Press Coverage

Chiquita Takes Aim at Convenience Store Market

Chiquita set to loosen big profits from convenience-store shelves

NPR - April 13, 2007
by Scott Horsley

Chiquita is now offering individual bananas in convenience stores as a way to boost stagnant sales. The company uses a special polymer packaging to keep the bananas ripe and ready-to-eat for up to a week.

Morning Edition, April 9, 2007 · Bananas are getting some new, high-tech packaging.

Of course, bananas already come with pretty good, low-tech packaging of their own. But the new wrapper is a key ingredient in Chiquita's effort to unlock new markets, such as convenience stores.

At an ampm mini-mart in San Diego, sandwiched between the Icee dispenser and the cinnamon rolls, sits an inviting pile of ripe, yellow, individual bananas. Sales are steady, both a.m. and p.m.

"All through the day," says clerk Chena Poe. "We get two cases. And they'll be gone within a week."

That's good news for Chiquita, which is facing a challenge common to big, mature companies: how to boost stagnant sales when demand appears to have maxed out. Chiquita sold nearly 2.3 billion pounds of bananas in North America last year, nearly all of them in bunches at the grocery store. If the company wants to sell even more bananas, it has to break out of the produce aisle.

"Our consumer research told us many consumers would buy more bananas if they were available in different locations at different times of day," says spokesman Mike Mitchell. "And consumers have told us they'd be willing to pay prices that are comparable to what a candy bar would cost."

Chiquita sells the individual bananas at candy bar prices: 75 to 99 cents. That's three to four times what a banana costs in the supermarket, and most of the difference is pure profit. But there's a catch. Unlike grocery store shoppers who will happily buy a bunch of green bananas to eat later in the week, convenience store shoppers want something they can eat right now. Ordinarily, yellow bananas only stay yellow for a couple of days before turning brown. The fruit at ampm will keep its color much longer.

"They'll be like that a week from now," Poe says. "As long as we don't stick them in a refrigerator and keep them in a dry climate, they stay ripe. Perfect."

The secret is a polymer membrane on the outside of each 20-pound Chiquita box, which slows the ripening process and keeps the bananas in a suspended state of yellow. Chiquita licenses the technology from the Apio Corporation, which also uses it for fresh vegetables. The packaging works by controlling the flow of oxygen and carbon dioxide.

"Think of it as a GORE-TEX fabric for a banana. It allows some things to go in and keeps other things out. And everything stays comfortable inside it," says Gregg Bauer, vice president of consulting firm GEN3, which tested the polymer for Chiquita.

Consumers never see the packaging. But it guarantees a supply of ripe bananas until the next delivery truck arrives, typically once a week.

"This sort of solves the problem of having green bananas Monday and brown bananas Friday," Mitchell says.

So far, Chiquita is selling individual bananas in about 8,000 convenience stores around the country, and the company plans to triple that this year. Even then, Mitchell sees plenty of room for additional growth, with more than 200,000 snack-food outlets where bananas might be sold. Those new sales shouldn't come at the expense of bananas in the supermarket.

"This is really meeting a need for consumers to buy a banana when they might buy something else," Mitchell says. "It's not replacing that banana that they still have on the kitchen counter."

And every convenience customer who chooses a banana instead of, say, a candy bar or a bag of chips means one more sale on Chiquita's corporate tally.