Fyffes Plc History

Address:

1 Beresford Street
Dublin 7
Ireland

Telephone: (+353) 1-809-5555
Fax: (+353) 1-872-6609

Public Company
Incorporated: 1888 as E.W. Fyffe, Son and Co.; 1902 as Charles McCann Limited
Employees: 3,595
Sales: EUR 1.69 billion (US$1.79 billion) (1999)
Stock Exchanges: London
Ticker Symbol: FFY
NAIC: 111336 Fruit and Tree Nut Combination Farming

Company Perspectives:

Fyffes' principal objectives are: To increase the Group's revenues and earnings based on the growing worldwide demand for fresh produce. To continually find better ways to work with its suppliers, increase efficiency and meet its customers' needs. To maximise the returns earned by shareholders on their investment. To provide interesting and fulfilling careers for its people. Key Dates:

Key Dates:

1888:: Edward Fyffe begins commercial imports of bananas to the United Kingdom.
1890:: Charles McCann begins apple exports.
1897:: Fyffe forms Fyffe Hudson & Co.
1901:: The company merges with Elder Dempster and Company to form Elders and Fyffes.
1902:: Charles McCann opens store in Dunkalk.
1913:: United Fruit Company acquires Elders and Fyffes.
1929:: Fyffes introduces 'Blue Label.'
1956:: United Fruit Importers Limited is formed.
1958:: Torney Brothers & McCann is formed.
1965:: Banana Importers of Ireland is created.
1968:: Torney Brothers & McCann merges with United Fruit Importers Limited to form Fruit Importers of Ireland Limited (FII).
1969:: Elders and Fyffes becomes Fyffes Group Limited.
1981:: FII goes public.
1986:: FII acquires Fyffes.
1989:: Company name is changed to Fyffes Plc.
1996:: Company acquires banana business from Geest Plc.
1999:: Company acquires 50 percent of Capespan Holdings International.
2000:: Company launches worldoffruit.com web site.

Company History:

Fyffes Plc is one of the world's largest importers and distributors of fruits, ranking number five worldwide and number one in Europe. The company is also Europe's leading importer and distributor of bananas, which accounts for some 30 percent of its business. In addition to fruits, the company sources vegetables, flowers, and potted plants. Supporting the company's operations are its network of 100 storage, distribution, ripening, and other facilities, located primarily in Europe, a fleet of 17 company-owned or leased temperature-controlled ships, and its own land-based transportation fleet. Beyond its core Irish and U.K. base, Fyffes also has gained a strong share of the German, Dutch, French, Danish, Italian, and Spanish fruits and vegetable markets. Although the company's sales come primarily through its sourcing and distribution activities, Fyffes also has taken steps to secure a position for itself in the 'new economy.' In 1999, the company launched its worldoffruit.com web site and subsidiary, offering Internet-based business-to-business fruits and vegetables sourcing and information. That company is expected to go public early in the new century. In 2000, also, Fyffes has partnered with U.K. ingredients group Glanbia to launch the ingredientsnet.com business-to-business web site with a focus on food ingredients such as edible oils, fats, flour, and sugar. Fyffes is led by Chairman Neil V. McCann, grandson of one of the company's founders, and his sons Carl P., vice-chairman, and David V., CEO. The company posted sales of EUR 1.69 billion (US$1.79 billion) in 1999.

Going Bananas in the 1880s

The predecessor companies to Fyffes Plc both had their roots in the 19th century. Edward Wathen Fyffe was one of the first to bring commercial shipments of bananas to the United Kingdom in the 1880s. Fyffe had discovered the fruit while living on the Canary Islands, where he had accompanied his wife during her convalescence from tuberculosis. Fyffe decided that England was ripe for the exotic fruit and began commercial imports of bananas in 1888 through his company, E.W. Fyffe, Son and Co. Ten years later, Fyffe joined his company with another London-based green grocer supplier, Hudson Brothers, forming Fyffe Hudson & Co. Limited.

Fyffe Hudson continued to build up imports of bananas from the current and former British colonial islands. At the turn of the century, the company took a step to solve one of the largest difficulties in transporting bananas&mdash′eventing them from ripening during the voyage itself. A breakthrough in the banana industry came when it was discovered that maintaining bananas below a certain temperature inhibited the ripening process. At the turn of the century, Fyffe Hudson commissioned a ship outfitted with a cooling system developed by J & E Hall, and the company's first refrigerated vessel, the Port Morant, completed its maiden voyage between Avonmouth, England, and Kingston, Jamaica, in 1901.

That same year, Fyffe Hudson, which had been operating from its eastern England location, merged with the Liverpool-based Elder Dempster and Company, adding that company's western England port. The merger, which created the company Elders and Fyffes Limited, thus secured operations in England's two major ports serving shipping between the United Kingdom and its island colonies. The company went public, continuing to add to its fleet of ships and becoming a major importer in the English market.

Meanwhile, in Ireland, the other half of the future Fyffes Plc was making a name for itself in its own home market. The McCann family's involvement with fruit began in the 1890s, when Charles McCann began packing apples in stone barrels for shipment to Canada. By 1902, McCann had raised enough funds to open his own green grocer's store in Dunkalk, Ireland. At the same time, McCann began a relationship with the newly merged young Elders and Fyffes company, becoming the first to sell the English company's bananas on the Irish market. While running a retail store, McCann also developed a significant wholesale business, becoming one of the principal distributors of fruits and vegetables in the company's County Armagh region.

In 1913, the United Fruit Company, later known as United Brands and then Chiquita Brands International, bought a controlling share of Elders and Fyffes' stock. The American company quickly acquired the rest of Elders and Fyffes, establishing itself as the United Kingdom's leading banana importer. Elders and Fyffes continued to operate under its own name, and in 1929 scored a marketing coup when it became the first company to place its own label on its fruit. The famed 'Blue Label' soon became synonymous with bananas in the United Kingdom and inspired similar labeling practices across the world's fruits segments.

With the clout of its parent company behind it, Elders and Fyffes was able to build up its banana business to the extent that it had gained a de facto monopoly of banana imports to the United Kingdom. After the disruption of its business caused by World War II, Elders and Fyffes made the world's newsreels with its resumption of banana deliveries in 1945.

Yet, by the 1950s, Elders and Fyffes began to face increasing competition in its home markets. Among its new competitors was Geest Horticultural Products, which in the early 1950s decided to challenge Fyffes by launching banana growing operations in the Windward Islands. Geest succeeded in signing supply agreements with a number of the United Kingdom's rapidly growing supermarket groups, and it steadily imposed itself on the banana imports scene. By the mid-1960s, Elders and Fyffes had been forced to relinquish nearly half of the United Kingdom's banana market to Geest.

Elders and Fyffes also was seeing challenges from the Irish market. In 1956, Neil McCann, who had extended his father's Dunkalk business into the Dublin market, while adding banana ripening and distribution to its wholesale activities, joined with a number of other Irish wholesalers to form United Fruit Importers Limited, based in Dublin. Two years later, McCann joined with another group of wholesalers to form Torney Brothers & McCann Limited, which extended both companies' distribution and storage facilities in the Dublin area and expanded the two companies' distribution reach throughout Ireland.

In the mid-1960s, Torney Brothers & McCann and a number of other banana importers, ripeners, and distributors in the region--including Charles McCann Limited of Dunkalk and Red Diamond Limited of Cork--set up their own banana supply company, Banana Importers of Ireland (BII). The new company, founded in 1965, further undermined Elders and Fyffes' market share in Ireland as BII offered direct shipments to Ireland's ports, cutting the costs of bananas for BII's group of ripeners and distributors.

If Elders and Fyffes saw its overall market share shrinking, it was comforted by seeing that market undergo a strong expansion as consumer demand for bananas raised the fruit to one of the most popular in the U.K. market. Nonetheless, the company saw fit to diversify its operations in the early 1960s. The purchase of George Jackson & Co. Limited in 1964 gave Elders and Fyffes that midlands-based produce distributor's business, extending Elders and Fyffes' range of business and reducing its reliance on bananas for the first time. Four years later Elders and Fyffes bought George Monro Limited, which added that company's fresh fruit and vegetable distribution activities. The purchase led Elders and Fyffes to change its name to Fyffes Group Limited in 1969.

By then, Neil McCann had assumed leadership of Torney Brothers & McCann operations and steered the combination of that business with United Fruit Importers Limited. The merger of the two wholesalers groups created Fruit Importers of Ireland Limited (FII) in 1968. Under Neil McCann, FII began to consolidate much of the fruit importers market in Ireland, before turning to the greater U.K. market in the 1980s.

Big Banana for the 21st Century

Among FII's first acquisitions was that of Connolly Shaw Limited, which brought that company's importer rights to the Jaffa (Israel) and Cape and Outspan (both South Africa) fruit brands. The company extended its penetration into southern Ireland with the acquisition of Southern Fruit Suppliers Limited, based in Waterford, Ireland, in 1971. The following year, the company acquired Shell & Byrne Limited, adding that company's supplier relationship to the Five Star grocery chain, as well as its imports of apples and onions from the United States.

In 1973, FII completed two more significant acquisitions, adding the Kilkenny area to its operations with the purchase of Philip Lenehan Limited, then boosting its banana business with the purchase of Red Diamond Limited. A number of other acquisitions followed through the 1970s, including Munster Fruit and Produce Limited in 1974, extending the company into the Kerry and West Cork areas. In 1977, FII's subsidiary McCann Nurseries, which grew apples and tomatoes, formed the Green Ace Produce Group to pack and sell EEC-regulated apples and tomatoes.

Neil V. McCann succeeded his father as CEO in 1979 and stepped up FII's growth. In 1980, FII--still known as Fruit Importers of Ireland--merged operations with those of subsidiary Charles McCann Limited under a new holding company, known as FII Limited. The following year, the company sold 25 percent of its shares to an outside investor group, Development Capital Corporation, setting the gears in motion for the company's public offering, completed in February 1981, on the Dublin stock exchange.

The public offering gave FII the capital to begin a series of acquisitions through the 1980s that helped it grow into one of the ten largest public companies in Ireland. Among the company's acquisitions for the decade were those of Uniplumo Limited, adding, in 1981, the importing, cultivation, and distribution, including retail operations, of house plants to the company's portfolio; the 1983 acquisition of Frank E. Benner, which added that Northern Ireland company's flowers, fruits, and vegetables trade; the acquisition of Daniel P. Hale & Co., based in Belfast, in 1984; and the acquisitions of Kinsealy Farms Limited and 50 percent of Gillespie & Co. in 1985.

FII's biggest score of the decade came in 1986 when it agreed to acquire the Fyffes operation from United Brands. The deal marked FII's first overseas acquisition, transforming it into one of the United Kingdom's premier fruit distribution groups. The transformed group also changed its name, becoming FII-Fyffes. The company renamed itself again, as Fyffes Plc, in 1990.

The company maintained its acquisition pace through the end of the 1980s and into the 1990s. Fyffes added Jack Dolan Limited and Sunpak Mayfield Fresh Produce Limited in 1988, Bernard Dempsey & Co. and J. Langan & Sons in 1989, and J. Grey & Son in 1990. Whereas these acquisitions remained centered primarily on the Irish and English markets, in the early 1990s Fyffes turned its sights on building a position for itself throughout Europe. The company added Erobanancanarias S.A., based in Spain, and Brdr. Lemcke A.S. of Denmark in 1993, followed by Velleman & Tas B.V. of The Netherlands, J.A. Kahl GmbH of Germany, Sofiprim S.A. of France, and finally Jamaica Banana Holdings Limited, all in 1994.

Not all of the company's acquisition attempts were successful: in 1992, Fyffes made an offer to buy out rival Del Monte for some US$500 million, an acquisition that would have catapulted the company to the top of the world's fruit distribution market. That offer was turned aside by Del Monte. Soon after, Fyffes itself became the object of a takeover offer, this time from another rival, Dole. Fyffes rejected this offer. Instead, with the war chest it had built up for the Del Monte acquisition attempt, Fyffes went shopping again. After picking up a new string of companies in 1995, including Angel Rey of Spain, International Fruit Company of The Netherlands, and J.W. Swithenbank Limited, the company joined with the newly formed Windward Isle Banana Company to acquire Geest's banana operations in 1996. This acquisition helped boost Fyffes into the world's top five fruit distribution companies, giving it two-thirds of the U.K. banana market, and a top share across Europe as well.

Neil V. McCann began to eye retirement, naming eldest son Carl P. McCann as Fyffes' vice-chairman, and younger son David V. McCann as chief executive officer. The younger generation continued the diversification moves of their father, as Fyffes sought to reduce its reliance on bananas. This was seen as especially important given increasing pressure from the United States to end a system of preferential tariffs that all but excluded so-called dollar bananas, grown in Latin America, from the European market, in favor of the more expensive bananas from the smaller plantations on the formerly European islands and colonies. The dispute, which later erupted into threats of an all-out trade war at the end of the decade, encouraged Fyffes to boost its distribution activities in other fresh fruit and vegetable markets, while the company also broadened its sourcing to include a good share of dollar bananas as well. Among the company's moves was the acquisition of a 50 percent share of South Africa's Capespan Holdings International, giving Fyffes a strong share of the fresh fruits market.

At the turn of the century, Fyffes turned toward the Internet, launching two web sites, worldoffruit.com, offering a business-to-business portal for fruit transaction and information, which went online in mid-2000, and ingredientsnet.com, a joint venture with the United Kingdom's Glanbia Group, offering similar business-to-business services to the food ingredients market. As more and more of the world's sourcing activity turned to the Internet, Fyffes' moves were seen as giving the company a strong position in the top ranks of the world's fresh fruit and vegetables distributors.

Principal Subsidiaries: Anaco International B.V. (The Netherlands; 50%); Angel Rey S.A. (Spain; 70%); Banana Importers of Ireland Limited (95%); Bernard Dempsey & Co Limited; Big River LLC (U.S.A.; 50%); Brdr Lembcke A.S. (Denmark; 50%); Daniel P Hale and Co Limited (U.K.); E & F Lines Limited (U.K.); Eurobanancanarias S.A. (Spain; 50%); FII Holdings Limited (U.K.); Frank E Benner Limited (U.K.); Gillespie and Company Limited (90%); Green Ace Producer Group Limited (92%); Greeve Citrus B.V. (The Netherlands; 50%); Hugh McNulty (Wholesale) Limited (50%); International Fruit Company B.V. (The Netherlands); J.A. Kahl (GmbH & Co) Munich (Germany); J.W. Swithenbank Limited (U.K.; 50%); Jack Dolan Limited; James Lindsay & Son plc (U.K.); Kinsealy Farms Limited; Padwa Group Limited (U.K.); Peviani Spa (Italy; 50%); Sofiprim S.A. (France; 50%); Sunpak Mayfield Fresh Produce Limited; Uniplumo (Ireland) Limited (85%); Velleman & Tas B.V. (The Netherlands); W J Pearson & Sons Limited (U.K.).

Principal Competitors: Chiquita Brands International Inc.; C.H. Robinson Worldwide Inc.; Dole Food Company Inc.; Fresh Del Monte Produce Inc.; Savia, S.A. de C.V.; Sunkist Growers, Inc.; U.S.A. Floral Products, Inc.

Fyffes Plc History

Company Perspectives:

Key Dates:

Company History:

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