The major transnational banana companies at present are Dole Food Co (previously Standard Fruit), Chiquita Brands International (previously United Fruit Company and United Brands), and Fresh Del Monte Produce. Other two strong banana companies are Fyffes, the leader European fresh produce distributor, and Exportadora Bananera Noboa (Bonita brand), the leader exporter in Ecuador (with about 25% of Ecuadorian exports). In addition, some examples of national companies like Uniban-Turbana in Colombia, for instance, are also performing well in international banana trade.
World market shares of banana companies
Source: The World Banana Economy, 1985-2002, FAO (data from 1966 to 1999), Banana link (for 2007 data)
The analysis of these figures shows that the three leading banana corporations controlled 60% of the global banana market during the 1980-2000 period and about the two thirds in 2007. Considering the five leading companies, they accounted for more than 80% of the world market in 1999. Chiquita's banana market shares have substantially decreased during the nineties, mainly due to the introduction of the EU Banana Regime in 1993, while Dole has increased its market share, both in the world and in the EU. Dole has recently overcome Chiquita and has become the premier banana company in the world. The loss of market share for Chiquita seems to be much more important in the European Union market, showing the adverse effect of the EU Regime on the company.
During the nineties the banana market has assisted to a process of intense and increasing competition among transnational corporations, in order to maintain and improve their positions in the different importing countries (particularly in the EU) and increase their banana market shares. The different challenges they have been facing in their banana operations, such as the oversupply crisis and the resulting low prices, the evolution of the EU banana regime and the WTO dispute as well as the increasing market power of retail chains and the changing consumer preferences have obliged these companies to reorientate and reformulate their marketing strategies, by trying to reduce costs, improve their efficiencies and rationalize their banana businesses. They are diversifying away from bananas into other fruits, as well as to other areas in Africa or Asia, moving to niche markets as organic bananas or developing alliances with strategic European operators. Banana companies have been refocusing their core operations.
The attitudes of the different corporations have diverged. Chiquita has followed a more defensive or conservative market strategy, by lobbying with the US Government in order to challenge the EU Banana Regime at the WTO. In addition, during these years, Chiquita focused on the brand element, without paying sufficient attention to new investment in strategic alliances with operators having an influence in the EU market, as other transnational companies did. In the banana market, the influence of brand names in consumers´ decisions is not so clear . Nevertheless, Chiquita considers that consumers value their brand as an image of a product of quality and are ready to pay more for it.
On the other hand, Dole, Fyffes and to some extend Del Monte, have been more pro-active or even aggressive in their market strategies. They started to reduce their high dependence on bananas earlier than Chiquita and diversified more than Chiquita into other produce, while moving to other producing areas in order to benefit from the EU Banana Regime by getting access to the importing licenses. Dole and Del Monte moved to ACP countries, while Fyffes tried to take positions in the Latin American countries. The following table shows the levels of dependency on bananas for the major fruit traders in 1999. As an example of diversification away from bananas, Del Monte share of bananas over total sales went down from 56% in 1998 to 40% in 2008.
Banana sales as percentage of total turnover
Source: UNCTAD Secretariat from Chiquita
and Del Monte annual reports.
The combination of unfortunate market circumstances and inadequate market strategies put Chiquita in a very difficult situation, suffering continuous financial problems that obliged the company to file a Plan of Reorganization under Chapter 11 of the U.S. Bankruptcy Code in November 2001. Since this date, Chiquita has gradually improved its financial situation from 2003 to 2005, finally recording a net income of 131 million dollars the last year. However, new periods of deficit have been recorded in 2006 (-96 million dollars) and 2007 (-49 million dollars).
Links to banana companies
Organic and fair trade
Community Banana Trade Association. List of members