Excerpt from Banana Wars - the Price of Trade by Gordon Myers
...The development of the banana trade to the UK had transformed the life on the islands from the parlous conditions noted by the Royal Commission in 1939. By the 1980s, the economy of the islands had greatly improved, although there was still much unemployment. But bananas were the economy - and they depended entirely on the protected UK market. It was impossible to contemplate pulling the plug on these island economies and plunging them back into their former poverty.
In other Caribbean states, bananas were less crucial to the economy as a whole than in the Windward Islands. In Jamaica they accounted for little over four per cent of total export earnings in 1991, but production was concentrated in the three countries of Portland, St Mary and St Thomas, and loss of trade would cause severe unemployment and economic hardship to those area. The situation was similar in Belize and Surinam.
The problem was - and remains to this day - that Caribbean banana production simply cannot compete on price with bananas from Latin America. Production, particularly in the Windward Islands, tends to be on small farms and largely on hilly land. The crop has to rely essentially on rain, since irrigation for the small farms would be very expensive and is in many places impracticable. But reliance on rain alone leads to large variations in yield. Shipping costs in the Caribbean are also high because vessels have to load at several ports, and because the variable volumes available increase unit costs.
This contrasts with the vast flat plantations in Latin America, often many thousands of hectares in size, which are operated on an industrial basis, with huge investments in mechanisation and irrigation. Soil depths and mineral contents are better in Latin American and provide a yield per hectare more than double that in the Caribbean. Moreover, large areas of plantation land are situated around ports dedicated to banana shipments. These factors offer substantial economies of scale. As a result, export prices for Latin American bananas were less than half the level in the Caribbean.
If the UK were to remove the protection under which the Caribbean industry had been encouraged to develop, the industry would be destroyed. This would create economic and social turmoil to a degree that would be politically unthinkable. As Dame Eugenia Charles, the charismatic prime minister of Dominica subsequently put it: ‘If we lost the industry completely, we would lose the country. It would be the beginning of despair.’ That is why the UK stuck to its policy of protection, insisting only, in return, on measures to ensure satisfactory quality for the British consumer.
Moreover, the consequences of a collapse of the Caribbean banana industry would not be confided to the few exporting countries. The damage could be far more widespread, because of the potentially adverse impact on the common Eastern Caribbean currency, which had remained stable at EC$2.7 to US$1 since 1971; and because of the close trading relationships between members of the Caribbean Economic Community (CARICOM). Loss of banana income would reduce the ability of the exporting states to maintain imports from their trading partners.
These concerns have motivated UK policy to the present day. In bananas, an ethical trade policy has consistently been given priority over free trade. John Selwyn Gummer, as Minister of Agriculture, stressed the moral dimension of this policy in response to questions by the House of Commons Agriculture Committee in December 1992 about ongoing negotiations for the common market regime for bananas:
I am absolutely committed to the production of the ACP producers. I think we have not only a legal responsibility but also a fundamental moral responsibility. These are societies, which depend upon bananas to a degree, which is incomprehensible unless you have actually studied the matter. Secondly they are societies, which are stable and democratic. They have governments, which have sought to carry forward policies which most of us would see as remarkably progressive in the circumstances in which they find themselves. Put that together and you do have moral responsibility which goes beyond the legal responsibility, which itself is very clear and onerous.
The moral responsibility dated back a long way. The legal responsibility arose from the UK accession to the European Community on 1 January 1973. The development of UK policy on bananas must now be seen in this wider European context.
READ TAPS IN TO 5-A-DAY
Twenty years of promotion has helped turn the humble banana into the UK’s most popular fruit, and the Banana Group shows no signs of slowing down yet.
Chairman David Read says the Group - comprising members from the UK’s largest banana operators - has high hopes of tapping into the 5-a-day promotional campaign and continuing to build on the last two decades of success.
“The group was founded in 1984 by all the major players in the banana sector,” he says, “and it’s proved to be an extremely successful generic campaign.”
The basic premise of the group was simply to raise awareness of the fruit throughout the UK and help build consumption.
“The decision to form the campaign was prompted by the fact that in 1984, UK banana consumption was the lowest in Europe. We were eating around five kilogrammes per head, compared with some European countries’ consumption of around 9.5kg per head.
“We were way down at the bottom and while we were seeing a little bit of growth, year on year, we felt there was an opportunity to stimulate demand further.”
And stimulate demand they did, from a low base of around 5kg per head, the average UK consumption is now at a whopping 13kg a head. “We’re now the top banana consuming country in the EU, with the exception of some of the Scandanavian countries,” adds Read.
The group’s membership is made up of JP Fruit, Fyffes, Del Monte Fresh Produce, Mack Producers, Chiquita, SH Pratt & Co and Bristol Fruit Sales.
Read, who has been chairman from the beginning (partly because he says he can’t pass the job onto anyone else), says it was a struggle at first, to pull together a number of competing companies to promote a generic campaign, but despite initial teething troubles, the group has run smoothly ever since.
“I can remember very few occasion where we haven’t all agreed on something. We always go with the group consensus, no point having two companies wanting to do one thing, and another two wanting to do another.”
He says: “Everybody contributes to the group, but it’s not massively expensive as we’ve concentrated mainly on the PR side.
“We have dabbled with advertising, but unless you have the money to constantly maintain the advertising, then its not very effective, and we’ve never had the funds for that.”
So the main activities of the group have been generating press coverage and the occasional spot of sponsorship.
“We sponsored the winning cycle team in the round Britain race, and that provides you with plenty of opportunities to gain coverage off the back of the event.
“We regularly do things to tie in with Wimbledon and have had links with Tim Henman in the past as well,” Read says. “We’ve also done a lot of work in schools.”
But with banana consumption at such a high level, where does the Banana Group go from here? Read says there is still opportunity to grow consumption, particularly with the ongoing health debate, and the push for 5-a-day. “It’s an opportunity for all of us and its in our interest to work with it.”
He says, that while bananas are widely consumed, there are some areas to go for. “It’s popular with children as it’s an easy snack you can have anywhere, particularly for the lunch box. However there’s definitely room to grow consumption amongst students and the under 30s.”
He says consumption tends to dip a little in those age groups, although people tend to return to the fruit once into their 30s. “There’s an opportunity there.”
He says they are also waiting to see what happens with regulation: “There is likely to be some major changes in the way the banana market is regulated with regard to the agreements with the EU and WTO and they should take effect from 2006.
“There’s been a lot of discussion, but we don’t know precisely what is going to happen, and probably won’t until the last minute. But once everything has settled, we would expect to keep on going, and driving the sector forwards.”
He says the key thing is to keep innovating, and pushing the activity forward. However at the end of the day, he says simply keeping their message interesting and fresh is the key: “We’ve got the ideas coming through, if we can make things interesting enough, then people will pick up on that.”
BANANA GROUP’S GREATEST HITS
The Banana Group has run a number of highly successful campaigns over the last 20 years.
One of the most impactful was The Sun Banana Diet, a campaign with the national newspapers health editor to create a special banana diet.
The promotion launched in January, a peak time for people looking to get rid of the post-Christmas bulge. It featured an editorial campaign which included a lot of banana related health facts running throughout the month.
The promotion was so successful retailers reported an uplift in sales of around 25 per cent, and some even ran out of the fruit.
A viral marketing campaign took the Group well and truly into the modern age, using the power of email to reach more than 500,000 healthy conscious female consumers.
The project, entitled 'In Your Basket' featured a specially designed game and aimed to promote the natural health and low fat benefits of bananas to women and offered free banana diets and free day memberships to LA Fitness clubs.
Timed to coincide with the summer race to beat the bikini bulge and get fit, the object of the game was to stock up a virtual shopping trolley, with the items from the supermarket shelf that make up a healthy balanced diet, and checkout in 30 seconds. Following each checkout, the game told users whether or not they were fuelling their body with the right combination of foods.
To redeem a free £10 pass to an LA Fitness club, users had to forward the game onto two friends. At the end of the game, users could download a free copy of the banana diet, a daily healthy eating plan to help them manage body weight and overall health.
Another campaign saw the group join forces with TV celebrity chef Ross Burden to launch a nationwide 'Go Bananas on your BBQ' consumer promotion to highlight the versatility of the fruit. It helped to once again promote the benefits of bananas and also increase summer sales throughout the soft fruit season.
A special Banana BBQ leaflet was produced to support the event.
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