Why The Banana Business Of Chiquita And Dole Is At Risk

Why The Banana Business Of Chiquita And Dole Is At Risk

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Americans love bananas. We eat more of them
than any other fruit. We even bicker about the
proper way to eat them. It’s not brown. Yes, what is that color? Oh, that crunch
right there. This banana did
the same thing! No. Basically, we’ve gone
bananas for bananas. Specifically, we like this
banana: the Cavendish. There are hundreds of varieties
of bananas, but the Cavendish is the only one
widely available in the U.S. In 2018 alone, the U.S. imported about 2.2 billion dollars worth of the
Cavendish, or about 10.5 billion pounds. But there’s a problem. A deadly fungus that
targets the Cavendish is spreading around the world. The fungus and the disease it
causes go by a few names, most often Tropical Race
4 or TR4 and Panama disease. But whatever you call it, the
result is the same. The fungus actually infects through
the roots, gets into what’s known as the corm, which
is the big bulb at the bottom, and then gets
into the vascular tissue. The first symptom is
usually a very characteristic yellow leaf, just one leaf. Very quickly after that,
the plant dies. Bang. Bang indeed. It hasn’t yet arrived in
Latin America, the region that supplies the U.S. with 97 percent of its bananas. But experts agree that it’s
only a matter of time. It has spread across
oceans, two continents. And, if you look at them ap, it’s coming to Latin America. There’s no question about that. All it takes is one person
to transfer this on their shoes, and then we’ve got
an epidemic and it’s going to sweep through the
American production system like fire. This is troubling news for
banana fans and for the three American companies that
dominate global banana sales. As of each company’s
most recent public filing, bananas comprised significant portions
of their sales. But the worst part? We can’t stop it. We know this because
Panama disease has already destroyed the banana
industry once before. Bananas are, like, the most
boring, mundane objects on Earth. Like, it’s
just a banana. This is Dan Koeppel, author
of this book about bananas. Yet behind the
banana is this amazing, fascinating history. It’s like science, it’s
culture, it’s it’s bloodshed, it’s murder, it’s
music, it’s everything. We’ll get to all that. But let’s start here. U.S. imports the second
largest number of bananas, behind the European Union. But banana agriculture barely
exists in either place: a dwindling amount in Hawaii
and a moderate amount in the Canary Islands. To understand bananas improbable
domination, we have to go back to the beginning. Bananas were first cultivated here
on this tiny island 3000 years ago. They migrated with humans
across Asia, the Middle East, and Africa, becoming
a staple everywhere they went. Arabic and European
scholars even bickered over whether the famous fruit that
tempted Eve was not an apple, but a banana. Bananas arrived in the Americas
in 1516, when a Spanish priest brought them from
the Canary Islands to the Dominican Republic. From there, they spread throughout the rest of the Caribbean. Bananas are fragile and
rot within a week of being picked. In the early half of
the 19th century, the small amount that managed to make
it to the U.S. were sold as an
expensive luxury food. But after the Civil War,
bananas became a huge craze. Between 1871 and 1901, the
value of the bananas imported to the U.S. increased from $250,000
to $6.5 million. And in the 10
years after that, U.S. consumption of bananas nearly
tripled from 15 million to 40 million bunches. So many banana ships arrived
at these docks on Manhattan’s Lower East Side that
they became known as the ‘banana docks’. This shift is thanks
to these three entrepreneurs. By 1899, they had formed a banana importing business called United Fruit Company. That might not sound familiar,
but its modern name will: Chiquita. But back then, it was United
Fruit and it was huge. So huge that it gained
the nickname ‘El Pulpo,’ or ‘the octopus,’ for the
stranglehold it developed on Central America. So huge that the U.S. government repeatedly brought
antitrust action against it. So huge that understanding
bananas in the first half of the 20th
century means understanding United Fruit. United Fruit’s business model
relied on economies of scale. I mean the banana really
is an impossible export fruit. I mean, it’s fragile, it
ripens quickly, it gets rotten fast. And the way to do it is
to make it so cheap that your money is made on volume. Keeping the retail price low
meant keeping the costs to produce those bananas
very low. But transporting a delicate
tropical fruit across thick jungles or hurricane-stricken
oceans was not a recipe for rock-bottom
production costs. United Fruit managed this
by tightly controlling every aspect of the supply chain. First, United Fruit acquired huge
swaths of land in Latin America. In exchange, they constructed
railroads and telegraph lines — infrastructure that locals
could use, but that remained under
company control. During the heyday of its
operations, it was generally the largest landowner in
any of these countries. At one point, it controlled
almost 20 percent of all arable land in
Guatemala for example. Second, United Fruit squashed
competition with price wars or buyouts, becoming a
virtual monopoly by the early 20th century. The U.S. government brought antitrust
lawsuits against United Fruit multiple times. In 1909, the government forced
the company to sell the 50 percent of shares it owned
of one of its last remaining competitors. The company’s previous owners
regained control and later renamed their
business Standard Fruit. Remember that name. It later became Dole. But the most controversial
aspect of United Foods early history was its
treatment of local plantation workers. In order to produce bananas
very profitably, you have to keep the
wages extremely low. And so the plantations
historically have resorted to extremely repressive labor conditions
in order to suppress wages. Workers often protested these
conditions, but United Fruit took drastic measures
to squash rebellion. Measures that often involved
military action, either from local governments or
from the U.S. itself. In 1928, workers
from United Fruit plantations in Colombia went on strike. United Fruit encouraged the
government of Colombia to suppress the strike. That December, the workers were
told they could meet with the regional governor in
the town square to discuss their demands. Instead, the Colombian army
mounted machine gun nests in all the surrounding buildings
and gunned down, it’s estimated, up to 3000
civilians in cold blood, including many women and
children and elderly people. And so the national governments
were the ones who were mainly involved in the
suppression of strikes, but they were acting very much
at the behest of United Fruit. And when local governments
couldn’t or wouldn’t step in, the U.S. itself did. [Newscaster] Dateline
Nicaragua, 1926. In a moment, the story The U.S. Marines landed repeatedly
in Central America. The U.S. government was determined to
prevent any sort of communism from taking hold
in the Americas. When banana workers on
United Fruit plantations protested for unions or rights,
it raised fears of Communism. Fears that many
historians argue were more of a convenient excuse
than a legitimate threat. The accusation always flung
at union organizers or human rights activists was that
they were acting under communist auspices. It was a very convenient
way of dismissing those movements and rationalizing
extreme political and military measures
against them. They sort of lost sight of
the fact that they were a banana company and not
sort of the political communications arm of
the anti-Communist campaign. I mean, it sounds crazy
but it’s really true. Perhaps the most notorious example
is that of Jacobo Árbenz. In 1950, Árbenz
won the presidency in Guatemala on a promise
to redistribute unused United Fruit land to
poor Guatemalans. The company sounded the
alarm, which quickly reached the White House thanks to
a few well-placed company executives. Allen Dulles, who was a
lawyer who worked for United Fruit and a board member
of United Fruit, was the brother of John Foster Dulles,
who was the secretary of state in
the Eisenhower administration. And so when United Fruit
perceived its interests to be threatened in Guatemala, there
was a direct communication of that threat
from United Fruit’s managers on the ground
in Guatemala to Allen Dulles, in turn to his
brother, in turn to President Eisenhower, who then directed the
CIA to lead a disinformation and destabilization
campaign against Árbenz — one which resulted
in his being overthrown and exiled and which
ushered in literally two generations of military
governments, extremely repressive governments
in Guatemala. United Fruit called this
a ‘decidedly favorable development’ in its
1954 annual report. Chiquita declined to comment
on these allegations. However, in 2001, the
company released a corporate social responsibility report
that acknowledged allegations of the company’s
participation in the Árbenz coup and
other events. They noted that ‘this casts
a shadow even today over the company,’ but that ‘times
have changed and so has our company.’ If this seems like a lot
of work for bananas, that’s because it was. But back in the U.S., they were becoming an
extremely popular snack. The American public was
largely unaware of United Fruit’s tactics abroad. But at home, they fell in
love with bananas thanks to the company’s extensive
advertising efforts. To name just a few: in
1924, the company added coupons for bananas to boxes
of cornflakes to encourage consumers to eat the
fruit with cereal. In 1939, the company
distributed free textbooks to grade schools filled, of
course, with information on bananas. In 1944, they
unveiled their most iconic marketing success. Miss Chiquita. The big question is why. Like, Andrew Preston, the
founder of United Fruit, what made him think this
like easily rotten, expensive to ship, weird-looking fruit could
be sold for almost nothing to people who didn’t know
what it was, how to eat it? That weird-looking fruit was
gold for United Fruit. In 1920, the company had
net profits of 33 million dollars, or about 419
million in 2019 dollars. I mean, it was
just just a miracle. A miracle that was bought
obviously in blood and horror. But it was
absolute marketing genius, there’s no question about it. In short, bananas kicked
off lawsuits, advertising innovations, protests, coups,
and violent suppression. But these bananas were
not today’s Cavendish. These are Gros Michel bananas,
a related species that is bigger and tougher than
the Cavendish and with a slightly different taste. They’re also the first
banana rendered commercially extinct by Panama disease. Before we get into
that, some science. Gros Michel bananas were
all genetically identical. The same is true of
today’s Cavendish, which is why bananas look the same no
matter where you buy them. Business-wise, identical products
are good. Companies can standardize
transport systems and cultivate loyalty and
trust among consumers. But biologically,
they’re bad. Monoculture is is always
an issue in agriculture. The problem is that if
you’re growing all the same material, all of these are
going to be susceptible to the same disease. So when the deadly fungus
first appeared in Panama in 1903, it made short work
of United and Standard Fruit’s products. Over the next 57 years,
Panama disease wiped out virtually every Gros Michel
plantation in Latin America. Both Standard and United
Fruit knew of the disease since the early 1900s,
but they dealt with it differently. United Fruit clung
to the Gros Michel, hoping it could outrun the
disease by starting new plantations on fresh land. Demand for bananas was skyrocketing,
but the ability to grow bananas in South
and Central America was declining. The disease was
actually creating this avaricious need for land. That method only worked
for so long. By the early 1920s, banana
shortages were such a noticeable problem that musicians
Frank Silver and Irving Cohn wrote this hit
song, in which a fruit stand vendor repeatedly informs
his customers that he’s out of bananas. By the 1950s, the Gros Michel’s future looked grim. Even the strategy of stealing land as the disease was chasing was, was running out of gas because there was not enough land to meet the demand for bananas. United Fruit went into freefall. From 1950 to 1960, annual
revenue fell from 66 million to 2.1 million. Meanwhile, Standard Fruit
couldn’t afford to constantly buy new land. So in the late 1920s, it
began searching for a banana with the taste, look, and
resistance to Panama disease to replace the
dying Gros Michel. It eventually landed on,
you guessed it, the Cavendish. Standard Fruit grew the
first commercial Cavendish in 1953 on a
plantation in Honduras. It spent the rest of the
decade figuring out how to transport them. Cavendish is very fragile. Gros Michel was never shipped
in boxes, it was just thrown in bunches
into ships. But by boxing them and using
gas to preserve it, to keep their ripening in check,
they were able to ship this and grow them
at low prices. This put Standard Fruit leagues
ahead of United Fruit when the latter finally adopted
the Cavendish in the early 1960s. In that time, just that
10-year span, Standard Fruit, which became Dole, had managed
to get a 50 percent market share. So Chiquita never really
recovered, to this day. Other than Chiquita’s decline,
the switch to the Cavendish went
smoothly enough. Nearly 60 years later,
most Americans happily consume the Cavendish, unaware of
its lost predecessor. For the next few decades,
the industry hummed along much as it had before,
just with a different banana. Standard Fruit became Dole
and United Fruit became Chiquita. Together with Del
Monte and the Irish-based company Fyffes, they dominated
global banana exports, controlling two-thirds in
the 1980s. But the many problems
faced by banana workers continued, more than can
be detailed here. Notably, in 2007 Chiquita admitted
to paying a violent Colombian terrorist group to
protect its banana workers from 1997 to 2004. And in the mid-1990s, Chiquita
kicked off a trade war with the European Union
over its legislation that favored bananas from
former EU colonies. Chiquita lobbied the U.S. government to file a
complaint with the newly-formed World Trade Organization. The ensuing trade war,
called ‘the worst trans-Atlantic economic dispute since
World War Two’ by a 2005 Harvard Business
Review article, dragged on until 2012. Even with all this,
nothing changed for American consumers. Bananas reliably
appeared on supermarket shelves around the nation for
dirt-cheap prices — an average of about 55 cents
per pound since 2000. But this brings us back
to the beginning of this video: Panama disease. In the 1980s, the banana
industry’s old foe reappeared. Banana biologist Randy Ploetz
first identified it in the early 1990s. Basically, what started this whole
thing going was that there was a mindset in
Southeast Asia, In Indonesia in particular, in Malaysia, that
they can make money growing these
huge monocultures of Cavendish for
the first time. When they first started
doing this, they started succumbing to
Fusarium Wilt. It was like, whoa,
what’s going on there? The strain of the fungus that
wiped out the Gros Michel was called Tropical Race
1, or TR1. Cavendish is immune
to that. But it isn’t immune to a
different strain of the same fungus: Tropical Race
4, or TR4. Think of them like different
strains of the flu. It was very
much a surprise. People thought Panama disease would
not be a problem on Cavendish anymore, and lo
and behold it is. Quarantine efforts contained the
fungus in Southeast Asia for a while, but it soon spread. Historically, this has never
been a really great strategy. I mean if you’ve ever
been to a banana plantation, there’s thousands of vehicles going
in and out all day long. There’s there’s no effective quarantine method that we’ve ever seen that really works. For now, Latin America is safe. It’s oceans away
from the fungus. But experts agree that the
fungus’ arrival is a matter of when, not if. Hopefully it’ll take many, many
years but it could happen tomorrow. There’s no way to really
put a timeline on this. Part of the danger is due to how the industry has changed. The giant, corporate-owned banana plantations of the Gros Michel era have been replaced by many more exporters operating on much smaller plots of land. In Ecuador, for instance, the number of registered banana exporters jumped from
181 in 2011 to 333 in 2012. Experts worry that the
logistics of implementing protective measures across so
many plantations will allow Panama disease to spread rapidly. It’s very difficult to make a thousand different family farms do clean farming compared
to one big factory farm. I think what’s possible is that someone’s going to get it in their field and they’re going to keep it a secret and not let people know. And that would be a disaster. Because once it gets in the waterways, in the soil, that sort of thing, it spreads in kind of an insidious manner. And this time, there’s no readily available replacement. No known banana has
the correct taste or durability. They dodged the bullet in the 1950s by identifying a variety, Cavendish. I think if there was something out there, they would’ve found it by now. I know they’ve put a lot of effort into screening material and looking at material
and so far they don’t have a replacement. Even if they did, the
entire infrastructure network for transporting bananas would have
to be replaced once again. The entire banana supply chain, from the moment the plantlet is planted in the ground to the moment you start to peel it, is designed just for the Cavendish banana. It’s almost as though a Cavendish-shaped pipe from Central America comes to your house and it doesn’t really fit another banana. This could explain why, until
recently the big three banana companies seemed unwilling
to recognize the problem. I think they’re still not
quite cognizant of the fact that they’ve got the
same problem happening again. CNBC reached out to Dole, Fresh Del Monte, and Chiquita for comment. A Fresh Del Montespokesperson wrote that: A Dole spokesperson wrote: Chiquita declinedto comment. Breeding a Panama resistant Cavendish, traditionally or by genetic modification, is likely
the best hope for the banana’s future. But each has their drawbacks. Traditional cross-breeding of Cavendish bananas is difficult because of their tiny seeds. People have been selecting bananas for thousands and thousands of years based on seedlessness. No one particularly wants seeds in their bananas. And now we have some residual fertility in it, but it’s very difficult to produce seeds in bananas. Genetically modifying bananas has proven more successful. In 2015, Australian
researcher James Dale engineered a Panama-resistant Cavendish banana. We’ve taken a resistance gene from a wild banana that occurs in Southeast Asia and
is naturally resistant to Tropical Race 4. We’ve moved that gene into Cavendish. That’s how we’ve generated resistance. But any genetically-modified banana
will face strong resistance from anti-GMO groups
in both the U.S. and the EU. But the Cavendish is more important, both for global economies and food security, than
the Gros Michel ever was. In 2013, the World Banana Forum under the United Nations created a task force specifically to combat Panama disease. And demand continues to rise. From 2017 to 2018, global imports of bananas increased by 2 percent to over 40.3 billion pounds, a record level. Over a quarter of that went to the U.S. But if Panama disease takes
hold in Latin America, it will decimate the industry. Cavendish could no longer grow in the quantities needed to satisfy the world’s, and especially the U.S.’s, love of bananas. It may already be there and
we’re just not aware of it. But once it’s there, it’s kind of a ‘horse is out of the barn’ type thing.

100 comments

  1. good riddance, I feel sorry for those who lost jobs but as they weren't paid well and forced to work… I don't like these bananas anyways. you can get plenty of potassium and lots less sugar from other produce

  2. "By the way it's lookin DWIGHT, I'd say he's a dirty,"
    "oh god"
    "collectivising,"
    "no!"
    "commie."
    "COMMIEEEE COMMIEEE"
    "Yeah go get em dwight!"
    "WEEEEEEEEEEEEEEEEE"

  3. Cavendish banana has quite dull taste when compared to other banana varieties grown in Asia, but it is not as fragile as others and is bigger in size. That's one of the reasons GM food is so popular in America, cause so long as it is good looking despite lacking taste or perhaps nutrients as well, it will sell.

  4. Here's a video of a dumpster full of bananas… https://youtu.be/wdjZ50Ay1ZY?t=51 these videos pop up weekly of freegans finding food that could have been donated….

  5. They go great with peanut butter. My kids love em and eat ALOT of them, but they aren't our fav, apples and berries are which are more healthy anyways.

  6. BTW IF you think Adam and Eve ate an actual fruit like apple/banana then you will not be able to understand the Bible at all, that is just false doctrine taken out of context by idiots and parroted by the ignorant that don't do their own study work.

  7. As of August 2019 TR4 has finally reached the Latin Americas. Now it’s just a matter of time before the cavendish joins the gros michel. Once again the U.S proves how really corrupt and evil it really is

  8. i know it may be tragic for all the lazy people. but plantains are better. and lets face it. my neighbor has a fantastic ass but she is not single…

  9. After the chaos they created with the killing, rapes, overthrown democracies in central america sometimes i can't even look at a banana…

  10. my bananas are turning brown before ripening, i have green and brown bananas, what changed this year in how they are managed in the USA? 3 different grocers same result, CNBC can you answer this?

  11. Actually there is a better tasting breed of bananas… in Singapore we have them but not in major supermarket….. it taste powdery and actually bad on the tongue when it is still raw.. but once it is properly ripe, it become this awesome fragrant and sweet banana that I would find it better than cavendish

  12. to all Latinos of poor immigrants from these countries when people tell you to go back to your countries tell them to give back our owed grandparents cheap labor back then we will gladly go.

  13. Chiquita has more than disease to worry about. There's 13 former Chiquita employees are charged with crimes against humanity in Colombia for funding terrorists.

  14. if bananas go away my country Ecuador would probably go into an economic clash. Bananas are so important here than there's a part of our modern Architecture classified as Era Bananera.

  15. Now on I boycott the Cavendish banana. I don't wanna eat that fruit which history contains so much blood to grow and sell.

  16. In order to understand Panama disease you DONT need to go back to the beginning, nor do you have to ramble for an entire 16 minutes before addressing the title of your video. What a waste of time…

  17. I'm more worried that the sky is going to fall then bananas going extinct.

    And why do people keep talking about Eve eating "an apple"? She ate a piece of fruit from a tree called "the tree of the knowledge of good and evil", not an apple tree. But who knows what that fruit looks like, so the Renaissance painters had to paint something, and it looked like an apple.

  18. I’m a Russian senior research biologist. The answer to this dilemma is… pentaethanol cidricethenate folicate. You can thank me later. Davisdanya!

  19. Hmmm..sounds like some news sabotaging banana. Reminds me of someone researching about coconut oils as cancerous in the 80’s. Think again people. Someone is behind destroying a natural friend to rely on genetic ones so they could make
    Money out of it. Cnbc, you lost me here. I will now end watching your documentary.

    I now remember. A lot of networks are backed by agendas.

  20. Proof that ALL corporate business IS political!! It’s al about politics!! Corporations & Gov’t are bedfellows!!

  21. Greedy Americans pillage and destroy everything.
    Murdering 3000+ of my people in cold blood… to profit off of the literal fruit of their lands.

  22. I don't see why they didn't just keep a small sample of the old banana in a separate location to preserve, not mass produce, until a cure could be found to regrow in fields again.

  23. CNBC is good, my goal was to watch about 2 minutes of this but i just kept getting intrigued. The attention to detail is amazing and the information so priceless

  24. This is what happens when the F--ing public goes ORGANIC-A-FIED. The crops don't get proper antivirus/ fertilizer mix that was previously used before the HYPE. ORGANIC, ORGANIC, ORGANIC is all you hippy fied, street people, phony educated, always protesting, unemployed yell and holler. The growers who then grow organic infect the rest of the fields that don"t. Now eat rotten bananas you assholes and you know who you are. Don't f– with the tried and tested agriculture.

  25. this so called expert seems only basing on theoritcal ideas, banana's are like most fruits when ripe they are near spoiling, you can harvest bananas unripe just the right size and it will ripe throughout shipping to grocery

  26. Damn, I totally forgot about antitrust laws. I've only grown up in a generation of mega-corporations and monopolies.

  27. Oh my God, that's the worst thing I have heard since when Iran's government killed 400+ protesters last week

  28. All this could have been averted in the US citizens were willing to pay a little bit extra for their bananas.

  29. GMO is not that of a problem if you don't have cross pollination (again, babana seedless) and the alternative is no babana for the consumer

  30. and it arrived not a few months later after the posting of this video. Eat the cavendish while you have the chance to get it easily still…

  31. Hmm.. banana here is free… and very cheap if you want to buy it in the market.. all types of banana here is very very cheap .

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