NNFA Slashes Retailer Dues To Attract New Members, Build Clout On Hill
This article was originally published in The Tan Sheet
Executive Summary
NNFA is attempting to attract 7,000 potential retailer members, or roughly 15,000 stores, by cutting annual dues for independent stores and small chains to a flat $30 fee
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NNFA is attempting to attract 7,000 potential retailer members, or roughly 15,000 stores, by cutting annual dues for independent stores and small chains to a flat $30 fee. By significantly boosting the retailer presence within its membership, the National Nutritional Foods Association aims to achieve "greater clout in legislative and regulatory arenas and provide a strong foundation for...grassroots efforts," the group said. NNFA anticipates recent interest on Capitol Hill to review the Dietary Supplement Health & Education Act will continue, even if it is delayed until after the 2004 elections, and is preparing for possible lobbying efforts (1 (Also see "Burton, Durbin Chairmanships End; DSHEA Reform May Still Garner Interest" - Pink Sheet, 11 Nov, 2002.), p. 10). "We'll see [DSHEA attacks] increasing in future years, and we think that the largest retail membership that we have here will help us in those types of battles in the future," Executive Director & CEO David Seckman said during a briefing Nov. 14. "We know that DSHEA was passed in 1994 and about every 10 years Congress has a tendency to revisit and re-open major pieces of legislation," Seckman noted. In light of the critical role grassroots lobbying played during the debate over DSHEA in the early '90s, NNFA's decision to build its retailer membership through a discounted dues structure would appear to be a savvy and relatively risk-free move. NNFA currently has about 1,400 retail members (comprising more than 3,500 individual stores) and more than 1,000 supplier members. The association estimates it presently has only 23% of existing natural products retailers as members. Although suppliers represent a smaller number of memberships, they account for roughly 83% of the trade group's total income from dues. NNFA does not anticipate this percentage to change, despite the reduced cost for retailers, because of the anticipated membership volume growth. Retailer dues, which previously were based on annual sales volume, have ranged from $190/year to more than $13,000/year, with an average of $220 per member, according to NNFA. The new dues structure change for independent retailers and chains of 50 or fewer stores will go into effect Jan. 1, the association announced in a 2 Nov. 14 release. Large retail chains (more than 50 stores) will remain under the old pricing scheme. Within NNFA's supplier category, sales-based dues for manufacturers and distributors range from $385 to over $21,000; these dues will remain unchanged and will not increase in 2003. Various dues models are used for other supplier groups, such as publishers and brokers, including flat fees. Member benefits and services will not be affected by the retailer dues cuts, the trade group stressed. The dues reduction is NNFA's most recent effort to bolster membership. In 2001, an initiative in which some supplier members offered to compensate retailers with "products equal in cost to their membership dues" brought NNFA a 6% increase in retail members. Seeking a greater growth rate, an NNFA task force commissioned a survey to gauge retailer and supplier attitudes toward membership. Results showed the cost of dues to be a major factor in limiting retailer participation. The association also hopes members will pass savings from dues on to a newly created "advocacy fund." The fund, which will be used to "educate members of Congress and the media on the important protections provided by DSHEA," will serve as a key tool as NNFA prepares to defend supplement regulations. "Both retailers and suppliers alike said they would be willing to voluntarily contribute to an advocacy fund," NNFA noted, adding it will replace the trade group's existing political action committee and avoid certain restrictions placed on PACs, such as oversight by the Federal Election Commission. Beyond the political ramifications, NNFA's move reflects the pressures trade associations face during a weak economy, particularly in a struggling industry such as dietary supplements. Council for Responsible Nutrition President & CEO John Cordaro alluded to such pressures during the group's recent annual meeting, pointing to the need for consolidation of existing trade organizations (3 (Also see "Supplement Trade Association Consolidation Urged By CRN’s Cordaro" - Pink Sheet, 14 Oct, 2002.), p. 9). |