Bananas: Unpeeling the Banana Trade - The Fairtrade Foundation

In response to growing consumer demand for Fairtradeand/or organic bananas, countries such as the DominicanRepublic and Colombia, which have substantial volumesof both, have grown in importance as suppliers.The leading companies importing bananas into the UKinclude four multinationals: Chiquita, Dole/JP Fruit, Fyffes,and Del Monte; and three independents: SH Pratt, MackMultiples and Windwards Bananas. These samecompanies also ripen and distribute the fruit. Althoughmarket share figures change rapidly with changes in retailsupply chains, they all have a market share of between10% and 20%, except Windwards Bananas(approximately 6%). Together these companies controlover 98% of the UK market. 61.2 The new arrivalsIn 2006, around 81 million tonnes of bananas wereproduced around the world, of which 17 million tonneswere exported. 7 Traditional banana exporting countriesare facing further challenges in the form of major newproducing countries entering the market with the potentialto reshape the world banana economy. The world’s twolargest banana-producing countries – India and Brazil –together grow almost double the volume that is tradedworldwide but currently consume the majority of thisdomestically. In India, three state governments – Gujarat,Maharashtra and Kerala – are all actively encouragingfarmers to upgrade their technology and enter the exportmarket. At this stage, there have only been trial shipmentsto Middle Eastern markets, but if the Indian initiativesgo ahead, this will have a global impact. Indeed aspokesman for the Indian fruit exporter Tata Chemicalsrecently predicted that ‘India, in the next five to ten years,will [become the world’s] largest grape and bananaexporter so there is big potential in the business.’ 8Brazil’s exports to its Southern neighbours and toEurope have grown rapidly this millennium, reachingaround 250,000 tonnes a year.In Africa, the promise of zero tariff entry to the EU becauseof some countries’ Least Developed Country’ status hasattracted fruit company investment. In Ghana, Dolestarted exporting from new plantations in 2006, whileChiquita has tested new varieties in Côte d’Ivoire, withplanting of crops for export now underway. Chiquitatechnicians have also acquired land on the coastalplains of Angola, a country which has neverpreviously been involved in banana exports. 9The development of new banana companies with acapacity to move into other markets is also a challengeto the dominance of the established companies. JFC, thebiggest of the new Russian companies, not only importsEcuadorian bananas for the Russian market, but hasinvested in its own plantations, in shipping and in a retailchain, making it the world’s first fully ‘vertically integrated’fruit company, with ownership of the entire supply chain.1.3 Fairtrade in the UK marketFollowing several years of hard work to put Fairtradestructures in place, the Windward Islands shipped thefirst ever Fairtrade bananas to the UK in 2000. The overallmarket has grown from 5,500 tonnes that year to 158,000tonnes in 2007. Driven by the commitment of Sainsbury’sand Waitrose to convert to 100% Fairtrade bananas, salesare on track to reach 193,000 tonnes for 2008, an overallgrowth of 3,400%. To meet this growing demand, 63producer organisations from eight countries (Ghana,Ecuador, Peru, Colombia, Windward Islands, Costa Rica,Jamaica and the Dominican Republic) have now beencertified, with 42 of them supplying Fairtrade bananasto the UK.350300250200150100500Value(£000)Growth of the UK Fairtrade banana market (by value)(2000-2007)1999Year200020012002Sources: DEFRA and Fairtrade FoundationConventionalFairtradeThe initial success of Fairtrade bananas owes much todedicated Fairtrade companies like the Dutch pioneerAgrofair which imported the world’s first Fairtrade bananasinto Europe in 1996. It is co-owned by the farmers whogrow the fruit it imports and markets exclusively Fairtradefruit and juices, having now expanded into mangoes,citrus fruits and pineapples.200320042005200620075Communication from Windwards Bananas.6Information compiled by Banana Link from trade sources.7United Nations Food and Agriculture Organization.8Freshinfo News. Saturday 10 January 2009.9Communication from Banana Link.page 3 Unpeeling the banana trade