Sales are strong
Mexican banana still reporting good yields
Banana sales remain strong heading into December. Normally at this time of year the production of bananas in the tropics begins to slow down due to shorter days and cooler evenings, Philip Cuccerre of Le Best Banana says. “Almost all of our farms production are still reporting good yields and good stem ratio but volume is down.” Based on demand within the US and internationally he anticipates pricing to increase very shortly and very quickly on the open market both in the US and in Mexico.
Le Best Banana’s brand name is Carmelita. The company is proud that just this month they are now the first grower in Chiapas, Mexico to receive certification from the Rainforest Alliance. Their other farms will be completed in early 2018. The company is able to have fruit reach the US within three to four days of harvest.
Ecommerce and European retailer impact
Ecommerce and foreign stores opening in the US weighs on Cuccerre’s mind as much as it likely does others in the industry. Remaining applicable to retailers looking to purchase directly from Le Best Banana directly can help retailers cut out labels that drive costs. Ecommerce companies within the country and also European retailers are putting pressure on US companies. “We believe we bring a different dynamic to the arena by allowing retailers to purchase directly via our label or if they wish, to do a private label.”
Le Best Banana’s sales were up 33 per cent from last year and Cuccerre says they’re continuing to look at further growth to combat the new aggressive retail expansion. “And out of all the commodities it looks like they’re focusing on bananas being the least expensive item in the store,” he notes. Companies such as the new presence of LIDL and aggressive campaign from companies like Amazon taking over Whole Foods is what’s putting pressure on retailers, believes Cuccerre. “Each year it’s been a very interesting career. We might be dealing with bananas but it’s a commodity that consumers like and the retailers know they have a lot of leverage with that one commodity so they use it out front.”
Customer conversion is the question
Although he attributes people’s busy lives as a major factor in accessing the convenience shopping of ordering produce online and either having it delivered or picking it up in the store he still remains old-fashioned about the process. There’s a factor that some customers may take time getting comfortable with – which is letting someone else select the fruit or vegetables for you, and from what he’s heard in talking to some of his retailers, is that policies are quite strict on quality. “Do I believe ecommerce is going to continue to grow? Yes.”
Moving into the New Year
Many of Le Best Banana contracts will start coming into the renewal phase over the next few weeks, and Cuccerre says they’ll continue to expand westward. Presence is currently in the southwest as well as Chicago – also Canadian Retailers are reviewing our logistics and post harvest green-life that can provide value to their programs. Something that also helps reduce or remove cost of goods is Mexico’s rise in stature and its contention as a player in the banana market versus other growers he says have been categorized as only having the best fruit. “We can compete if not exceed the quality from Honduras and Guatemala that have been stereotyped over the years as the only providers. It’s an educational turning point for retailers and consumers. I believe Mexico will continue to develop this category.”
For more information:
Le Best Banana Supply Co
Publication date: 12/4/2017
Author: Rebecca D Dumais
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