Now not the time to discount banana trade

The international marketing magazine for fresh produce buyers in Europe
Mike Knowles

BY MIKE KNOWLES

@mikefruitnet

Now not the time to discount banana trade

With retailers pushing discount brands during the economic slowdown, life has become more challenging for banana companies

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The discount pandemic has spread like wildfire across Europe during the past year, bringing leading retailers out in a rash of private labels and own-brand products. Tesco, Carrefour, Intermarché, Waitrose, Mercadona, Delhaize, Auchan, Asda – these are just some of the companies which have recently launched discount brands or price-saving banners in a bid to entice budget-conscious shoppers into their stores. But do they really work? Or are they simply a last desperate attempt by these major retailers to cling on to market share as the likes of Aldi, Lidl, Netto and others reap the rewards of a more prudent age?

For banana companies, this wave of discounting in Europe has offered a reminder of just how hard their job has become. While input costs and transport rates continue to rise, the downturn in consumer spending has prompted the majority of the big retail customers to push even harder than usual on price, while the total number of customers has become altogether more limited. Factor in market slowdowns in Russia and the Mediterranean, as well as losses of supply in Panama, Costa Rica and Colombia, and the picture across the EU for banana sales has looked rather challenging during the first quarter of this year.

Big banana companies have always been about big brands. For them, the trick is to ensure those big names offer something other suppliers don’t: better service, the right certification, social responsibility, environmental sensitivity, food safety and more – if your brand can deliver on that promise, then it has a chance. What has changed in the past year or so is that some retailers are starting to believe they can obtain all of this by themselves. But, for the time being at least, there are two silver linings: for the most part, retailers don’t seem able yet to source bananas entirely on their own; and, despite the recession, people are still eating lots of bananas.

Now is certainly not the time to discount the banana import business entirely.

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