Does this change our commitment to the salad business?
No, Fresh Express will be a very important component to the overall success of the combined company. In the past year we have made significant investments in our manufacturing capabilities, talent, innovation pipeline, Ag Ops, and quality and food safety systems. We are on a glide path to driving our target EBIT margins of 7-8% and this is a key element to our turnaround strategy. We see this business as a critical growth engine for the combined company going forward for the top-line and bottom-line. We are naming Brian Kocher, one of our best experienced executives to lead the business going forward as Chief Operating Officer – Salads & Healthy Snacks.
Here is an important graph from that letter:
Both Chiquita and Fyffes have built great reputations through an unwavering commitment to exceed our customers’ expectations and together we will be able to provide customers with a more diverse product mix and choice. Our supplier operations will benefit from the broadest geographic diversity in the industry, enabling us to better meet your needs for variety, and better insulate the company from weather or other disruptions in any given area. Importantly, we will maintain our brands, all of which are valued by both customers and consumers.
TK: So the brands will continue, apparently. I don’t sense that Chiquita and Fyffes execs are worried about the deal being snagged by regulatory authorities. But the growing Fairtrade movement to increase banana prices won’t like this merger. In the UK, there is an initiative to make banana pricing “fair.” From the bananalink Fairtrade website: