Top Banana

After decades of prosperity that made it synonymous -- often unfairly -- with Yanqui imperialism, United Fruit Co. suddenly found itself with a host of overripe problems in the late 1950s. In fact, concedes Herbert C. Cornuelle, 47, who last month became president of the world's largest banana grower and marketer: "The reason we look so good now is that it was awfully bad before it got better." As that appraisal guardedly suggests, United Fruit has made a rather striking comeback.

Away with Big Mike. The company's sales have increased from $304 million in 1960 to $440 million last year, while per-share earnings have soared from 250 to $3.06. This year's first-quarter earnings of $6,000,000 were the best in nine years. Behind its heady performance lies the fact that United Fruit has overhauled its top management. Not the least of the newcomers is Cornuelle himself, a one-shot novelist (his work, Mr. Anonymous, has been out of print since 1951*) who guided Hawaii's Dole Co. out of the doldrums before joining United Fruit in 1963. Similarly, his predecessor as president, John M. Fox, 54, now board chairman and chief executive officer, came to the company after a whirlwind success as founder and president of Minute Maid.

With the fresh faces have come a number of changes. Cutting overhead as well as appeasing native resentment over its huge land holdings, the company since 1960 has pared its acreage in Latin American banana lands from 134,593 to 81,089, has managed to increase output just the same. That feat is due largely to the company's development of the new Valery strain of banana, which endures wind, rain and disease better than the company's old Gros Michel (also called Big Mike) variety. Valery also gets a much higher per-acre yield. Even the Valery's biggest flaw has become a virtue: thin-skinned and fragile, it must be shipped in boxes instead of in on-the-stem bunches, and the necessary hand packing, while costlier, has made it easy to slap the company's Chiquita brand name on each banana.

As a result, the housewife can now recognize a United Fruit banana when she sees one. Taking advantage of that, the company has stepped up its advertising not only in the U.S. but also in expanding European markets. Chiquita herself has been appearing in European TV ads since January, though her old song ("I'm Chiquita Banana and I've come to say . . .") has not yet been aired there. Tightening up its European operations in general, the company hopes to increase its 35% share of Western Europe's banana market.

The Splits. For all its recent success, United Fruit still has some problems. Under a 1958 federal antitrust ruling, the company must divest itself of enough of its banana operations to create a new, competing company by 1971. That only dramatizes the company's overreliance on a single commodity; despite its other interests (including Revere Sugar, Tropical Radio Telegraph Co.), bananas still account for 65% of its business. Consequently, United Fruit last year acquired the J. Hungerford Smith Co. (manufacturer of soda-fountain syrups) and the A & W root beer-stand system, only last month bought up the Baskin-Robbins chain of franchised ice cream parlors. All this, management hopes, will keep United Fruit's earnings as rich as a banana split.

*His brother Richard has been in print more recently, having written Reclaiming The American Dream, a paean to the private sector, in 1965.

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