Archive for May, 2008

This is not meant to be the Chiquita blog, but…

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You really can’t help it when you see stuff like this. What does this mean? I can’t tell, because – and this is another news flash – Chiquita has redesigned its website so that it de-emphasizes bananas – and made it unnavigable in the process (I tried to find some kind of marketing info on the sticker. No luck.) But even weirder, given the company’s recent history of terrorist payoffs in Colombia – money which went directly for arms purchases – is the slogan itself. Fights for you? Does anybody at the banana giant’s corporate headquarters think about this stuff?

I would love to see some normal news come out of Chiquita – but there doesn’t seem to be much, other than an announcement of increased profits thanks to higher banana prices in the first quarter of this year.

Chiquita’s bad news leads to a bigger question. As I noted in the post before this one, Dole and Del Monte have also now been accused of paying protection money in Colombia. But it is Chiquita that is getting hammered in the media. I wonder if the company regrets going public. Probably. But the reason it is getting the beat down it is now receiving – in my view – is not because it went public. The reason is that it went public only halfway. Watch the 60 Minutes interview again, if you haven’t already. Chiquita CEO Aguirre is ducking and covering. He’s pretending to take responsibility while not taking responsibility. The company is getting hit because it is claiming to have done the right thing when it clearly didn’t, and that leads to the suspicion that it went public not because it felt that it was ethical, but because bad stuff was coming down the pike, and it needed some quick cover.

"60 Minutes" on Chiquita and Colombia

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Though it fails to mention Chiquita’s long and bloody history in Colombia, the CBS News program’s report – which aired on May 11 – detailing the banana giant’s payments to terrorist groups in Colombia, and the consequences of those payments, is remarkably hard-hitting, and features a sit-down interview with Chiquita CEO Fernando Aguirre, who – to me – dodges a lot of questions. The big scoop here are accusations from a jailed Colombian terrorist that Dole and Fresh Del Monte also made payments.

What do you think? Is the report fair? Is Chiquita ducking responsibility?

Chiquita's Banana profits and new African plantations

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Just a couple of quick notes from Chiquita’s first-quarter financial report, issued May 1. The company made a $31.7 million profit – after losing $3.4 million the same period last year – fueled mostly by surging banana prices. What’s interesting is that the actual amount of bananas people bought dropped – by one percent in the U.S., and fourteen percent in Europe – but because of bad weather and other market conditions that have constrained supply, prices have shot up: by 18% and 26% in the two selling areas, respectively. This made Chiquita CEO Fernando Aguirre very happy: “Banana pricing is very acceptable,” he told investors, noting that prices have held pretty steady for over a decade.

The other bit of interesting news is the soon-to-come opening of the first big Chiquita plantations in Africa, in Mozambique and Angola. The reason these commercial banana farms are being launched on that continent is to get around European tariff regulations that make Latin America-originated bananas expensive to sell in Europe. But it was the cutting of land for new Cavendish (that’s the world’s commercial banana) plantations in Asia two decades ago that led to the spread of Panama Disease there; that malady is now epidemic and threatens the world’s banana supply. There was no mention in Chiquita’s earnings call – nor has the company ever mentioned – what precautions it is taking to make sure the new plantations it is opening, or the transportation networks that connect the plantations to shipping areas, will be effectively sealed from existing banana crops. I can’t even begin to state how important this is in Africa, where bananas are a major subsistence crop, though I can tell you why Chiquita has made no such statement: because it has been proved, over and over, that it can’t be done.

And in good news, Chiquita has just posted a fantastic “cool stuff” page, with tons of old print and television ads, banana stickers, and other archival material. I’ll highlight some of it in the future, but it is definitely worth exploring.

News article on Chiquita’s earnings call here. Download a pdf of Chiquita’s results here. Listen to audio here.

Gallery: Fair-Trade Plantation in Ecuador

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Image: Guardian newspaper, UK

A good slideshow from the U.K.’s Guardian newspaper, featuring a plantation in Ecuador operated under the “Fair Trade” system, which guarantees workers a decent living wage and benefit. This is especially important in Ecuador, the world’s largest banana exporting nation, which has weak labor laws. It is, however, hard to say exactly how much good banana workers derive from Fair Trade – such fruit has very low market share, and the actual benefits aren’t clear (for example, in the gallery linked below, one of the positives is touted as labor-saving cable systems that make it easier to move bunches to packing areas, as opposed to carrying them manually. The reality is that most commercial plantations use cable systems – because they’re more efficient, not out of altruism.)

The trick with banana fair trade is going to be figuring out how to make it work with a product that is, essentially, an ultra-cheap commodity. Fair-trade coffee is successful because people are willing to pay $14 a pound for it – you can match it up with high-quality beans and essentially offer a premium product at a higher price. Right now, the most successful fair trade bananas sold in the U.S. are offered as an ingredient in Ben & Jerry’s Chunky Monkey ice cream; again, that’s a product folks are willing to pay extra for. It remains to be seen whether Fair Trade bananas can be sold in large scale at the low prices most American consumers would probably demand. I hope the answer is yes.

CORRECTION: Fair Trade Chunky Monkey is – it seems – only offered in the UK version of the flavor (see this video, from the Brit B&J website; click on the “Ecuador” link at the bottom.) I’ve got a request in to the ice cream makers’ U.S. spokespeople for clarification.

Watch the Guardian slide show here.

The bananas from the plantation pictured in the Guardian essay are marketed in the US under the OKE brand name. Find out more about them – including where to buy them – here

Help Flooded Ecuadorian Banana Farmers

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Images from Oke’s Flickr photostream.

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To assist washed-out Ecuadorean banana farmers, fair-trade importer Oke is taking donations to buy a Bobcat earth-mover. It’s a worthy cause. Read about it here.

More on fair trade, Ecuador’s floods, and rising banana prices here, here, here, and especially here.

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