General Information

Full-time employees: 21,000 Products:

Chiquita Bananas Chiquita Pineapples Chiquita Super Crunchy Fruit Chips Chiquita Bites Fresh Express Salads.

CHIQUITA BRANDS STRUGGLES

Attempts To Move Away From Banana Association

Frozen juice bars in 1987
Complete failure with costs of over $30 million

Line of exotic juices

Marginally better

Heavy investments in ad campaigns across US and other countries

People still mostly associate brand with bananas

Banana Association Affects Profits

Banana sales accounted for 98% of sales 1990s when banana production in Ecuador more than doubled increasing supply and forcing Chiquita Brands to lower their prices resulting in decreased marginal profits while debts where increasing. The devastation of Chiquitas banana plantation in Honduras and Guatemala in 1988 by Hurricane Mitch costing the company $75 million in damages. European Unions favoritism toward Caribbean, which diminished their European market share from 40% to 20%. Banana sales now account 60%

Lowest Point
1992 net loss of $284 million after a previous year net income of $128.5 million
(1) Poor banana quality (due to El Nio and outbreaks of banana disease), (2) the European Unions favoritism toward Caribbean bananas, (3) increased domestic competition, (4) heavy debt load and the resulting high interest payments.

Restructuration: cutting jobs, sale of assets, consolidation of operations, sale of their meat division, Numar edible oils group, and closed part of their juice operations The company continued to lose money well into the mid-1990s

Today
Recent change of CEO due to lengthy earnings decline. (Ed Lonergan) Profit fell to $6 million in the second quarter from $78 million a year earlier Net sales declined to $833 million from $870 million a year earlier Restructuring program with purpose o cutting costs and boosting margins ($60 million per year)

FINANCIALS

Financials Highlight
Net loss of $325.089 million in 2008 Incpme declined 37.19% from 90.808 million in 2009 to $56.836 million in 2011. Total sales revenues have been steadily declining with a 13.02% from 2008 to 2011. 5 year average total debt-to-equity ratio: 0.97 Current ratio: 1.6 A low return on assets (ROA) of -4.6% shows management is not being very effective at using company assets to generate earnings. A low return on invested capital -7.0% shows how bad the company is at using its money to generate return.

Chiquita Brands vs. Competitors

Yahoo! Finance 2012

SWOT
Strength Brand name Global market leader Goods sold in over 70 countries Allied with rainforest protection agencies (CSR) Weaknesses
Poor worker relations Numerous lawsuits Negative publicity due to payment of paramilitary groups Loss on investments trying to access European market Poor money management practices of the past make investors weary 37.19% decrease in net income from 2009 to 2011

SWOT
Opportunities
Quick snack ideas Healthy food craze Increased foreign investment in Asia Making good on improving working conditions in Central America Expansion of their prepackaged line of fruit to fast food restaurants in the US and other countries

Threats
Del Monte and Dole largest competitors Lawsuits for precarious working conditions Close out from European market due to subsidies given to smaller suppliers Deceased fruit and external environmental threats Worker protests that could halt operations and incur substantial losses