Chiquita Brands International apparently is exiting the deciduous business — starting with grapes when California’s season ends.
The decision, coming on the heels of the early October hire of Edward Lonergan as Chiquita’s new president and chief executive officer, is designed to raise profits, according to an e-mail from Tiffany Breaux, spokeswoman for the Charlotte, N.C.-based company.
“While the deciduous business has been a part of the company’s vision to expand its reach and impact, the transition is necessary to align efforts focusing on the core business,” according to Breaux’s statement.
She gave no details on volume or commodities affected by the change. She said in the statement that Chiquita “has other ongoing business” in Chile, Mexico and California which are not affected by the latest move, which Breaux called “specific to the U.S. and Canadian commercial markets.”
Chiquita’s consumer website highlights only bananas, pineapples, Chiquita Bites (baby carrots, cut pineapple and sliced apples), Super Crunchy Fruit Chips (dried banana, pineapple and mango) and Fresh Express salads. Chiquita has annual revenue of more than $3 billion and employs more than 21,000 people in 70 countries, according to the company’s website.
One California grape source, speaking on condition of anonymity, speculated that Chiquita’s grape volume in the state was less than 1 million cartons, and perhaps between 500,000 to 700,000 cartons annually. The source said he had been told that Chiquita was also exiting the Chilean and Mexican grape deals. He was not aware of Chiquita being a significant player in any other California deciduous commodities.
Statistics from Philadelphia-based Sermaco Inc. shows that Chiquita imported just over 900,000 cartons of grapes and stone fruit from Chile in 2011-12, up from 881,000 cartons in 2010-11 but sharply lower than 2.61 million cartons in 2009-10. Chiquita said in its latest quarterly report that it had previously advanced $32 million to a fruit grower in Chile who declared bankruptcy in late 2011. The company said it continues to seek recovery of the funds with the bankruptcy trustee,
The latest move is the latest in a series of decisions by the multi-national to concentrate on its core banana and salad business.
In 2010, Chiquita halted melon sales and earlier this year the banana company said it was exiting the California avocado business.
In its annual report released in late February, Chiquita indicated that sales of fresh produce other than bananas — mostly pineapples, grapes and avocados — have been falling in recent years. Sales of the “other produce” segment were $163 million in 2011, down from $261 million in 2010 and $253 million in 2010. Chiquita’s banana sales, at $2 billion, amounted to 64% of sales in 2011, up from 60% in 2010, according to Chiquita’s annual report.
In the company’s most recent quarterly report, Chiquita said sales of other produce were $84 million in the six months ending June 30, down 23% from the corresponding figure a year ago.
Sales of “other produce” saddled the company with an operating loss of $9.4 million for the six months ending June 30, according to the company’s quarterly report.