Well before the Cavendish emerged as a replacement for the Gros Michel, early U.S. banana companies made a strategic decision to transform the banana from a high-margin, low-quantity luxury product to a low-margin, high-volume staple. Banana companies were extraordinarily successful in executing this shift. Today, the European Union imports about six million tons of Cavendish bananas each year. That’s 110 bananas per person. The United States imports 130 bananas per person each year, and Canada beats both of them with 150.
Douglas Southgate is an economist and emeritus professor at The Ohio State University who studies bananas. He finds particularly instructive the story of Chiquita, which was founded in the 1800s and known for most of the 20th century as United Fruit Company. United Fruit had an enormous fleet of ships, second in the Western Hemisphere only to the U.S. Navy. The company’s fleet and innovations in refrigeration allowed it to import huge quantities of bananas from Central America to the United States.
“The major beneficiaries of this efficiency were, in fact, consumers,” Southgate says. “Prices were slashed, and within a few years, bananas were no longer a luxury item. They were instead a fruit of poor people. The first food that a lot of poor babies ate after weaning were mashed bananas in the days before canned baby food.”
United Fruit (and other companies) also engaged in some rather questionable practices in banana-growing countries.
“Foreign companies, led by United Fruit, were willing to make the investment to clear land, put in infrastructure, and so forth to start producing bananas on a massive scale for the U.S. market,” says Southgate, “but only if they were awarded vast tracts of land and largely exempted from taxation. So that gave them the dominant position. That’s what led to banana republics.”
“Banana republic,” before it was the name of a clothing store, meant something very different — essentially, a fragile country whose economy and often political leadership were propped up by an export crop. United Fruit tangled repeatedly with governments in various banana republics. Ultimately, the company ran afoul of the U.S. government as well, which accused United Fruit of monopolistic behavior.
In 1967, United Fruit agreed to reorganize and sell off some of its strategic assets. The next blow came from Ecuador. By the time major fruit companies turned their attention to Ecuador, most of its land was already owned by independent farmers, making the country less susceptible to political and economic exploitation.
“Here was this important source of supply that came online in a very big way, very quickly, after World War II, and it was a source of supply that was impossible for United Fruit to control,” says Southgate.
Today, no one company comes close to dominating the international banana trade like United Fruit once did. The three biggest banana companies — Dole, Del Monte, and United Fruit’s successor Chiquita — share around 40% of the global export market. As economists will tell you, competition helps keep prices down.
But there’s an even more powerful explanation for why bananas are so cheap: standardization. Andrew Biles, the former CEO of bananas and pineapples for Chiquita, says that companies today have perfected the science of growing Cavendish bananas.
“You know how that banana is going to function when it’s transported into refrigerated cargo,” says Biles. “You know how it’s going to perform in the ripening rooms in the country of destination, and you know how it’s going to perform and hold up on the retail shelf.”
It’s not just that nearly every banana grown for export is a Cavendish; it’s that every Cavendish banana is genetically the same as the next Cavendish. From a business perspective, that’s ideal — the ultimate in quality control. From an agricultural perspective, however, it’s a problem.
“There’s no diversity… each plant is the same,” says Biles. “Each plant has the same resistance to disease as it spreads.”
The strain of Panama disease that killed off the Gros Michel was known as TR1, or Tropical Race 1. In the 1990s, a strain called Tropical Race 4 emerged and started attacking Cavendish bananas. By 2000, it was clear that TR4 was going to be a big problem. As Biles tells it, TR4 started in Indonesia and has since spread to the Philippines. The industry is worried that Latin America will soon follow.
“If you look at the map,” says Biles, “it’s a disease that seems to be spreading west.”