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May 11, 2023

Merchandising Bananas For Profit, Not Loss

By: Jodean RobbinsDecember 20, 2022 Originally printed in the November 2022

By: Jodean RobbinsDecember 20, 2022

Originally printed in the November 2022 issue of Produce Business.

Bananas have traditionally been considered a loss leader, yet effective merchandising can help stores realize profit in this key category.

Bananas are consistently one of the top-selling items sold across all items in grocery stores throughout North America with upwards of 90% household penetration, according to Bil Goldfield, director of corporate communications for Dole Food Company in Charlotte, NC. That's why it's critical they remain a focus in the department, he says. "Opportunities remain ripe for retailers and produce managers looking to increase sales by leaning into the fruit's satisfying connections."

"Produce departments should prioritize the merchandising and marketing of bananas since they are among the most-purchased items in grocery stores," agrees Pablo Rivero, vice president of marketing at Fresh Del Monte North America in Coral Gables, FL.

Stores can make bananas a profit-worthy product by touting value and other attributes. "In the past, bananas have been considered a loss leader, but that is changing," says Anthony Serafino, executive vice president at Exp Group in North Bergen, NJ. "Stores can make money on bananas."

Stores who merchandise well do well on bananas, even with increasing prices, adds Gabriela D’Arrigo, vice president of marketing and communications for D’Arrigo New York in Bronx, NY. "As price goes up, it's a good reason to put more thought and effort into merchandising, so shoppers stay aware of banana value," she says.

Bananas are generally merchandised well, but could be merchandised even better, asserts Kim Chackal, director sales and marketing at Equifruit, a Fairtrade-certified banana importer and marketer in Montreal, Canada. "Equifruit is obsessed with improving on merchandising," she says. "We have a message that's beyond taste and convenience and draws consumers into additional attributes."

What needs to happen is a shift in the mindset at retail, suggests Chackal.

"Stores don't need to use bananas as a loss leader anymore, especially with brands such as Equifruit," she says. "Consumers value fair trade. These brands allow stores to up the retail price and tell the story behind the product. It's a win-win-win. And, even these bananas will still be the cheapest product in the department — our most expensive banana is still the cheapest product in produce. It's completely affordable."

Bananas are an economic all-weather fruit. "Volume of banana consumption increases during hard times since they are more affordable than other fruits," says Mónica Molineros, international business manager at Favorita USA in Guayaquil, Ecuador. "Best price practices include adding value to the fruit, such as traceability, living wage bananas, carbon neutral bananas and special packs."

The distributors working with Organics Unlimited of San Diego, CA, have been outstanding in helping communicate current cost pressures to retailers, according to Mayra Velazquez de León, president and chief executive. "Even more inspiring is the number of emails I’ve received directly from retailers on how we can work together to increase the price at retail over the ‘forbidden threshold,’" she says. "These messages provide much-needed encouragement and acknowledgment that what we are doing matters and is worth fighting for."

Additionally, a price per unit may be more common soon, given inflation, according to Serafino. "Bananas are still sold primarily by the pound, but there is movement in this direction," he says. "Unit pricing makes more sense to shoppers, and we see more retailers going off a per-unit price."

As the focal point of many departments, bananas must be displayed prominently and with quality in mind. "When we think of a fresh produce department, we all think bananas," says Gabe Flores, director of produce at Bashas’ Family of Stores, with more than 50 stores in Arizona and New Mexico. "The perfect banana display completes the produce department."

Bananas are considered the reigning champs of produce. "They have historically been center stage in the produce department, usually up front and center," says Tracie Levin, controller at M. Levin and Company in Philadelphia, PA. "They are an item most everyone buys when picking up their produce assortment."

"Bananas should never be hard to access, requiring people to touch them a lot," she adds. "The more people touch the fruit, the more bruised they get. Bananas will look unattractive when they bruise, which often ends up making them items for the trash since people will pick around them."

Stores should be sure bananas don't get lost behind other displays, suggests D’Arrigo. "Veg has taken over the produce department, so be sure bananas remain right out front."

Effective display signage is vital for profit. "Being able to recognize conventional from organic produce is important to the consumer," says Velazquez de León. "Making sure organic bananas are properly displayed and have appealing signage is critical to gaining attention."

Sales depend on quality, which depends on proper handling and positioning. "Bananas are one of the most delicate items in the produce section and it's best to merchandise in a single layer," says Chackal. "Bananas need to be placed delicately to protect the integrity of the fruit."

Bashas’ Flores advises a single-layer display is by far the best practice. "A double- or triple-layer display only creates bruising and damage to the banana," he says.

Highland Park Market in Farmington CT, with three stores, utilizes banana trees to merchandise bananas in different locations, and to offer both ripe bananas and greener bananas, according to Brian Gibbons, produce director.

Chackal shares a positive example from a Sobey's IGA banner in Quebec. "They installed racks above the conventional display where Equifruit organic bananas hang on hooks," she says. "That prevents scarring on the fruit."

Chackal also mentions seeing some retailers with beautiful produce departments, but bananas stacked seven layers high. "That's the equivalent of leaving ice cream out at room temperature," she says.

Carrying a good quality product at optimum color is fundamental. "Highland Park is more concerned with offering a premium banana and having the colors offered be perfect for customers," says Gibbons.

Retailer experience shows consumers prefer to purchase bananas when they have bright yellow peels and firm pulp, explains Del Monte's Rivero. "If bananas are too green or too ripe, customers will likely bypass the display or purchase fewer bananas," he says. "To generate maximum sales, we recommend merchandising bananas at 3.5 to 4 on the color chart, as this provides customers with a beautiful yellow piece of fruit they can enjoy immediately or within the next day or two."

Stores can also build sales by managing a two-stage program. "A two-stage banana program drives customer satisfaction," says Bashas’ Flores. "Display both ready-to-eat bananas and some that will be ready tomorrow. Retail can effectively manage this by having a robust beginning-to-end, two-stage ripening program in place."

Ideally, a market should sell a variety of colors to suit the buying needs of all, agrees Levin of M. Levin. "Some people want greener bananas, others want yellow with brown spots," she says. "If you store the bananas separately, but merchandise them together, changing the displays often and re-arranging them, you should have success."

Correctly managing a two-stage approach counts on stores having the right team at the ripening facility. "Being able to ripen, manage and stage it out properly is key," says Equifriut's Chackal. "You want a supplier who is well-experienced at banana ripening and can execute it properly. You also need store-level employees trained to identify the product and understand how to put them out on the shelf."

Serafino of Exp suggests retailers who want to try a two-stage program take advantage of the colder months. "If a retailer isn't doing a two-stage and wants to try it, the colder months are an optimal time."

D’Arrigo cautions stores not to over-buy bananas. "A common mistake is to not utilize the local wholesaler for bananas," she says. "If stores buy entire loads, then they’re stuck with product that turns quickly," she says. "We tell our customers to buy what they know they can sell. It's the over-buy that really kills the business. Once the bananas turn, there's not much you can do."

Stores can increase banana purchases by providing package and variety options. Serafino is seeing an increase in bagged bananas. "In this area, a lot of our retailers prefer bananas to come packaged in bag versus banded or naked," he says. "It's easier to set up and looks cleaner. Shoppers are just grabbing the bag and they’re increasingly paying per unit instead of price per pound."

Adding specialties makes the category more exciting as well. Bashas’ believes in offering a full variety of bananas, including red bananas, baby banana, burro bananas, plantains and more. "Increased variety drives incremental sales," says Flores.

Although conventional and organic Cavendish are typically the best-selling category of bananas, a variety of bananas helps expand the display, agrees Rivero. "Offering baby bananas, manzanos and red bananas diversifies produce offerings and creates eye-catching displays for consumers," he says.

Last year, Fresh Del Monte worked with its production team to launch a new specialty banana — the Bananini — a smaller Cavendish banana. "The size makes them the perfect on-the-go snack for consumers with an active lifestyle as well as an ideal, portable and time-saving snack for school lunches."

The yellow Cavendish is still America's favorite banana, but other exotic varieties such as Dole red bananas, plantains and baby bananas are increasingly popular, states Goldfield.

"Consumers are becoming increasingly adventurous in trying new and unusual items," he says. "Stocking these varieties can boost incremental banana sales and give produce managers more options for display. Produce managers should ensure the fruit is shown well with usage suggestions and education information available, as consumers discover the flavor possibilities of these unique fruits."

Exp sells manzanos, baby bananas and other specialties. "Retailers are advocating for more baby bananas than I’ve ever seen," says Serafino. "It's a way for them to increase ring through offering more options. Coming out of the pandemic, consumers are looking for more choices in produce."

Attractive packaging, POS materials and digital support are available from suppliers to help retail communicate with shoppers.

"So much of merchandising has to do with packaging, so having clever packaging is very important to us," says Equifruit's Chackal. "One of our most innovative POS tools is the installation of audio spotlight machines above banana displays. When the shopper approaches the display they hear a recorded message."

The Ecuadorian Banana Exporters Association has developed the "Banana Culinary Guide" marketing initiative. "This guide was prepared in conjunction with a renowned school of chefs in Ecuador and highlights the qualities of flavor and different textures the banana can provide in recipes for salty and sweet dishes," says Favorita's Molineros.

Velazquez de León mentions the value of educating consumers on the impact of their purchases when they choose to support a fairly traded and socially responsible brand. "Our GROW label helps growers and gives back to their families, communities and environment," she says. "Don't be afraid to say it through in-store signage and product displays, customer interaction with retail personnel or in-store PA announcements. Customers will thank you for providing answers to these socially important product questions."

Organics Unlimited offers POP materials, downloadable to retailer specs, from its website. "We also offer volunteer workweek trips to witness the GROW programs in action and see our farms up close in Mexico, to show retailers how their sales efforts are making a positive impact in these communities," says Velazquez de León.

Stores can merchandise bananas to multiple ages, socio-economics and ethnic customers. "Target all groups," says Bashas’ Flores. "The banana has appeal, pun intended, across all people groups."

Bananas are highly popular with all age groups and organic banana purchases cross all demographics, states Velazquez de León. "Organic bananas are a perfect option for health-conscious moms looking for the healthiest, chemical-free option for their families."

Rivero points to strategies for specific demographics that include marketing bananas to parents as a kid-friendly school snack and an addition to a breakfast or after-school smoothie, as well as to adults as an on-the-go, pre- or post-workout snack.

"With related messaging, retailers can implement geo-targeted marketing campaigns based on specific retail locations or zip codes or regional campaigns so ads target consumers who can find specific products near them," he says. "Since bananas are available year-round, retailers can include them in promotions throughout the calendar year."

Another reason bananas are so popular is because kids like them. "Kids will gravitate toward them," says D’Arrigo. "Make sure the banana display is a focal point for when the shopper has kids with them."

Dole reports having great success with third-party partnerships and co-promotions. "This is especially true when we focus on a campaign or initiative that attracts multiple banana-buying groups simultaneously," says Goldfield.

This year, Dole launched "Dole Healthy Heroes, Assemble!," a nine-month, empowered-living initiative with four phases of original Dole Banana stickers inspired by Marvel Super Heroes.

One highlight of the interactive assets was the Dole Banana Sticker Peel & Play Hero Book, a downloadable, printable digital piece available at Dole's website that encouraged Marvel fans to collect all 23 banana stickers featuring Marvel characters. "A new program is getting ready to launch this fall with new Disney-themed stickers, digital activities, downloads and recipes all around bananas," says Goldfield.