Would you pay more for ethical bananas?

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Jordan Heath-Rawlings Here’s a Friday challenge for you. Name me a food that hasn’t been hit by inflation this year. There are actually only a handful in this country, but one of them, almost every Canadian, buys it’s bananas. As the pandemic has raged and inflation has risen, the price per pound of bananas has actually fallen. And yet some Canadians are purposefully voluntarily paying more for their bananas than they ever have before. Why is that? The answer has to do with the long and abusive history of the banana industry, the relatively small price difference these shoppers are choosing to pay, and a little known Montreal company with a single goal a slick marketing team and a plan to make bananas better for everyone from the consumer to the farmers who grow and pick them. This is the story of how bananas sold in Canada are getting a little better bunch by bunch. I’m Jordan Heath-Rawlings. This is the big story. Deborah Aarts is the cofounder of Apid Inc. She is also a freelance journalist and reporter who delved into the lengthy and complex history of the banana industry and a feature for the Globe and Mail Report on Business magazine. Hello, Deborah.

Deborah Aarts Hi, how are you? I’m doing really well.

Jordan Why don’t you just start by telling me about Equifruit ? Who are they? What do they do?

Deborah Aarts Yeah, so Eequifruit is one of those beautifully simple on paper businesses. I like to call them like a Richard Scary company. You can understand what they do at a pretty easy level, and that is they are a small Montreal company that imports bananas. They bring in bananas so those bananas can get to the store so that you and I can enjoy them. What makes them different from all the other bananas that get brought into the store? Yeah, that’s where it gets a lot more interesting. So Equifruit deals only in fair trade bananas and that ladders up into what makes this company a lot more than just a simple food importer. They are a business that is operating on the principle that a small change in consumer behaviour related to the purchase of an everyday good can make a big impact to the people who produce it.

Jordan So we’ll get into the strategy behind that and why they do it. But first, fair trade bananas. Why does the world need fair trade bananas? I know there have been books written about the history of the banana industry, so you don’t have to explain the whole thing. But what has traditionally been wrong with the way bananas are brought here and sold?

Deborah Aarts Yeah. Where to begin? When I started working on this story, I had kind of a vague notion that the banana industry traditionally has been kind of icky and not really understanding why. And we could do like a whole Ken Burns style deep dive into the history of what is wrong with that business. Ultimately, it comes down to a lot of maneuvering, political and or otherwise. There’s coups, the CIA, wars over land, things like that, over many, many years. But it’s premised on the notion that land is very, very cheap and the labor that produces the bananas that we eat in Central and South America is also very, very cheap and there is minimal environmental oversight. That’s how the kind of banana industry as we know it kind of came to be many decades ago. Now, a lot of the major players in the banana business have made a lot of strides to improve that. It’s certainly not as problematic as it perhaps once was, but it is still an industry that is premised on the fact that we in North America should pay very, very little for something. And that comes at the expense of the wages and compensation of the people who produce it halfway around the world. And also, in many cases traditionally with very little oversight into things like workplace safety conditions and environmental issues. To sum it up, it’s premised on a lot of devaluation of things that we as consumers don’t always think about. And it’s something that’s very easy not to think about when we are at the grocery store and are used to getting our bananas for a very, very cheap price.

Jordan For listeners who are looking for a reference point, how different is this from the rise of fair trade coffee a decade or so ago? Is it kind of the same concerns about the way it’s produced and the price that it goes for?

Deborah Aarts It is, and that’s kind of a fascinating comparison as well, because coffee is something that is I don’t want to call it a luxury item, I drink it by the gallon. So it’s something that is a commodity very much in my life. But it comes at a higher price point. I mean, people don’t think much about paying $14,$15 $16 for a bag of coffee beans. The difference is that bananas have always been something that we have been conditioned to pay a lot less for. So you know, the kind of impetus behind it in terms of you pay more to ensure that the people producing it get a fairer shake, it is very similar. The difference comes to what those actual numbers are. Let’s talk about that then, because you’ve mentioned it a couple of times, I think in your piece you called bananas kind of the perfect fruit.

Jordan Why is that and what do they typically cost? And how are Equifruit fruits different in terms of a price point?

Deborah Aarts Yeah, well, bananas are in many ways a very, very perfect food. They’re nutritionally very strong from a packaging point of view, amazing. They come in their own packaging. You don’t have to deal with any plastic or wrappers or anything like that. They travel pretty well. A lot of fruit grown in the tropics is a lot more complicated to travel and bananas, you can pick them green and they get here and still taste good for families, especially. And for a lot of people, it’s a really good way to get a lot of nutrition in your grocery cart for not a lot of money. And I get this. I mean, I have two children. We go through a lot of bananas. And I think and I could ask you the same question, I’m sure you probably add them to your cart every week without even thinking about it.

Jordan I do, but only for my daughter, not for me, because I actually this is a bad time to admit this. I hate bananas.

Deborah Aarts That’s okay. This is a safe space to say you have like, all fruit. That’s fine in terms of the actual dollars. So I’ll give you the example of what I experienced going to what is admittedly not a discount grocery store. I went to my local farm boy when researching this story, and there were your typical Chiquita bananas. They were seventy nine cents a pound. And across the aisle, the echo fruit options were dollar 29 a pound. There is a fairly big difference in that price. If you’re looking percentage price difference. Where it gets interesting is on a few levels. First of all, this is kind of where we get into what I call I like to think about it as kind of like gas station economics. So there used to be two gas stations across the road from each other, and one was always a little bit cheaper than the other by my house. And there was always a line up for the one that was maybe cheaper than the other one. And the more expensive one, you could always roll right in and get your gas materially. When you’re buying a tank of gas that ladders up into maybe a dollar or whatever it might be, into your tank of gas. It’s not a huge difference in that regard. But psychologically, the people lining up, they’re thinking, okay, this is a bargain, and it’s worth the time to wait in line for this because they want to get the lowest price for it. And I think that’s kind of similar pricing imperative that play for most people when they’re buying their bananas. If you compare to something like apples, I should preface, is all saying like, we’re in food inflation era, we’re all paying more for groceries than ever. But over the past 25, 27, 30 years, the price of apples in a Canadian grocery store has gone up by almost adjusted for inflation, by almost 35%. And those are usually produced a lot closer to home. And there’s a lot of other reasons for that. Bananas have gone down in price relative to inflation over the same time period, by about 25%.

Jordans So that’s kind of what made the difference, and it’s kind of what made the story kind of come to life to me is like why are they getting cheaper? And why are we so used to this? How do they get cheaper over that long a time period? Is it just because we’re so used to sadly taking advantage of South American conditions to keep prices low?

Deborah Aarts Yeah, there’s a few reasons for that. Partially that. Partially it is the major conglomerates who dominate the industry have a certain buying power and certain market share that they can pass that along to. But there’s also kind of a but, you know, they’re not what you would call a loss leader in the grocery space per se. The grocery stores do make money on it, but it does tend to be an item that they showcase and that they compare. If you go into your grocery store, you’ll often see that they have certain staple items in their price for it up on the wall, like your loaves of bread or milk. Right. The price of bananas is usually there. So it is something that grocery stores like to broadcast to bring people in to showcase the prices that they’re able to offer. And it is kind of a calling card of sorts. And there’s a certain kind of competitive nature there too, is that if one is doing it, the others will follow suit as well. So that’s kind of how we get there as well.

Jordan How do you promote and market something that is sustainable, something that is better for the environment or better for workers, but is more expensive? There’s a bigger picture here. We’re going to have to do this with a lot of goods and commodities as climate change and inflation continue to go. So how do you get a customer in a grocery store to stop, look at the chiquitas, look at the Equitrades and decide to pay almost double for their bananas? How do you do that?

Deborah Aarts Yes. And this is where we get into put our Dawn Draper hats on. It’s a marketing challenge, and any marketing challenge is about changing consumer perception and getting them to understand things and think about things in a different way. Ideally the mode to persuade them to make a change in purchasing choice. A lot of traditional fair trade marketing leans heavy on what I would call earnestness and guilt or classify as those you’ve all seen the this is for your good. This is eat your vegetables, it’s for the good of everyone else. You’re making a difference in the world. And I mean fundamentally, the difference that they’re selling here is that these bananas cost more because Equifruit A pays the people producing bananas more. And they also have what they call the fair trade social premium. For every box that sold, they donate us $1 that goes into the community and that goes to reinvest in safe working conditions and all sorts of sustainable production tactics. This is similar to what you would see in most payer trade products. So equipment could have done that and could have gone in that route. Instead, they decided to go totally bold. They worked with an agency based in Montreal called Tux. You know, the agency kind of came back to them and said, we’ve got some options here. We have some ideas. We could go kind of earnest, we could go bold, we could go a little bolder, or we could go like boldest. And they all kind of agreed to go all in on boldest, which means they’ve got these bright colors on their marketing and in their signs. They use these kind of meme worthy kind of ways of grabbing attention, if I can classify it as that.

Jordan Give us a couple examples if you could.

Deborah Aarts Oh, one is like they say, like, this is the only bananas that sharks eat, or things like that. These totally bold claims that are kind of like make you scratch your head and think, what are they talking about here? But they’re bold enough that in that little one inch band that has to be on all the bananas that they sell, it kind of catches your attention a little bit and thinks, what are they talking about here? Then direct you to a QR code and you can go to their website, which is full of all sorts of stuff on social media. They’ll do things like they’ll take a lot of popular memes and add bananas in it. They’ve got a really strong graphic content and that they use a stylized banana everywhere. The colors are not what you would normally associate with what I would call like the crunchy granola aisle. They’re cool colors. They’re very millennial friendly or gen friendly and all those things. They kind of take a fun and cheeky attitude to this with a real element of peaking curiosity above everything else. A lot of what they say doesn’t have anything to do directly with the banana business, but it’s enough to catch your attention and make you think, I want to learn more. And that’s what’s needed. They need to inject that moment of, I should think about this. Everyone that I’ve spoken with since then, when they think, oh yeah, bananas, I never really thought about that before. And once they think about it, most people think, yeah, that makes sense. It makes sense to pay a small premium on this item if it means it’s going to be more sustainable and fairer to everyone. Most people generally are in agreement with that. The problem is they haven’t really been triggered to make those connections before. So they differentiated themselves that way. And then they’ve also had some support from some retail partners that I think has helped them to kind of make the inroads that they are needing to make.

Jordan That was going to be my next question, which is how many inroads have they made? Like, do we have an idea of what stores they’re in, what percentage of stores, what their market share is, how are they doing?

Deborah Aarts Yes, they’re doing well. The reason I was writing this story for Rob magazine is that equifruit had a spot on their annual Canada’s top growing company’s ranking, so its sales over the last three years have more than doubled. So is doing well in that regard. They’ve made some significant inroads. They’re in some chains, they’re in Costco, they’re in farm boys and in Sobee banners or the kind of full service sobes banners. And the most significant kind of get for them, if it’s fair to classify as that is that Long Goes, which is a chain of grocers in and around the greater Toronto area, went all in on Equifruit. So you can’t get non fair trade bananas there. You can’t get non fair trade bananas either organic or what they call conventionally grown at Long Go skin. What’s been interesting, I spoke with someone from Longos for the article and since they made the switch just over a year ago, they haven’t seen any drop in demand at all and they’ve had almost no complaints about the change. I think most people really didn’t even notice. Is that because it’s such a low price point anyway. That people and again. We want to be sensitive to the fact that everybody is having a hard time with their grocery bill these days. But it’s a little bit different from fair trade coffee or other kind of equitable products where you really feel like. OK. This is going to cost me five or $10 more. Like I really better want to. Whereas this is like.

Jordan Okay. I might add up to a buck or two over a banana. Over a bunch of bananas.

Deborah Aarts Yeah, exactly. So I think that’s exactly spot on. We’ve all seen some increases in prices that are truly like sticker shock in the last couple of years and this is not the kind of change that’s going to materially affect a typical person’s grocery bill. So I think that’s part of why this is a fairly good category to experiment with this in for a grocery chain. But it is a complicated and this again speaks to the marketing challenge that they’re solving. This is an era of food inflation. Everyone is very attuned to paying more for food and there are some very real problems around that. But I think it also speaks to how effective they have been that ECA Fruit has been able to make these inroads during such a challenging time for food inflation.

Jordan So what’s next for them? Obviously continue to grow, try to get the fair trade bananas in more stores, but it’s Equifruit, not equibananas. Do they have plans for another fruit beyond this?

Deborah Aarts Yeah, I talked to the founder, Jenny Coleman, about this and she said they’re on the radar for some other fruits. They have mangoes inside, I think, and perhaps a few others, but they still see quite a lot of upside in the banana space. First of all, people just buy a lot more bananas. I’m not sure if I mentioned it too. It’s by far the most popular fruit that Canadians buy, more than almost I think it’s twice as many as we do apples, which is next in line. We buy a lot of bananas, and currently in Canada, I think the fair trade market in general, not necessarily just aqua fruit, but fair trade bananas comprise only I think it’s two or 3% of all bananas sold. There’s a lot of room to grow that. There’s a lot of places in the world where that’s a lot higher, and I think that’s kind of the model that Equifruit will be following. I think in Switzerland, more than half of bananas are fair trade. In the UK, it’s like 30%. In Germany, I think it’s around 20%. And that’s all the results of grocery stores doing kind of what Longos did and going all in on this and making it. Those kind of policies have been key to driving that. To answer your question there’s, I think, a lot of upside and a lot of ground. Again, within Canada first, and that seems to be the priority before the company starts looking into extra or different types of fruit.

Jordan Did you actually do like a comparative taste test between the two kinds of bananas?

Deborah Aarts I sure did, yeah. And I’ll confess I’m sitting on my counter right now with the aqua fruit ones, and I can’t say there’s any real difference in taste. I’ll tell you, I felt a lot better eating it, which I am someone who is very much motivated by that kind of feeling good about myself for something that is a little decision. So I felt pretty righteous and good for doing that, and that helped make me feel a lot better about it. But if I’m being realistic, I don’t know that I tasted any real difference. There’s no real difference in the elements of taste of this banana other than that the people who made it got paid a lot better and you feel better having eaten it at the end of the day. And we could all use a little bit of that sometimes, couldn’t we?

Jordan Indeed. Thank you so much.

Deborah Aarts Absolutely. My pleasure. Thank you very much.

Jordan Deborah Arts writing and the Globe and Mail report on Business magazine. That was the big story. For more from us, of course, you know to go to the Bigstorypodcast CA and in fact, hundreds of you went there last month to fill out our listener survey. We will present some of the results from that survey to you in a bonus episode in a week or two. You should also be aware that we’ll be implementing just a few changes to this program. Nothing major. You all said you like us, which is great, but one of the things you asked for was a little bit more variety in these outros, which is only fair. I can only say the same number and email address so many times before, even I get bored. So we’re looking at a few different ways to do that, including reader feedback, updates on old episodes, and maybe a few fun things tossed in once in a while. What I can promise you is we will add no more than 60 seconds to the length of each episode. We promise not to become one of those podcasts that lets the host drone on and on when the credits should be rolling and you should be moving on with your life. Have a great weekend. Stay safe. This is me ending on time. Thanks for listening. I’m Jordan Heath-Rawlings. We’re off for Thanksgiving on Monday, so we’ll talk Tuesday.