For an industry that faces possibly the most obstacles regarding sourcing, logistics, year-round production and demand, banana suppliers don’t get a lot of money for their product. Currently a single banana is retailing for around 12p in some stores.
According to Kantar Worldpanel data, nearly 740,000 tonnes of bananas were sold in the retailers in the last 12 months, which equated to a growth of 1.3 per cent.
However, losses in real terms continue to be made. The category saw a decline in value of 5.1 per cent, meaning a loss of £41 million to the sector as a whole in the last year. Historically, Asda has been the retailer pushing down the banana industry’s bottom line and others have followed. But the most worrying thing about this quarter’s figures could be that Sainsbury’s is leading the retailer wars this time and making the largest reduction of 10p per kilo, despite its 100 per cent Fairtrade pledge.
“I am surprised by Sainsbury’s,” says one insider. “I’m sure it will tell you that it takes the cut, but it undervalues the brand and just makes trouble for other Fairtrade supporters like Waitrose and The Co-operative. Sainsbury’s really shouldn’t get involved in the retail price wars.
“Regardless, there is neither rhyme nor reason to this retail battle and the only ones that immediately miss out are them. It makes no difference to the consumer if bananas are £1 or 30p a kilo; they will buy them anyway, and they certainly won’t swap where they shop because of the price of bananas. It also does nothing to increase sales.”
Some believe that brands could be pushed forward if the supermarkets backed them. As part of that, consumers would be informed of what it really takes to grow, source, transport and ripen a banana. It has become more of a complicated issue since retailers have been sourcing directly. “The logistics of the industry would have to change for banana brands to get some kind of recognition on the supermarket shelf,” says another source. “I hate to say that that’s never going to happen again, but it may never. But our edge is given by our story, as in the fact that bananas are grown on the other side of the world and the complex nature of ripening and shipping, as well as the costs involved. We do school talks and some children do think that bananas come from a Tesco car park. We need more education to create value.”
As the winter months prevail, the usual supply issues materialise as European stock dries up. Both retail and wholesale prices will rise over the next few weeks and up until June, fruit will not be plentiful. Already there has been a jump in price from 600-900p to 1200-1400p a kilo in the last week. “Financially the cost is not so important any more as a lot of the main retailers are sourcing directly, so money doesn’t go through the hands of the middle companies,” says one source. “It is beneficial for companies on a day-to-day basis and the consumer’s perception of value doesn’t change. They don’t care what price it is, as long as it’s the right size and colour.”
But shoppers continue to surprise the industry, with a real interest in accreditations such as Fairtrade and the Rainforest Alliance, for example. The start of the year saw a report called Bitter Bananas, published by Oxfam Germany, in which Ecuadorian banana producer Favorita was criticised for its alleged less than adequate social and environmental practices through its subsidiary Reybanpac. The company fought back, citing its credentials according to GlobalGAP.
“We should welcome criticism on matters of CSR as long as people make amends,” says one insider. “It’s easy to cherry pick and point the finger, but there should be a more holistic approach. It is not a perfect world and this is a natural product.”
In a further reflection of the tough times facing banana suppliers at the moment, Chiquita has been downgraded to “underperforming” by research firm Zacks Investment in the past week, with a net loss of $29m (£18.6m) reported by the company for the third quarter of 2011. -
GROWING THE PERFECT BANANA
New research has thrown new light on what impacts the banana’s rate of development.
Bananas prefer longer days, according to new research that overrules the widely accepted belief that temperature is the key to banana development.
Chiquita Brands and the University of Western Australia (UWA) teamed up try to establish what influences the banana plant’s rate of development and flowering.
The study found that longer photoperiods - the time from sunrise to sunset - during the reproductive phase meant an increase in the rate of bunches at the top of the false stem that surrounds the growing point, known as the pseudostem.
The breakthrough is expected to help growers get better results by refining their planting timetables.
The study, published in the Commonwealth Scientific and Industrial Research Organisation’s Functional Plant Biology gathered data from Puerto Rico, Ivory Coast, New South Wales and South Africa.
Scientists analysed the sensitivity of the plants during the juvenile phase, the mid-vegetative phase, and the flowering phase to photoperiod in each location. Co-author and UWA honorary research fellow David Turner told Science Network Western Australia that the effects of photoperiod on bananas had not been fully explored before now.
“Originally we thought the development of bananas wouldn’t be responsive to photoperiod but there’s some literature that says temperature isn’t the only thing that explains it,” Turner said. “Once we got into the numbers we were surprised that the message seemed to be so clear across all locations.
“We had several data sets-we were able to calculate what happened in one and then use those numbers to predict what was happening somewhere else.”
Science Network also said there is debate whether it is the length of day or the amount of sunshine that is important in photoperiod and the rate of change of sunrise and sunset and the photoperiod’s effect on plants in the fruit-bearing stage will be studied further in the Canary Islands over the next year.
In the Canary Islands study, artificial lights will be used to prolong the photoperiod, with the results helping to establish benefits of the approach.
Meanwhile researchers are continuing to seek new ways of battling the banana disease black sigatoka, which has caused chaos and losses in many plantations.
Producers’ representatives in the Dominican Republic met late last year to draw up plans to combat the disease, with the minister for agriculture, plant health authority OIRSA and researchers from around the world present. The meeting was convened in response to figures showing that as much as 40 per cent of plantations in the Central American country were affected by black sigatoka. -
No comments yet