just the answer: Wouter Van Cauwenbergh, Chiquita Brands
Chiquita developing dried, frozen line-up
Fresh produce companies are increasingly looking to develop their value-added offering in order to boost margins and Chiquita Brands International is no exception. While the company sees its core banana business as its "bread and butter", Chiquita is also working to develop its processed business through its Fruit Solutions arm. Wouter Van Cauwenbergh, senior sales manager for the company's operations in the EMEA region, spoke to just-food about the its ambition to develop a value-added consumer focused business.
just-food: In addition to its fresh produce business, what value-added products does Chiquita manufacture?
Wouter Van Cauwenbergh: Chiquita as a brand is famous for fresh bananas. That is our bread and butter, it is what Chiquita stands for. It is a world famous brand but apart from the fresh division we also have what we call an ingredient division. Now, we don't want to profile ourselves just as an ingredient producer and supplier. That is why we have named this division Chiquita Fruit Solutions. What does that mean? We make products out of tropical fruits. It's not just about bananas. We make products out of mango, banana, papaya and passion fruit for any kind of application. We make a lot of purées that go into juices, we are also developing some frozen products and we are manufacturing a range of dried fruits.
j-f: What prompted Chiquita to expand beyond the core banana business into value-added products?
Van Cauwenbergh: Traditionally we are B2B company but we see that there is much more potential and money to be earned in B2C. We want to grow our B2C business through supermarkets, as well as foodservice - to airlines or catering companies. That is why we are developing frozen and dried fruit chip products. We hope that this will be a way to add value to our banana business and that we will grow the proportion of sales from value-added products. I would be very happy if we could reach a share of 10% of Chiquita's turnover with the dried chips. That would be a major success. To grow our B2C business, of course the brand is important. But so is the fact that our products are 100% natural. That is the philosophy of Chiquita, that it has to be as fresh as possible and also healthy. The trend in Europe and North America is to go to healthy snacking. On the go, yes, but also as healthy as possible.
j-f: So Chiquita's end-consumer business is focused on producing snack products in the dried and frozen categories?
Van Cauwenbergh: Our dried fruit chips are ready for consumers and we have three varieties - a fruit mix, banana chips and pineapple chips. Today, we are selling them in the UK, where they are available at Asda, as well as Switzerland and the US. It is running really well.
In the frozen food category, we have a pineapple stick in nice Chiquita brand packaging. The idea is you take it out of the freezer, it takes 15-20 minutes to thaw, you pop off the top and you can eat it like a snack and it tastes fresh and is delicious. That is already being sold to McDonald's in Holland and Belgium, for use in the kids meals. This is a test in Holland and Belgium, if it goes well we are looking at rolling it out all over Europe.
j-f: Which key customers are you targeting to expand your consumer business?
Van Cauwenbergh: We aim to grow the dried fruits business in premium retailers - because it is not cheap - and airlines. We already have a couple of customers where this is put in the in-flight menu. The frozen products, we see a lot of potential in quick-serve restaurants, general catering and also retailers like petrol stations. They are used to working with frozen items; they can put them in the cooled shelf. There is potential in food-to-go for this product.
j-f: Which countries are you aiming to launch in?
Van Cauwenbergh: In Europe, traditionally we would go to the countries where Chiquita is known as a brand. Chiquita is very famous in Scandinavia, Germany, Austria, Belgium, Holland, Italy and Greece. Those are the countries where Chiquita has a brand awareness of about 98%. In the UK our brand is less well known. If we come up with new concepts or target new markets [in Europe] we will primarily focus on the Benelux countries and Germany. Then if it works out well we roll out further, first in Scandinavia and then down South.
Our consumer business is also being rolled out in the US. The chips are being sold in the US through Wal-Mart Stores and several other retailers
j-f: How quickly do you want to grow your consumer sales?
Van Cauwenbergh: It all depends on capacity. Right now there is still room; we are not yet running at full capacity. If we see it is going to be growing, and growing fast, then we need to invest in our capacity. The dried chips and frozen products are produced in our factory in Costa Rica. Depending on the market success we would need to invest further. But today, it is difficult to say "by 2013 we are going to have a US$25-30m business". That is certainly what we hope.
j-f: Are you investing in marketing to help drive growth?
Van Cauwenbergh: With the chips, it is mainly in-store marketing at the moment. We just redesigned our website, because we are going more B2C, so we will introduce more and more articles about our products. We will definitely be engaging more in B2C specialised communication.
j-f: Are any other products in the pipeline, or are you focused on gaining acceptance to the new frozen and dried products? Is Chiquita developing any other areas of the business?
Van Cauwenbergh: At the moment we are focused on the frozen and dried segment. Our pilot project with small passion fruit growers in Costa Rica is a significant development. Today, 95% of passion fruit comes out of Ecuador. We in Chiquita decided to do it differently. We contracted over 100 small farmers in Costa Rica, close to our factory. We provided materials - the seeds, the fertilizers - to start growing passion fruit. This project is providing smallholders with a market for their entire harvest at stable prices - very different from coffee and other products which are subject to fluctuating demand and prices. It is also creating new employment opportunities for men and women in a region with problems of unemployment and poverty. The approach has could well be expanded to other tropical fruit products - we are quite proud of this promising initiative.
j-f: How else are you developing your sustainability credentials?
Van Cauwenbergh: We are committed to high social and environmental standards on our own farms and those of our suppliers. This year we have celebrated 20 years of working with the Rainforest Alliance standard for sustainable agriculture. From a cautious beginning in 2012 has evolved a network of hundreds of Rainforest Alliance certified banana and pineapple farms. All of Chiquita's own farms and high percentages of our banana and pineapple suppliers are certified and audited annually by independent experts for compliance with comprehensive social and environmental criteria. Our passion fruit growers in Costa Rica also became Rainforest Alliance certified in 2011 - a first for a small passion fruit grower group anywhere.
Our fruit processing facility in Costa Rica also reached a sustainability milestone in 2011, when a new biodigester was inaugurated in the presence of the President of Costa Rica. This pioneering innovation generates biogas from the organic residues in the plant's wastewater - an entirely biological process. The result: 15-20% of the electricity used comes from fermented waste water.
j-f: Moving forward, will you continue to invest in this type of project?
Van Cauwenbergh: Absolutely. We are not there yet, but we would like to be able to say to our customers "these chips were made in an energy neutral factory". Our customers are increasingly demanding sustainably produced products, and we at Chiquita are committed to delivering just that.
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