Onion shippers take on more marketing efforts
ONTARIO, Ore. — When the Idaho-Eastern Oregon Onion Committee cut its checkoff assessment in half last year, it slashed the budget for its promotion committee, from $635,000 a year to $250,000.
The region’s onion industry is still conducting marketing and promotion efforts, only now it’s being done mostly by individual shippers instead of the IEOOC, which administers the federal marketing order that covers onion growers in southwestern Idaho and Eastern Oregon.
Many people felt the committee’s promotion dollars weren’t being used as effectively as they could and the idea in cutting the assessment was to allow growers and shippers to use the savings to do more of their own marketing, Malheur County Onion Growers Association President Paul Skeen said.
The IEOOC in 2015 cut its assessment from 10 cents to 5 cents per hundredweight. Growers pay 60 percent of that assessment and handlers the rest.
“We streamlined and cut the fat out of the program ... where we didn’t feel like we were getting the right bang for our buck,” said Skeen, a farmer and member of the promotion committee.
The committee trimmed its media campaign but still maintains a visible profile in the industry, said Grant Kitamura, chairman of the promotion committee.
For example, the committee has continued its website and social media efforts and printed 1,000 onion shipper directories that it hands out at trade shows.
“We’re working hard to keep (the budget) down and try to get the most bang for our buck,” Kitamura said. “And hopefully ... shippers are moving forward with their own company promotions and marketing efforts. I think it will be a better return (on investment).”
USDA rules governing federal marketing orders tie the promotion committee’s hands in some areas, he said, For example, the committee can promote and market but can’t actually make sales, “which is kind of the ultimate goal.”
The onion industry’s customer base has also consolidated heavily over the years and its customer lists are much shorter now, so it makes sense for individual shippers to go after a few large chains themselves, Kitamura said.
“It just allows more aggressive marketing and sales,” he said of the assessment cut plan. “We will have more flexibility to go directly after customers and hopefully make that sale. You’re not going after a bunch of mom and pops any more, you’re going after one big chain....”
Early indications are that most shippers are using the savings from the assessment cut to do more marketing and promotion, said Kitamura, general manager of Murakami Produce in Ontario.
Skeen said the committee will review the assessment cut down the road but for now, “everybody seems pretty happy with it.”
The IEOOC’s research and export budgets were not impacted by the assessment cut.