Originally printed in the September 2018 issue of Produce Business.
Consumers reach for taste, healthy benefits in tree fruit.
One fruit making its mark in the organic market is the beloved banana.
“Clearly, industry stats prove organic is no longer just a trend,” says Bil Goldfield, director of corporate communications for Dole Food Company, headquartered in Westlake Village, CA. “Organic sales in the United States have reached record levels in recent years and industry data indicates organic foods will continue to play a major role in many consumers’ diets.”
Goldfield adds Dole is seeing increased demand for its organic bananas, both from retailers and customers.
“I think the No. 1 reason for the growth is shoppers want a choice,” he says. “Overall, the population today is increasingly food-conscious and aware, and people simply want options in their eating. Although Dole instills good agricultural practices in all our growing operations — conventional and organic — there is a perception for those more concerned with knowing how the food they eat is made, grown or processed and its footprint on the environment.”
Fulfilling The Demand
Dionysios Christou, vice president of marketing for Del Monte Fresh Produce, based in Coral Gables, FL, says the company has been successfully growing and selling organic bananas for more than 10 years, and they are among the company’s most popular organic fruits.
“As consumers seek healthy and nutritious food, the demand for organic food, especially fruits and vegetables, is also rapidly increasing,” says Christou. “Consumers are becoming more health-conscious and want the perceived benefits associated with consuming organic products.”
Goldfield notes Dole started its organic program more than 20 years ago, and that it is the largest grower and distributor of premium organic bananas in the United States.
“Our organic production and diverse sourcing network have allowed us to keep up with the increasing demand for organic bananas in recent years,” he says.
Mayra Velazquez de León is president and chief executive of Organics Unlimited, headquartered in San Diego. The family-owned company works completely in organics and has four generations’ experience worth of growing organic bananas.
“We’ve done it this way because it tastes the best, but it’s also safer for our workers and the communities where we grow our organic bananas because we never use chemical pesticides in the growing process,” says Velazquez de León. “Our bananas are also the freshest. In fact, we harvest at the time of order. Our organic bananas come primarily from our farms in Colima, Mexico, and are supplemented in the winter by our organic bananas grown in Ecuador.”
She stresses organic bananas have long been popular because of their convenience and nutritional value, and they are growing in popularity.
“In fact, one of the biggest challenges organic banana growers face is keeping up with demand,” says Velazquez de León.
Jamie Postell, director of sales North America for Chiquita, headquartered in Fort Lauderdale, FL, says the company offers a variety of bananas, including conventional, plantains, mini, Manzanos and organic.
“Our research has revealed each type meets different demands of what consumers want, and has its own unique proposition,” says Postell.
He says sales of organics have been growing over the years and now represent 9.5 percent value share of the total banana category. He cites a report by Nielsen Perishables Group showing between 2011 and 2017, organic bananas grew dollar sales at a compounded annual rate of 23.5 percent.
“The growth in organic bananas is mainly driven by increased distribution in response to consumer demand and their interest in transparency across the supply chain process, and free-form products,” he says. “Chiquita’s sustainable efforts — from farming to supply chain — put the company in a strong sourcing position; providing our retail partners with the highest-quality fruit and service to support organic bananas’ emerging demand.”
Justin Heffernan, vice president of sales for Fyffes North America, headquartered in Coral Gables, FL, says, “Despite the increase in price compared to conventional bananas, each year more and more consumers are buying organic bananas.”
Bananas’ Place In Organic
This high demand has resulted in big efforts and investments in order to provide consumers with the organic produce they want.
According to Postell, a study by the Organic Trade Association shows organic produce brings in $16.5 billion in sales, and that it continued to grow at 5.3 percent in 2017. Organic bananas are responsible for 1 percent of organic produce sales.
So how far will customers go to get their organic goodies?
“A recent Nielsen study showed the organic produce shopper demands a variety of organic fruits and vegetables,” says Postell. “The organic shopper is most likely to leave a retailer to purchase organic produce in another store if the only variety available is conventional. This is particularly strong for categories such as oranges and potatoes.”
However, he notes, that’s not the case with organic bananas, as 80 percent of shoppers surveyed said they would buy conventional bananas if organics weren’t available at that particular retailer.
“On the flipside, if conventional bananas are not available, 60 percent of shoppers won’t switch to organics,” says Postell. “This demonstrates that both organics and conventional bananas have a role on the shelves.”
But some retailers are seeing big demand for organic bananas. Steve Carlton, produce category manager for Natural Food Markets, headquartered in Lakewood, CO, says organic bananas are extremely popular with customers.
“They are the No. 1 or 2 item we sell, exchanging that position back and forth with avocados,” he says. “They really promote themselves but we help by locating them in most stores facing the front entrance of the department.”
Looking for consistency
Robert Adams, president of ONE the Better Banana Co., based in Coral Gables, FL, says retailers want a consistent supply of certified, high-quality fruit, and his company fulfilled the demand by investing in a new farm in Peru more than three years ago. That process involved building a completely new farm, including a reservoir for irrigation, as opposed to converting an existing farm.
“One Banana is known for supplying the highest-quality, sustainably-grown bananas to our retail and wholesale partners, so it was important to be able to consistently provide the same high quality and standards on our organic bananas as well,” he says. “Our new farm is 300 hectares and is fully certified and able to supply fruit to the United States, Canada and Europe.”
Goldfield says Dole’s organic banana production is diversified and the company has taken measures to make sure sourcing for organics keeps up with the growth in demand.
“Our experienced operations teams successfully managed great challenges in developing a long-term growing plan that takes into account not only land, but several other limitations on organic production,” he says, adding the conversion of a conventional farm to organic takes at least three years, and Dole has met demand by developing new sources for organic bananas over the years.
“Organic bananas need to be grown in areas where the pressure from pest and diseases is low due to the limited options to fight them,” he says. “These growing conditions cannot be met in many of the traditional banana growing areas because of high temperature and rainfall. Although Dole is the leader in organic banana agriculture, we still learn new things, and we are applying the best practices we learn in organics across our conventional product practices as well.”
Packaging Organic Bananas
Christou notes Del Monte’s line of organic banana products comes in 4-pound boxes similar to its other banana products and include Organic Naked, Organic Banded, Organic 2-Pound Banded, Organic Bagged and Organic 3-Pound Bagged packaging.
Ecuador, Mexico and Colombia are among the countries where Del Monte sources its organic bananas, says Christou.
“Most organic bananas do not produce the same yield as conventional bananas, therefore they require more natural resources such as water/irrigation and more land,” he says. “We find producing organic bananas requires between 40 to 60 percent more land and water as it would to produce an equal volume of conventional bananas.”
Additionally, as a vertically integrated company, Del Monte can control the quality of its bananas from the production process to delivery to the retailer’s distribution center.
“This allows us to ensure storage and ripening facilities throughout the chain follow proper organic handling protocol to maintain the segregation and integrity of organically produced goods,” Christou says.
An Affordable Fruit
Christou notes low cost contributes to the popularity of bananas, and retailers determine the price of organic bananas in their stores, with demand and volume being two key factors in determining what customers pay for their organic bananas.
“Pricing should reflect the true value of the product and true sociodemographic makeup of the store,” he says. “It is safe to say, however, bananas remain by far the cheapest healthy snacking option for consumers in North America. Organic bananas cost more to produce, so the price sold to retailers is higher than conventional. Consumers who are health-conscious and value the perceived benefits of organic products seek nutritious food options and are willing to pay a higher price for organic products.”
Goldfield says pricing for organic bananas is influenced by the same factors as other produce, including weather conditions that affect supply, labor, inputs and transportation costs.
“Since the beginning of this year, organic bananas throughout the industry have been priced about 25 percent to 30 percent higher than conventional bananas on average,” he says.
Chiquita’s Postell says pricing bananas is pretty inelastic, and the best way to sell more organic bananas is through an integrated promotional strategy.
“It starts with the right everyday price point and the use of the different promotional tools to maximize volume lift, depth of discount, seasonality, frequency, ad length, product mix and secondary placements,” he says. “A key component of the organic banana price is having a healthy everyday price point on conventional bananas. Balancing price positioning between conventional and organic bananas is essential to maximize category revenue, supporting the right value proposition to attract each shopper group.”
According to Postell, different types of bananas have their own characteristics and appeal to different shoppers, and organics are of interest to shoppers in the higher income bracket, making them less price sensitive.
“Look beyond lowering prices to drive sales, since this is an emerging segment,” says Postell. “Implementing dual tactics can be more effective to better serve the distinct shopper profiles between the conventional and organic banana shoppers.”
Beyond The Peel
One hurdle to promoting organic bananas is their thick skin, which Velazquez de León says often leads to a misconception that conventional bananas are the same as organic.
“However, in conventional farming, the chemicals used leech into the soil, which means they make their way to the inside of the banana,” says Velazquez de León. “Studies have shown organic produce is healthier, and it is also better for the environment as you do not get the chemical runoff into water sources.”
She notes the best steps retailers can take in marketing organic bananas is by educating customers on their health benefits and the fact they’re environmentally safe.
“More and more people want to know where their produce comes from and how it was grown. Consumers also care about social responsibility,” says Velazquez de León of Organics Unlimited, which gives back to communities through its GROW program that provides health clinics, dental and vision care, education and scholarships to the needy.
Adds Fyffes’ Heffernan: “Regardless of where merchandised, the most important thing is calling out organic bananas via signage, keeping a full display of good product at all times, and maintaining a reasonable price gap between conventional and organics that promotes a trade-up strategy.”
Spreading The Word
Goldfield says marketing organic produce, including bananas, begins long before customers arrive in the produce section.
“Consumers have traditionally placed a ‘health halo’ on organic produce, but what the organic shopper is looking for the most is authenticity and transparency in their food choices,” he says, noting Dole shares information about its products, including organic bananas, on its website, www.doleorganic.com and through a Facebook presence devoted to its organic produce.
“Through this, we try to provide a greater understanding about how and why we believe in organic farming. The experience also gives visitors the opportunity to enter farm codes and get specific data on where and how their particular organic fruit was grown.”
Goldfield says retailers are offering a wider range of organic fruits and vegetables, and more and more retailers are devoting more in-store real estate to organic produce.
“Within the produce section, Dole supports retailers with specific programs to help drive organic sales, including turnkey promotional programs as well as the customized components to ensure success,” says Goldfield, noting these include recipes, point-sale materials, in-store posters and support.
“We’re committed to making it easy for retailers to give their consumers more of what they love,” he says.
According to Del Monte’s Christou, retailers can sell more organic bananas through tactics including “eye-catching” promotional items and merchandising measures that appeal to consumers while also educating them of the benefits of organic bananas.
“This might include development of seasonal POS for shelves, improved labeling information about the product nutrition and convenience and displays close to the checkout and entrance of the store,” he says. “Strategically placing secondary displays in areas such as the cereal aisle will also help increase banana sales.”
Shelf Life And Being Green
One of the most important factors in showcasing bananas is visual appeal, and shelf life plays into that.
“The shelf life of organic bananas is similar to conventional varieties,” says Bil Goldfield, director of corporate communications for Dole Food Company, Westlake Village, CA. “The biggest impact on shelf life is how and where the bananas are handled and stored before and after purchase. Bananas are delicate and extremely sensitive to temperature and handling. Bananas will quickly ripen in warm, humid conditions.”
The quality of bananas on display is one of the most important factors in terms of sales, Jamie Postell, director of sales North America for Chiquita, says adding color and quality are more important than pricing.
“There is a distinction between green life and shelf life,” he says. “Green life is defined from the moment the fruit is harvested to when it is turning naturally yellow, without going through the ripening process. At this point, the life of organic bananas versus conventional bananas has a difference between eight to 12 days. This can vary due to agronomical conditions, and the presence of rots and molds.”
Furthermore, Postell notes Chiquita’s organic bananas are transported under controlled conditions in order to maintain the integrity of the fruit and maximize their shelf life.
“The shelf life is counted from the moment the fruit is taken from the ripening chamber to when it reaches sugar spots,” he says. “There is no shelf life difference between the conventional and organic bananas when ripened green.”
