Banana prices appear to be past the 2011 slump that saw four straight months of falling import prices and six straight months of falling retail prices, with stabilizing prices and supplies predicted as 2012 advances.
Even with the low prices, particularly in August and September, bananas remained the No. 5 commodity in the produce aisle in terms of sales, according to the Nielsen Perishables Group, a Chicago-based fresh commodity consulting company. Bananas account for more than 5% of produce sales, according to the company, and prices rebounded in the fourth quarter of 2011.
In fact, during his financial report Feb. 21, Chiquita Brands chairman and chief executive officer Fernando Aguirre said the company had a “much better year in bananas driven by higher pricing and volume in North America and initial recovery in Europe.”
However, supplies in secondary markets and the organic sector were described as very tight earlier in February when Testa Produce, Chicago, and Indianapolis Fruit Co., Indianapolis, issued urgent alerts encouraging customers to stay a couple of days ahead with their orders. Some buyers expected those supplies to remain short through at least the end of March.
“It’s always tight this time of year,” said Mayra Velazquez de Leon, president of Organics Unlimited, San Diego. “But the weather this year in some of the growing regions is making it worse than usual, especially for organics.”
She said by the end of May the supply should be back up.
Scott DiMartini, regional sales manager for Miami-based Turbana Corp., said shortages from some key sourcing areas in Central and South America are expected to combine with healthy consumer demand to increase market pricing. DiMartini said he believes those conditions will continue in both the long and short term in 2012.
At Del Monte Fresh Produce NA, Coral Gables, Fla., though, marketing vice president Dennis Christou is slightly less optimistic. He said he anticipates fluctuating global demand will continue to result in fluctuating prices through 2012.
However, Christou said the biggest challenge in banana marketing doesn’t relate to pricing or supply. It all comes down to shelf space, he said.
“Bananas are constantly competing with new produce varieties,” Christou said. “Because bananas are such a staple item, our challenge is to continuously remind consumers that bananas can be a fresh and exciting product.”
That challenge is a tough one, but not insurmountable, said Bill Sheridan, executive vice president of sales for Banacol Marketing Group, Coral Gables.
“Bananas continue to be the greatest value within the (produce) department and sales can continue to grow,” Sheridan said. “But we must provide consumers with the nutritional values of this product and not reduce prices to stimulate sales.”