If you are a reasonably average person, you bought bananas. For most of us, we eat them but do you really know much about them? A book called Banana – The Fate of the Fruit that Changed the World by Dan Koeppel published by Hudson Street Press Penguin, NY, 2008 offers insights into the banana. The banana grows on the banana tree which is not a tree – it is the world’s largest herb and the fruit is a berry. There are many varieties of bananas found around the world but the type which made an industry was called Gros Michel and the type that most of his buy at the supermarket is called Cavendish.

The reason the first type disappeared was a fungus and the second one had to be invented. When you eat a peach, you will find a large seed in the middle. When you eat a banana = there are no seeds. This means when the fungus or disease attacks banana plants, researchers have a very difficult time finding a replacement or making the existing type more disease resistance while keeping all the good attributes we consumers want and enjoy.

Bananas made their way into the US around 1870, when Captain Baker brought back some bananas from the Caribbean and they sold out making a profit. This meant a next shipment and soon an industry and by 1900 bananas were available around the country. The two dominant companies were United Fruit and Standard Fruit. The heyday of the companies was in the 1950’s, the US government overthrew a country’s government to prevent land reform or to protect the landholdings of the banana companies. The name banana republic struck and was for the most part accurate.

The first banana was Gros Michel and among its many traits was when the banana was picked prior to ripening it did not bruise easily. After the disease affected the crop, a new banana was introduced – the Cavendish. It was very similar to Gros Michel but it bruised easily. The solution pack the bananas in boxes and that is the way you see them in the supermarket.

The history of the banana is also a great logistics story – within 7 days of picking, the bananas were loaded on refrigerated ships, came across to the US, unload and moved from port cities to supermarkets to be sold. The price was less than the price of apples, easily fit into lunchboxes and is good to eat. A staple was born and continues.

Corporately United Fruit had a near monopoly, but they were tied to Gros Michel and suffered losses when their monolithic crop suffered disease. Standard Fruit because it was smaller, made to be more innovative discovered and planted the Cavendish. United Fruit had great profits and paid dividends for many years, it operated as all the land in the country was for them, which meant as soon as disease attacked the estates, the company moved further down the railway line. The company had built railway lines, port facilities, ensured no labor unions so pay was low, and picked up and moved. One wonders did the company enrich the soil or allowed the banana plants to deplete the soil when the trees were removed? I would suspect they did little and is one of the reasons the disease came forth. In later years, the use of pesticides was and is an important role in growing the banana.

Now days United Fruit lost money, went into bankruptcy and emerged as Chiquita which is controlled by Cutrale and Grupo Safra; Standard Fruit was bought by Castle and Cooke originally from Hawaii which became Dole of California; Del Monte which is controlled by IAT Group; Fyffles which is popular in Europe as it is controlled by an Irish company. The banana companies you see at the supermarket rarely own the land the bananas are grown on, preferring to buy or act as a middle man.

Linking to dividend paying stocks, for a long time United Fruit was a very profitable stock headquartered in Boston and contributing much to the institutions of the city. Over the years, the industry changed, mergers and demergers happened and alternatives were needed. In every industry there are players, but it does not mean they are the largest players forever. How and why does the company make money are still very important questions to understand.

There are more questions than answers, till the next time – to raising questions.