CLARIFICATION: Chiquita confident turnaround will continue - The Packer

CLARIFICATION: Chiquita confident turnaround will continue

11/07/2013 03:18:00 PM
Coral Beach

Ed Lonergan marked his first year at the helm of Chiquita International Brands October.Chiquita Brands International Inc. reported operating income of $2 million for the third quarter this year, compared with a $17 million loss in the third quarter in 2012.

Ed Lonergan, president and chief executive officer for the Charlotte, N.C.-based company, and other Chiquita officials discussed the third quarter financial report with stockholders and media Nov. 7.

They reported a net loss of $18 million for the quarter, but said they are pleased with that number when it’s compared to the $67 million net loss in the third quarter of 2012.

For the second consecutive quarter the banana giant reported good news from its packaged salads operations.

“For the first time since 2007, we are leading retail value-added salad category growth,” Lonergan said.

“In Q3, we grew retail value-added salads volumes 7.5% year over year driven by improved velocity at existing customers and new customer acquisitions in both branded and private label products.”

Private labels make up about 60% of the 4 million case increase in Chiquita's bagged salad business, Lonergan said. About 20% of the company’s total salad business is in the foodservice sector with the remaining 80% in retail.

ChiquitaCoral BeachAt Fresh Summit 2013, Ed Loyd, director of corporate communications, showed one of Chiquita's new Gourmet Café salad kits. The special clamshell keeps ingredients separate to help them retain full flavor and freshness. Lonergan said Chiquita added more salad stock keeping units in 2013 than in the previous three years combined.

Many of those products just hit retailer shelves this fall, giving Chiquita officials confidence that more volume growth is in their future.

“Those products include kale, chopped salad kits and salad bags with two conjoined packs so consumers can open one and keep the other as fresh as possible until they need it,” Lonergan said.

He said additional salad product launches are set for the first half of 2014.

When Lonergan succeeded Chiquita’s former CEO Fernando Aguirre in October 2012, he joined a company that had posted a 92% drop in profits for the second quarter, compared to its 2011 quarterly report.

The company’s stock value had been falling for a year when Lonergan was hired and Chiquita had logged four straight quarters of declining revenue. Net income for the second quarter of 2012 was $2 million, compared with $78 million in the second quarter of 2011.

Lonergan, who is described by produce industry analyst Dick Spezzano as a “turnaround specialist” announced Chiquita would return to its core businesses and strategies, a 180-degree change from Aguirre’s nine years of work to diversify the company.

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