Disaster recovery and resilience: Sweeter Banana Co-operative

This case study was developed as part of the BCCM report, Primary producer co-operatives: The beating heart of community resilience and recovery.

Carnarvon, WA was the first place in Australia in the 1840s where bananas were grown. Now, thanks to the co-operative, Carnarvon is recognised as the region producing Australia’s sweetest bananas. In 2002, a group of growers formed the Sweeter Banana Co-operative. The idea was to develop a recognisable brand so that Western Australian consumers could identify and purchase as their banana of choice - the Carnarvon Sweeter Banana.

The Sweeter Banana Co-operative invented the “Original Lunchbox Banana™” to differentiate their bananas from Tropical North Queensland bananas. Their custom branded bags serve a dual purpose; one is branding to ensure that consumers know they are buying a genuine Carnarvon Sweeter Banana, and the other is to protect the thin-skinned bananas from damage in the shops.

The co-operative was formed in response to the local market failure due to the nationalisation of the banana market in the 1980s, reduced freight costs and rising production resulting in increased competition from North Queensland growers. The WA banana industry was not doing well. Whilst some major retailers would take Carnarvon bananas; others did not wish to deal with multiple smaller growers. The formation of the co-operative allowed for a direct supply contract - smaller growers had no chance of getting into the larger market without it. After the co-operative was established, the other major retailers started to buy Sweeter Bananas and have become the co-operative’s biggest customer.

Establishing the co-operative also allowed for professional staff to be employed to undertake marketing, contract negotiations and sales whilst providing transparency and accountability to members.

They also formed to pool resources and invest in a centralised packing shed for growing to consolidate packing costs and distribute under the unified Sweeter Banana brand.

They have an annual membership fee of $1,000 and a members’ charge per packed carton of bananas. Profit is mostly rebated back to members with a small amount used for the expansion of the co-operative.

The co-operative is owned and operated by 18 farmer members, all on family run farms on the Gascoyne River banks. These farmers are 18 of the 50 banana farmers in the region, however they are responsible for 50% of the banana production. The whole region of banana producers benefit from the awareness that the Sweeter Banana brand brings to the region, not just the members.

Sweeter Bananas are smaller and take over 18 months to grow, much longer than the fast growing varieties in North Queensland. This makes growers vulnerable to significant loss if they lose a crop to a natural disaster, such as cyclone. Cyclone Olwyn destroyed 100% of the crops in March 2015. This was a big hit to the co-operative. Thankfully, the members were covered by The Banana Trust Fund in Carnarvon which was established in the 1960s by the government and agricultural industry to provide pay-outs based on what they lost. As a mutual response to risk, the Trust is self-funded by growers with oversight by the government. This payout was about a third to a half of what the growers would have achieved at market. The industry learnt the value of the trust fund and increased their contributions to it from 25c per carton to 30c per carton after a previous flood event.

All these factors working together were enough to keep them afloat. The co-operative packing shed was damaged, but this was thankfully covered by insurance.

The co-operative also added to the recovery by supporting the clean-up, clearing trees, replanting, fixing irrigation. They checked in with growers and started planning for future production. Because growers and co-operatives were able to access payments there was a lot less stress. Farmers went back into planting within two to three days after the cyclone. The co-operative communicated with purchasers to ensure that external stakeholders would know that the industry would come back and ensure that market access was not lost.

The co-operative focused on working outside of the farm on communication with retailers and marketing so that the farmers could focus on rebuilding their farms.

The co-operative members maintained their morale by getting together once a month at a member’s farm for a BBQ and to look around the property. This allowed growers to talk about their losses, share a sense of community, and have the confidence that the co-operative would remain waiting for them to get back online.

The co-operative’s Business Manager, Doriana Mangili, engaged the media to ensure that their story was told, and to safeguard the continuation of their retail market share with their customers. On behalf of the growers, she worked to ensure that customers would buy the next crop of bananas when they were back.

The Government reached out to involve Sweeter Banana due to the strength of their brand. They allowed the growers and members to contribute to government policy through a single focal point, and a representative giving them a seat at the table. It is more attractive for government to negotiate with one representative of a broader group. This gave the independent growers a voice which would not have had without the co-operative.

The co-operative had also built a fund putting aside $50,000 per year internally for disaster events to cover the rent and wages of the packing shed operations. These factors working together enabled every grower to return to business after the cyclone.

The cyclone recovery revealed lots of lessons around marketing. Losing presence in customer’s daily shopping for 18 months greatly impacted the speed of their return once production was back. There was a need to relaunch the product with retailers, and to greatly increase marketing investment.

The long term planning, undertaken by the co-operative, helped growers deal with the cyclone disaster in addition to responding to fruit picker shortages after COVID hit.

Small growers have limited capacity to do long term planning or to set aside a substantial enough “rainy day” or resilience fund.

Further initiatives to increase resilience have included selling banana bread and smoothie bananas at Coles to reduce the banana wastage and to increase surplus.

The co-operative is planning for the sustainability of their operations by leasing land from two members who are nearing retirement. Their combined land holdings represent 25% of the co-operative’s production.

Lessons from Sweeter Banana

Sweeter Banana is a producer owned co-operative that leverages group buying power and a shared packing facility to jointly market and distribute their product. This model can be applied to many primary producers in a region that produce the same or similar products. The potential to streamline costs, reduce risk and work together to increase and secure customers stands out as a model that many primary producers can use to reduce market risk.

In addition to reducing market risk, this model improves resilience to disasters and crop failure as the members were able to work together to replant following a cyclone whilst the co-operative worked to keep their customers and provide financial and emotional support.

Working together, instead of in competition with each other, in a transparent and equal manner raises up the whole region and has resulted in Carnarvon being well known for its sweeter bananas.