the cost of a recall or someone getting sick, the priority is to offer the public a safe product, and companies will do whatever they can do to deliver. There are innovations, going on all the time in the industry, designed to produce a safer product. Many times these innovations run afoul with the older regulatory processes. Having the freedom to develop a better process even though it doesn’t fit the standard model is important.
Of course, regulations matter because there’s a certain element in any industry that’s going to be at the “what can I do to just get by” level. The regulatory process is essential to keep bringing them along with continuous improvements. It’s having minimal impact on the progressive operators because they're so far ahead of that level. The challenge is, how can the regulatory process do what it has to do to assure continuous improvements in our food safety system but, at the same time, not hamstring the more innovative processors who are always pushing for improvements.
Q. You’ve been in government for a long time - thirty-seven years, and you’ve been in the association end for about eight years. You’ve got this 45-year over view of government regulations. Is it worse now? Are there more regulations, more onerous regulations? Or has it just been a continuous and gradual move forward based on new knowledge?
A. We’re worse as far as more regulations. Is it more detrimental to the industry? Probably not significantly, but it does add a lot of costs. That’s the challenge we face, and our job is to make sure that the regulators don't go overboard. For example, the issue on salmonella that’s out there right now; considering classifying salmonella as an adulterant is a concern. Fortunately, the government is doing a very good job right now of saying “Wait! Until we understand what we’re doing here and can do it so that we have a positive outcome, we’re going to keep sorting things out.”
As you know, there are lots of strains of salmonella, some that are really bad, some that aren't. Until we know more about it and where to target the regulatory process, we need to keep doing more analysis and more research to get that sorted out so that when a regulation is implemented, there’s a positive impact on human health.
I believe USDA has learned a lot about dealing with pathogens since the initial regulatory efforts to control E. coli. The seriousness of the situation caused USDA to declare E. coli O157:H7 an adulterant without any regard for how the industry would be able to manage the issue or make changes to better control the pathogen. It was several years before technology and processing methods were developed that enabled the industry to effectively address to issue.
When we have regulatory process that’s adding no value for anybody, we have a problem. Those regulations are increasing costs and putting a bigger burden on the whole industry. Some of them are regulatory processes that are trying to control the market instead of allowing a free market to operate. Those are the kind of things that we are constantly watching. COOL, for instance, is the poster child for a bad regulation. Nobody has ever been able to identify any value-added benefits for COOL.
Q. R-CALF says the added value is people will know that if it’s American beef and that’s better.
A. COOL has been implemented for about six years and there is no evidence that it has any value. The industry has incurred millions of dollars in costs with no added value. COOL has nothing to do with product quality or safety. Like any product attribute, if people want to buy meat from animals born in the U.S. the marketplace will provided it. The COOL regulation prevents the industry from being able to be innovative and target a niche market that may exist. That opportunity has been taken away from those interested producers and processors who would love to sell a COOL labeled product. They need to have that freedom to operate, no different than selling Organic, Natural or Certified Angus Beef.
Q. So it should be a marketing decision that ought to be handled company-by-company?
A. Right, we've watched some significant transitions in the marketplace such as organic. There’s still not a huge amount, but it has a very steady, steep growth. If somebody wants it, all they need to do is ask for it and pay a little more for it. Give those companies that want to offer something new the freedom to operate and make those kind of products available instead of forcing a cost on society that delivers no value to them.
I think you’ll see a mixed bag at some point when it comes to country of origin labeling. I think you’ll see the marketplace taking advantage of that which is good. If I’m a producer, and I’m adding extra costs, I should be able to capture the value that I've created.
The pro-COOL supporters are trying to want to capture value they never created, there’s no return on that noninvestment. It’s just an added cost to everybody in the system. The big loser always ends up being the consumer because it adds cost to the product over time.
Q. Look down the road, look to the future for a little bit here, where are you going to be? You're taking the lead position in this new organization. Are you going to be around for another 10 years?
A. Who knows? I hope I’m healthy and stay around. I committed to our Board that I’d stay at least three years. Regardless, there will be continual leadership in this organization focused on where our members want to go. I think, by having the member leadership we have, they will bring on additional leaders that have the same mindset. Whomever is leading this organization will be focused on the breadth of the membership and what their needs are. We're certainly there now, and I think anybody that would ultimately replace me would have similar views and objectives.