Archive for 'Bananas'

How NOT To Display Bananas

Aussie Bananas - Eye CandyI would hope that we at least could all agree on this – how NOT to display bananas. I took that photo a few years back at at the Victoria Market in Melbourne – and it was pretty clear that our Australian cousins were in ‘ample supply mode’ at the time.  That did not last for long. The Aussie banana supply situation fluctuates between ‘feast’ and ‘famine’ with regular monotony.

I guess the other thing all New Zealand banana merchants can agree on is that Australia is not New Zealand, particularly when it comes to bananas. For one, New Zealand is an open market whereas our West Island does not allow foreign bananas into the country. Then there is the fact that our bananas need to come by boat, regardless of whether they travel from Ecuador, Panama, the Philippines or elsewhere. Bananas for sale in Melbourne and Sydney come from ‘up the road’. Granted, it is a long road from Northern Queensland but it sure does not involve ports, ships, exchange rates or global brands with a mind of their own.

Regardless of all these facts though, a stable banana supply makes for a settled produce wholesale business. In New Zealand, in Australia and elsewhere. An unsettled banana supply situation causes grief. The nuances might vary from country to country but the net effect is always the same. And the state of the banana displays in our retail stores suggests to me that our banana supply situation is not as stable and/or balanced right now than it could be.

Would anyone care to comment on that?

The Winter’s Tale

seeka_kiwifruit_industries_limitedOnce upon a time, there was “an integrated kiwifruit orcharding and post-harvest company” called Seeka Kiwifruit Industries Ltd, which ran a pretty tight ship in a sector of the produce industry the business understood really well – kiwifruit. That was not a surprise to anyone because one would expect kiwifruit growers to understand everything there is to understand about kiwifruit. And if there was something about kiwifruit the kiwifruit growers who owned the orcharding and post-harvest company did not understand about kiwifruit, they could always ask the good people at Zespri who understand the marketing aspects of kiwifruit really well. Because unlike the orcharding and post-harvest company, Zespri really understands everything there is to understand about dealing with kiwifruit retailers and their needs, demands and quirks.
Being a kiwifruit grower has had its ups and downs in recent years, but the kiwifruit orcharding and post-harvest manager in question sought NZX listing and developed a strategy which can be found on its website. The strategy says that the company wants to be “New Zealand’s premier produce business”, and that “developing complementary business” will add to the company’s prospects for future growth. As one would expect from a kiwifruit orcharding and post-harvest company, it already packs a complementary crop, avocados, and the 2013 Annual Report states “limited volumes of Kiwiberries will be handled…in 2014”.

No big surprises so far – and the fairly ambitious statement about wishing to be the country’s premier produce business could be seen as a bunch of Bay of Plenty growers having gotten carried away at a strategy & vision session.

And then there was this announcement recently:

Seeka Kiwifruit Industries Limited advises that it has agreed to purchase Glassfields (NZ) Limited“.

I beg your pardon?

Did I get this right?  A kiwifruit orcharding and post-harvest company is buying a banana importer which exists at the grace of Countdown?

Apparently, I did understand correctly.  The purchase was completed on 17 April.

Now, adding a banana importing and ripening interest to one’s produce business activities is a significant undertaking in anyone’s book.  Well, almost anyone’s.  Here is how Seeka classified its move:

“Glassfields is a small but important step in Seeka achieving its strategic goal of becoming New Zealand’s Premier Produce Company.”

A small step? I don’t think so.  Bananas are the ultimate big league product. Kiwifruit are important to the extent that we manage to fill whole reefer vessels here in New Zealand and send them to the world’s markets.  But within the context of the global fruit trade, Kiwifruit are one of many ‘also run’ sub-tropical products on offer on the world’s fruit & vegetables shelves and any supply issues or disruptions at store level is at best of nuisance value. Woe behold though, if a supermarket experiences a banana supply problem and be it ever so small. Produce shoppers judge the state of the whole  produce department on the quality of the bananas for sale and any deviation from the norm in terms of volume, ripening stage, shelf life or size will lead to pretty hefty “Please explain” requests being issued by agitated banana category managers, and depending upon the severity of the deviation, more senior supermarket managers will fairly rapidly become involved as well. An attention level not afforded to Kiwifruit, Avocados and Kiwiberries I might add.

fortune favours the bold

I am sure Countdown doesn’t think that step is all that small.  Although Countdown has started to diversify its banana offer in recent months, Glassfields was after all started to facilitate the supermarket’s ability to break free from having to purchase bananas from the global brands such as Dole and Bonita and their local supply partners.  Glassfields manages the logistics of getting Countdown’s Gracio bananas (a Sumitomu brand) into the country and into the retailer’s stores.  ’Manages’ as opposed to buying, as Countdown has a direct supply relationship with Sumitomu, as well as with its new Ecuadorian supplier, of course.

So – whilst the whole banana supply scene has become more diversified as the result of advances in  container shipping technology and practices, I would still call it a bold step for a kiwifruit orcharding and post harvest company to leapfrog to banana ripener and distributor status in its quest to grow, diversify and secure its business. One can only wish Seeka well in their endavour.

By the way, did you  figure out why the story is entitled ‘The Winter’s Tale’?  You might want to check this page. The first paragraph will suffice.

If In Doubt, Chuck It Out?

Bananana_bushI still have waste on my mind. There is a country where 1.4 million bananas are wasted every day – as well as 1.5 million tomatoes.  But let’s stick to bananas. No, it is not us. The country in question has a few more people living in it, 63.23 million to be precise, not counting Channel Islanders. If it were us, in purely numerical terms and all things being equal, a population of 4.5 million inhabitants would then be wasting just under 100,000 bananas a day. A scary thought. And in case you think I might be making the numbers up, here is the link to the Executive Summary of a UK report on Food Waste published in 2012 . Before I let go of this snippet of information, we might want to consider a couple of other related  facts.  New Zealand has the highest banana consumption rate per head of population in the developed world, so we might actually be wasting a few more. Our And – our British cuzzies have  been working actively at reducing food waste since 2007.  That year they chucked out 1.7 million bananas per day. I think we can safely assume that we comfortably hit the 100,000 fruit per day mark, don’t you think? The question is – what are we going to do about it?

And yes, I do know the gentleman in the picture is not British. But he did have this uncanny ability to get right to the nub of an issue when it mattered, so he is the ideal ‘poster boy’ to keep the waste issue front of mind.

Brand Exposure Is Not Always Positive

chiquita I took the photo recently on the main railway station in Munich. I am digging it out again because I have been contemplating the DOLE position vis a vis the Oxfam report on banana plantation ethics. On one hand, here is DOLE trying to position its fruit at the sustainable/ethical/credible end of the supply spectrum. On the other hand, CHIQUITA is busy trying to break out from the produce shelf, aiming its offer direct at the consumer.

There is a common theme here. Both companies have built up considerable brand equity in their brand over the decades. Naturally, when one is in such a position, one can be forgiven for looking for arising commercial advantages. In both cases, it involves a positioning exercise with the consumer. Which approach is more plausible do you think? Saying to commuters, “hey look, you can also trust my brand when it comes to buying quality and healthy fruit, fruit snacks and juices for you to eat on your train journey” – or telling shoppers, “we believe we are good corporate citizens and are prepared to tell you that by way of a label to that effect on each bunch of fruit?”

I don’t actually think a straight comparison is possible…but both efforts would not have been undertaken lightly because no business owner goes and deliberately exposes his brand to unnecessary risk. Any new development or initiative undertaken in companies with a high degree of brand equity will sooner rather than later trigger the question, “Do we fully understand how this possible decision would impact on our brand?”

So at the very least , we need to assume that DOLE has not rushed like a headless chicken into a situation where they issue labels which blatantly provide incorrect information. A more likely scenario is this: DOLE would have over the years invested considerable sums into improving the working environment on the banana farms and through that the living standards of employees. Results would have been measurable, prompting the DOLE marketing department to come up with the label approach. The marketing guys would not have had any qualms about this approach, because they believed the results were visible and the campaign justified.

Unfortunately, the discerning first world consumer with a bend towards sustainability, fair trade, political motivation and a transfer of wealth from developed to developing nations cannot agree that the level of positive changes achieved warrant the label and the campaign. Particularly in New Zealand where three vocal people can represent a pressure group which Government is prone to listen to. On any topic…not just bananas.

Then there is the small matter that the charity crying wolf about DOLE’s label happens to be supporting a competing banana project… where are the ethics in that?

In the meantime, DOLE has done the decent thing and suspended the use of the label.

If my attitude towards marketing managers sounds a bit cynical – I remember a Foodtown marketing manager who had a giant guillotine built for a TV commercial. He parked the monstrosity at the top of the Whangaparoa Peninsula cliffs, and filmed cabbage and other unsuspecting produce being chopped in half and chucked down the cliff onto the beach in an attempt to convince customers that produce prices had been permanently reduced…Needless to say, the campaign was a total flop.

And I will, by the way, read the Oxfam report and comment more in due course.

Turners & Growers – Timeline & Fruit Distributors Ltd

So, where are we at in the lead-up to Easter 2013?  That’s right… The CEO who was not going anywhere, did indeed go off somewhere in search of a new home a short week later.  The talent which had exited Turners & Growers prior to the now exorcised ex-CEO tripping himself up is happily finding new homes across the road at Freshmax and I presume elsewhere.  The Noboa shareholding is wondering whether there will be any more Fyffes banana imports anytime soon  and the staff left in situ are running a book on when the next restructure will occur.  In the meantime it is business as usual at Turners & Growers. Or is it?  I guess, that depends on how one defines this phrase…business as usual.

[Rykers, Leslie Bertram Archibald], 1897-1976 :Turners & Growers Ltd. Auckland city markets [ca 1931].  Alexander Turnbull Library

[Rykers, Leslie Bertram Archibald], 1897-1976 :Turners & Growers Ltd.
Auckland city markets [ca 1931]. Alexander Turnbull Library

 

If one visits the Timeline on the Turners & Growers website, one quickly discovers that, at least in Turners & Grower country, time appears to have stood still between 1959 and 1993.  Nothing happened here, Sir!  Nothing to report… Business as usual.  Business as usual, my foot. Any observer with the rational thought ability of a seven-year old child is able to deduce that a whole bunch of things occurred between 1959 and 1993…and that Turners & Growers must either have been in a deep slumber  a la Snow White after eating her poisoned apple (now here is a thought) or the events of those years must have had such a dramatic impact on the company that the decision was made to simply pretend that those years did not exist!

In order to understand the Turners & Growers of today, one needs to start a little earlier though.  In 1936 to be precise.  That was the year when Michael Joseph Savage, New Zealand’s first Labour Prime Minister won the general election.  He radically started to change the country’s economic drivers.  One of the consequences was the establish of a government import monopoly for fresh fruit, managed by the Ministry of Internal Affairs.This state monopoly stayed in place until 1949 when the incoming National Government decided to set up a company in cooperation with all the produce merchants in the country, for the purpose of managing the importation of tropical fruit from a commercial perspective.  (What does that remind you of by the way… an early version of a State Owned Enterprise by any chance???)  The new company  was called Fruit Distributors Ltd (FDL) The company still exists by the way.

In order to get a feeling for what  happened next, a visit to this very informative page on the Auckland Retail Fruiterers Association website would not go amiss.

What the Fruiterers site does NOT spell out in detail is that Turners & Growers during the 1950s and 1960s became the majority shareholder in FDL through acquiring the key produce merchant companies across the country, all of which had been allocated a shareholding in Fruit Distributors at the outset.  What is not entirely clear today is whether the merchant company acquisitions yielded the shares in FDL by fortuitous happenstance or whether the desire to own FDL drove the competitor buyouts.

…to be continued.