US: Chiquita pulls out of avocados
In 2010, the famed banana brand backed local investors in their pursuit of buying Harvest Time Produce Inc. in Oceanside from long-time packinghouse owner John Schmidt. He sold the firm to two outside investors working closely with Chiquita who intended to increase the producer's purchase of locally grown avocados.
Chiquita is exiting the western US market because of a rise in imports from Mexico and Peru, combined with a bad year in avocado production.
In a March 26 memo signed by Heath Osburn, director of Chiquita Marketing & Insights, and distributed to vendors and suppliers, Chiquita said that it would be "transitioning out of the Chiquita Fresh & Ready avocado business."
"While this product has delivered measurable increases in sales growth as a result of the ripe and ready to eat benefits, this transition is necessary to allow Chiquita to focus on core businesses where existing scale will allow us to drive the strongest results."
He further said there would be "significant investments" in core categories for growth, specifically in bananas, salads and apples.
The Cincinnati-based company, with the help of Harvest Time, was to package avocados with its "Fresh & Ready" process, which uses a stay-fresh technology developed with Menlo Park-based Landec Corp. The process packages fruit in a bag made of a "breathable membrane" that adds shelf life to fruit. The membrane allows oxygen to pass through while also controlling the flow of carbon dioxide to delay ripening.
According to Chiquita, the $394 million market capitalization company a year ago was seeing double-digit sales increases with substantially lower spoilage than conventional avocados sold without the packaging. East Coast and Canadian supermarket chains were seen as sales targets.
Demos, one of the new owners of Harvest Time, declined to comment on the Chiquita announcement and how it might affect his company's three-year contract with the banana producer, instead referring questions to Chiquita.
Source: www.hispanicbusiness.com
