Potential price hikes at the grocery store unrelated to tariffs or even inflation? In this economy?
Yes, it’s bananas. No, literally: this story is about bananas.
Fruit giant Chiquita is one of the top brands leading the global banana industry, and its bananas are sold in 47 countries, including Canada, according to its most recent sustainability report. And Canada maintains a steady import supply of the popular and generally affordable fruit, according to Statistics Canada.
But now, a labour dispute at Chiquita’s Panama location could potentially mean fewer bananas and higher prices at the grocery store. Experts say it highlights the fragility of the global supply chain and how global events can affect what is available at your local stores.
Chiquita is the largest supplier of bananas to the U.S., and Panama is the largest banana-producing country, so there will be an increased demand in the U.S. for other banana sources such as Dole, said Michael von Massow, a professor of food agriculture and resource economics at the University of Guelph in Ontario.
“It could mean fewer bananas in Canada, which could raise the price,” von Massow told CBC News.
Imported bananas are generally ripened in Canadian distribution centres, which means the situation in Panama won’t affect inventory right away, von Massow explained.
“But it could be relatively quickly that we start to feel the impact of the removal of those bananas from the marketplace.”
Despite a dip in Canada’s overall inflation rate, food prices continue to climb, with some products like beef up roughly 16 per cent. Experts point to a combination of the U.S.-Canada trade war, a weak loonie and North American droughts reducing cattle herds.
Chiquita fires Panama staff amid strikes
On Monday, Panama’s labour minister said Chiquita Panama’s administrative staff have left the country and the firm will seek authorization from the government to fire its remaining personnel in Panama.
Last month, the company fired about 5,000 of its approximately 6,500 employees in the country in response to a strike at its banana farms that began in April.
Thousands of banana workers have gone on strike as part of a broader strike action across Panama. Protests and roadblocks have stretched across the country as workers, including teachers, construction workers and other unions march to protest several issues including a social security reform they say will affect their future pensions.
Panamanian President Jose Raul Mulino called the strike illegal and illegitimate.
In late May, Chiquita Panama estimated its losses from the strikes at around $75 million US.
Unions and NGOs have decried the firings. On Friday, Washington-based NGO Global Labor Justice called on Chiquita to “immediately reinstate” its farm workers in Panama, calling the move retaliatory. The International Union of Food Workers said it had “grave concerns” about the firings.
Still, in terms of the impact on consumers, the banana market isn’t monopolized, said Joel Gregoire, associate director of food and drink at Toronto-based market intelligence agency Mintel. Major players like Dole and Del Monte are also in the space.
This “makes it difficult to imagine a scenario where Canadian shoppers can’t find bananas at all,” he told CBC News.
“If the labour disruption continues for an extended period, it could create an opportunity for other companies to gain market share in Canada.”
‘Any disruption’ likely to be noticed
The COVID-19 pandemic highlighted the fragility of global supply chains for many shoppers, Gregoire explained. Now, with the fluctuating tariff landscape, consumers are once again being reminded of these vulnerabilities, and he says the situation with Chiquita could serve as another (albeit smaller) example.
“Bananas are a staple for many households, and any disruption in the supply chain is likely to be noticed, particularly at retailers that rely heavily on Chiquita as a supplier,” he said.
As Statistics Canada notes, bananas have been generally less expensive compared to other fruit. In April, for instance, the average price for bananas was $1.66 per kilogram. Apples, by comparison, were $5.85 per kilogram, oranges were $4.56, and pears were $5.14.
They’re also popular. Bananas topped the list of all fresh fruits available for consumption to Canadians in 2023, measured by Agriculture Canada in kilogram per person, making up 21 per cent of the total share of available fruit (followed by melons, apples and oranges).
In 2023, bananas were the third-most imported fresh fruit into Canada by commodity, coming in just behind grapes and strawberries.
Food analysts were already expecting some long-term disruption to global banana production before Chiquita’s labour dispute, von Massow said, pointing to climate change, increased extreme weather and diseases affecting banana crops.
“There are a variety of risks in the supply chain, and any one of them can rear their head and cause a short-term disruption.”
Not just bananas, but coffee, too
Meanwhile, another dispute (and another hit to your breakfast) is also highlighting how global events can affect what’s available on store shelves.
Shoppers at Loblaw Cos. Ltd.’s stores will soon no longer be able to purchase Folgers-brand products after a pricing dispute prompted the grocer to pull them from its shelves.
In an email sent to retailers on Wednesday and viewed by The Canadian Press, Loblaw said it decided to delist all Folgers products after talks with the coffee maker’s manufacturer couldn’t solve the impasse.
Folgers is owned by Ohio-based J.M. Smucker Co., which raised the price of its coffee offerings both last June and October in response to higher costs it is facing.
In February, the company attributed a small rise in its net sales in the domestic retail coffee segment — its biggest revenue generator — to the higher prices of its Folgers and Café Bustelo coffee brands. President and CEO Mark Smucker told analysts on the company’s quarterly earnings call that more coffee price increases were likely on the way.
Loblaw spokesperson Catherine Thomas told The Canadian Press that Folgers’ proposed cost increases were “unreasonable and unjustified based on underlying costs.” She said that Loblaw expects most of its stores to be out of stock of Folgers products over the next week or two.
Experts say higher coffee prices are in part due to recent extreme weather and changes in temperature, which have caused some producers to experience lower yields.
Gavin Fridell, a professor of global development studies at Saint Mary’s University, told CBC News Manitoba last month that coffee prices globally are the highest they’ve been in over 50 years because of droughts and dry conditions.
