Franklin Ginus, CEO Chiquita Benelux:
"Chiquita goes back to core business"
Q: In recent years, Chiquita has done some significant refurbishing in the Benelux countries.
A: Franklin: "That’s right. But not just in the Benelux. We have implemented a global reorganization in 2012, nearly 2.5 years ago. We have divided Europe into two regions: North and South. In addition to bananas, we also distribute pineapples and melons. In Antwerp, we now have nine people - the Fresh Select team – working on the distribution of pineapples and melons in Northern Europe."
How has Chiquita evolved over the years?
George: "Chiquita has actively invested in its social and economic responsibilities over the past twenty years. We’ve developed a program for Corporate Social Responsibility (CSR). For example, we have been working with the Rainforest Alliance since 1992. To us, the proper treatment of people and the environment is paramount, and collaboration with the Rainforest Alliance should be seen in that light. In addition, our plantations are certified according to SA 8000 - founded on the principles of international human rights. Down the years, we’ve struck many partnerships with organizations like COLSIBA, but also with other companies and research institutions. This is not only good for the environment and our employees, but it also increases our ability to be successful in a competitive market."
Which values does Chiquita deem important?
George: "Throughout the years, sustainability has been firmly integrated in our supply chain. We participate in various projects, such as water programs and projects to reduce emissions. But we also work with local communities to sustain or bring back biodiversity in the area. These individual projects we want to keep developing, because progress in this field can always be made.
We also want to involve our employees in the business. CSR often has a top-to-bottom kind of structure, with the boss saying something and the staff carrying it out. But that's not what we want. We want our employees and partners to express their opinions. Providing information is very important. In most cases, the employees are the last ones to find out what’s going on in a large corporation. With us, they can simply read the reports. To increase involvement, we have an annual volunteer day for our personnel, which is a great success. It all comes down to communication, information and participation. That adds a lot of value and creates enthusiasm."
What are your main markets?
George: "The European and North American markets are still our chief export destinations. In those two key markets, we try to provide the best quality and service and maintain a strong presence. Of course, there are alternate opportunities in countries like Turkey and Iraq, but these aren’t easy places to do business in. If the opportunity arises, we’ll probably go for it. But again, Europe and America represent the cardinal shipping destinations."
In what way do you make a profit?
Franklin: "It’s still possible, but difficult. We work with a wide range of local producers and seek opportunities to expand the market. The key for us is to always be a grower and distributor and remain a reliable partner that knows the ins and outs. One of the reasons why we have such a long relationship with suppliers, is that we show that we are a vibrant, leading company with a positive impact on others. But we also know that we’re working a market where prices are under constant pressure."
How is the market share of Chiquita bananas in the Benelux?
Franklin: "Our market share in the Benelux has remained fairly stable over the last decade. For both regions, we are at around 35 to 40%. In Belgium it will be about 35% to 36%; in the Netherlands, 38%.
We want to become a full-category supplier for all our strategic customers in the Benelux and in fact the world. That means being able to deliver a complete portfolio of banana products. The idea is to have a three-step strategy in terms of prices. For example, we provide kilo bags, but also mini-bananas, kids bananas, family bags, Chiquita to go, and so on."
Is that the future, going for the entire chain?
Franklin: "You have to come up with solid programs with retailers regarding quality and availability. Obviously we have a strategy where we have multiple companies in several countries. In case of any trouble, we can easily shop in other countries. But we still need to be alert at all times. So yes, ultimately it’s the future to be a full-category supplier. Because availability is crucial. The moment you can prove that you have covered everything from A to Z, you have earned a place in that future."
In what way do you mean to implement this strategy?
Michelle: "We're going back to our roots, back to what we are good at. And that’s supplying bananas. To that end, we have waived the sales and marketing activities relating to fresh fruit smoothies and salads. At the same time, the focus will always be on maintaining and strengthening the brand."
Earlier, Franklin mentioned store presentation as part of the marketing process.
Michelle: "Yes. Bananas are, at least 50% of the time, an impulse purchase. To improve the presentation in stores, we have invested heavily in trade marketing. For example, we’re currently testing new supermarket displays to see how we can optimize shelf presentation. If you really focus on proper display, sales increase significantly, sometimes with as much as 8 to 10%.
We also teach entrepreneurs to enhance shelf presentation. Items should have the correct colour, not be stacked in a disorderly fashion, and show off their quality. If things look messy, consumers will bypass your display and reach for something else.
Chiquita has a strong name when it comes to bananas. Why not in pineapples and melons?
Franklin: "A few years ago we tried to pay extra attention to pineapple through communication and marketing. But to seriously invest in pineapple, making it a household name with brand recognition, you need to inject millions. The Chiquita banana didn’t arrive overnight, we’ve been marketing it since 1966. So we won’t be going all-out on pineapples any time soon. Like I said, focus is on the core business now.”
But you have shareholders who want to see growth.
Franklin: "Sure. But the expansion of our product range with items such as smoothies and salads has not brought us much. The banana category has proven its worth time and again, making it a solid pillar for future strategy. I think our goal of becoming a full-category supplier reflects that sentiment, and I believe the stakeholders are on board. Retailers today are very demanding in terms of quality, sustainability and so on. And our strength is that we supply 99.9% of our volume year-round."
What do you consider the biggest threat for Chiquita Benelux?
Franklin: "I think three things are important. Firstly, there should be more cooperation between retailers and importers in respect of diseases and pests. Secondly, I think independent importing by retailers signifies a big threat. Not only for the banana industry, but also for the retailer himself. Think of floods, strikes, you name it.
I also think we should try to increase consumption of bananas. Not just in relation to volume, but also in terms of frequency. There are today very few retailers who invest in consumer behaviour. The focus is more on store action and lower prices. Right now, we’re increasingly working with retailers to develop programs that not only create more loyalty, but also generate more turnover for our customers."