Andrew Biles:

“We need to work together to protect the Cavendish”

In 2014, Brazil's Cutrale Safra bought the American banana giant Chiquita. The multinational thus ended up in private hands. Andrew Biles was appointed by the new owner as CEO and President of the company. With him, we look back on the years since the acquisition and the challenges that the sector is facing, including, for example, that of TR4.

What has changed since the takeover by Cutrale Safra?

"Chiquita was removed from the public domain and came into private hands. As a result, we now have shareholders who understand the business, because they have personal experience with the cultivation and logistics of citrus. We can set out a strategy for the long term, and also carry it out in a simpler way, because shareholders look more at the long term. That is not only good for business, but also for the entire sector."

Since the takeover, the European branches have all fallen under Chiquita Europe. Why have they been merged?
"That has to do with several factors, including changes in legislation in Europe, such as the tax laws. It is also an efficient way to work, and customers expect us to operate as efficiently as possible. It also has advantages, for example, for the ICT. It is not something that exceptional. Many large pan-European companies have their offices merged. It's a natural development."

What is Chiquita's position in the sector?

"I see our firm as one of the leading companies. We are still one of the largest exporters, but in total only a small share of the global production is intended for export. India and Brazil are the largest banana producers, but they hardly export. Their bananas are sold in the domestic market. Moreover, bananas are an essential food item in many countries. "



But there are also many challenges for the sector, if we look for example at the Panama Disease.

"The banana sector has challenges just like any other agricultural sector. Incidentally, I do not like the name Panama Disease; why do we need to link the disease to a country? And the disease has not hit Panama yet. I prefer talking about TR4. It is a serious threat to the sector and a problem we need to tackle, and Chiquita now wants to play a leading role in this regard. We are working together with, for example, the FAO and the World Banana Forum in order to take appropriate preventive measures before the disease strikes. At Chiquita, we aim to become a catalyst in this process."



What is being done to tackle TR4?

"A task force has been set up to try leading the industry into adopting any measures necessary to tackle sector-wide challenges. TR4 is one of them. That Chiquita wants to play a leading role in this is part of the company’s long term strategy. Whatever we achieve as regards TR4, both in terms of prevention and in new varieties, we want to make available to the whole sector. That is what we consider good citizenship. All measures must be available to the entire sector. We cannot sit and watch other companies get stricken by TR4; we have to protect the Cavendish together. We believe that we, as a sector, must work together to find a solution."



Will we still be able to buy bananas in the supermarket in ten years?

"I don’t think bananas will disappear in ten years. I am optimistic. There are several initiatives to find a solution, but finding solutions requires a great co-ordinated effort. Chiquita is ready to do its part and bring the sector together to find short- and medium-term solutions. At Fruit Logistica, I have talked with several CEOs of other banana companies regarding this issue."

In the Netherlands and other countries bananas are offered at low prices in the supermarket. Have you noticed that?

"The low prices are primarily a strategy from retailers; however, we see that the demand for bananas is fairly inelastic, which means that selling them for a lower price doesn’t necessarily entail better sales, and selling them for a more expensive price doesn’t necessarily result in lower sales. Furthermore, the EU aims to encourage competitive pricing to ensure attractive prices for consumers. We play our role in this and we try to minimise the costs for each product. In this regard, efficiency in the supply chain is important."



Retailers are also relying more on direct, private imports. Will there still be a role for multinationals like Chiquita?
"Healthy competition is a good thing. Direct sourcing has always been an option and it is up to the major players in the sector to market the products in the most proper way. That may be done under either a private label or the retailer’s own label. We see that the Chiquita label is much more than a label. The story behind the brand also matters. What is going on in the producing countries? What does the supply chain look like? And is it sustainable? How do you deal with the employees? As a large firm, you can get things done that others cannot. Moreover, we can source from different countries."

One of the topics you mention is the working conditions. In recent years, Chiquita has also addressed such matters. What's up with that?
"We seek to work proactively for our growers and workers. There are always some issues at play, but we aim to resolve them before they escalate to, for example, strikes. Our HR director, for instance, is also responsible for sustainability. That shows that this is really part of our strategy. A company is only as good as the people who work in it. We want to continue standing by that idea. We are committed, for example, to women's rights and social issues. To this end, we work closely with the IUF. We pay more than the minimum wage and the majority of our employees are members of a trade union."



In recent years, Chiquita has chosen to ship the bananas via Vlissingen and not via Antwerp and Bremerhaven. What was the reason?
"Vlissingen is an efficient and effective port. They offer a good service at an attractive price. Chiquita uses many ports and from time to time we make changes."

Did the transit time play a role? For example, reaching Antwerp from the North Sea takes seven hours more than Vlissingen.
"That could be an aspect, but with a journey time of two weeks from Latin America to Europe, seven hours more or less doesn’t really matter."



Lastly, Fyffes has been taken over by Japan's Sumitomo. Will that affect the market?
"The effect of this will be limited. Fyffes is now part of a group and I think that's positive. That will turn out well for the long-term strategy. For us, it doesn’t make much of a difference. We were satisfied with the situation as it was and we are happy with the new situation. It's not better or worse."

More information:
www.chiquita.com

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