A top banana among banana producers, Chiquita Brands deals in bunches. The company grows, procures, markets, and sells bananas and other fresh fruits and vegetables under the Chiquita name and others. Its other offerings include pineapples, packaged ready-to-eat salads, fresh fruit and vegetable ingredients for the foodservice industry, and processed fruit ingredients. Its Fresh Express brand is the leading US seller of packaged ready-to-eat salads. Chiquita's products are sold in nearly 70 countries, mainly in North America and Europe. Brazilian agribusiness Grupo Cutrale and investment firm Safra together own Chiquita.
Change in Company Type
In early 2015, Brazilian juice maker Grupo Cutrale and investment firm Safra Group paid $682 million through affiliate Cavendish Acquisition Corporation to take Chiquita private. Under the terms of the deal, North Carolina-based Chiquita became a wholly-owned subsidiary of Cutrale-Safra but remained incorporated in New Jersey. Chiquita ceased trading on the New York Stock Exchange.
The company operates three main business segments -- Bananas, Salads and Healthy Snacks, and Other Produce. Its Bananas segment makes up the bulk of its sales, and it gets most of its business from North American, followed by European, Mediterranean, and Middle Eastern Markets.
Its Salads and Healthy Snacks division includes packaged, ready-to-eat salads sold under the Fresh Express brand (and other private labels) in the retail market; fresh vegetable and fruit ingredients used in foodservice; healthy snacks; and processed fruit ingredient products. Nationwide, the segment distributes roughly 250 types of retail value-added salad products and 30 value-added healthy snacking products.
The Chiquita sells its brands in nearly 70 countries worldwide. The US accounts for the majority of Chiquita's business, while Italy and Germany are core European markets. Half of the company's banana sourcing comes from the countries of Guatemala and Costa Rica.
Sales and Marketing
Chiquita maintains regional sales groups to sell and market its products to retailers and wholesalers. In North America, 90% of the company's volume is sold under one-year or multi-year fixed price contracts to both regional and national grocery stores, while the rest is sold on the spot market. Chiquita sells one-year and multi-year contracts in Europe and other international markets, but the contracts are flexibly-priced.
Company-owned farms produce one-third of Chiquita's bananas. To satisfy demand, however, the company looks to third-party growers in Colombia, Costa Rica, Ecuador, Guatemala, Honduras, Mexico, Nicaragua, Panama, and the Philippines for the balance of its bananas. Chiquita, which relies on third parties worldwide for all of its lettuce and other fresh produce, primarily serves the global retail and foodservice sectors.
Chiquita's mid-Atlantic distribution hub is the Port of Wilmington. In July 2014, the company signed an agreement with Diamond State Port Corporation to continue the use of this hub until July 2019, with two 5-year lease renewal options to potentially expand the contract until 2029.
The company's salads and healthy snacks business supports Chiquita's strategy of providing more convenient, healthy-food options to meet the needs of consumers. The company ships Fresh Express ready-made salads that enjoy the #1 position in the US, controlling roughly one-third of its market share. Some of this segment's sales come from foodservice customers (mostly quick-service restaurants). While Chiquita provides the foodservice industry with lettuce, tomatoes, spinach, cabbage, and onions, what's purchased most often by customers in this niche is shredded lettuce.
Chiquita is also focused on expanding its product range and brands to new segments, categories, and geographies. To that end, it has introduced Gourmet Café, Chiquita to Go, Just Fruit in a Bottle, and Pineapple Bites to non-grocery venues, including convenience outlets, gas stations, club stores, and coffee shops.
Chiquita has narrowed its strategic focus to concentrate primarily on bananas and salads.