Ecuador’s Favorita Fruit plans expansion into U.S. banana scene

With the help of an experienced North American banana industry leader, the Ecuadorian banana company Favorita is looking to expand in the U.S. market.

Dennis Christou, previously an executive with both Chiquita and Fresh Del Monte Produce Co., is now director of Favorita USA Corp. Christou has joined the company to help build business with U.S. retailers.

Vicente Wong, general manager of Favorita Fruit Co., attended the United Fresh Produce Association’s Washington Conference in late September with Christou to talk about the company’s vision.

Favorita was established in 1977 under founder Segundo Wong Mayorga, who began by selling to the Russian and Chinese markets, which were then under-served.

Vicente Wong said the company has diversified since that time. It started as more of a banana trading firm, but now derives most of its volume from its own growing operations.

Currently, the company has more than 17,000 acres of its own production.

“We produce approximately 20 million boxes a year (from our own land) and then we also have an independent sourcing operation that we have with our long-term growers that we buy approximately 9 million boxes per year,” he said.

The company markets in four continents, with its biggest markets being Russia, Europe, the Middle East and Asia.

Subsidiary companies in Asia, Europe and now the U.S. handle the logistics, import, distribution and even ripening of fruit sold to retailers, he said.

“We have been building custom fit solutions for different retailers,” Wong said, noting that the attraction for retailers is complete visibility of Favorita’s supply chain, from the fruit’s origin until the distribution center.

“That has been basically the value proposition of our company — to build a kind of boutique solution on developing these very specific programs (for retailers).”

Wong said Favorita can offer packaging options, private-label options and social and environmental certifications/programs.

Wong said the business evolution of Favorita Fruit Co. started with serving emerging markets in Asia and eastern Europe. Later, the company transitioned to be a supplier and exporter for multinational banana companies.

In the early 2000s, Wong said the company found a way to build programs that added value to retailers by incorporating different social and environmental programs into its production and supply chain.

“We dedicated specific farms for specific programs, and in (those) farms, our customers know A to Z what we do, what kind of certifications we have, what kinds of programs we have in terms of production, and also the social benefits for our workers,” he said.

The company gives retail customers more transparency in their procurement of bananas, Wong said.

Christou said that Favorita has always been in the forefront of sustainability.

“I’ve known them from my previous roles, and they always been early adopters of various certifications, sustainability programs, like the Rainforest Alliance and others, and they just certified their farms as carbon neutral,” Christou said.

“And (Favorita) is one of the early adopters of living wage research and analysis and we’re getting certified on that.”

Christou said the company approaches customers in a way to make sure they get value, even though it is not a well-known brand.

“It is the value of the product and the company that they deal with, rather than the individual brand,” he said.

Wong said that what Favorita offers is a value proposition that highlights environmental and social transparency of the company in the supply chain.

“We have worked with all the major European retailers,” Wong said. “They have their own certification standards, and we are always open and flexible to adapt.”

The company has grown its business in Europe and Asia, as the logistics of shipping from Ecuador make Favorita very competitive with other major players.

In the U.S. market, Ecuador is not as economically competitive compared with Central American regions, and Central America is controlled by the big banana companies.

“It is definitely a big challenge for us, but I think that in other categories we can be competitive, such as organic and organic Fairtrade,” Wong said.

Even with conventional bananas, Wong said Favorita will compete in the U.S. market with some ports of entry on the West Coast and in the Southeast.

“This is not a sprint, it is a marathon, and we are going step by step,” he said, noting the track record of the company’s growth in Europe in the three years since it established a subsidiary there.

“We started with two, three containers per week (in Europe), and right now we’re getting to 100 containers every week into that operation,” Wong said.

Christou said what Favorita has done in Europe can be replicated in the U.S.

“We have proof that the model works in Europe,” he said. “We have established our credentials and proven that we are reliable suppliers with retailers in Holland, Belgium, Germany and Scandinavia.”

Some of those retail chains are present in the U.S. as well.

“We’re slowly starting to establish programs with customers here and we can work with them to give them what they need,” Christou said.

The company has registered its operations in Florida and has acquired a Perishable Agricultural Commodities Act license, Christou said. Now it is establishing its network of logistics and ripening capabilities.

Christou said Favorita has already begun talks with various retailers and potential customers in the U.S.

“Our focus is becoming a reliable supplier, not necessarily establishing our brand as a consumer-facing brand,” he said, noting that private-label capability is a strength for Favorita.