Bananas used to be sweeter, creamier, longer-lasting, more resilient, and not require artificial ripening. This was because the dominant variety that used to be grown by commercial banana plantations, the Gros Michel, was for intents and purposes a better fruit. However, the Gros Michel was devastated in the 1950s by Panama Disease, a fusarium wilt that is a soil-borne fungus which attacks the plant's roots. Though fruit companies tried to move their plantations across Latin America, the blight followed and Panama Disease had wiped out the Gros Michel from every export plantation on the planet. By 1965, the Gros Michel was declared commercially extinct and the banana industry was forced to switch to the Cavendish variety, which was an inferior product but was immune to the disease.
Disease and insect damage are more problematic for bananas compared to other fruits, because they are sterile and seedless mutants made from cuttings of existing plants, which means they do not have the natural diversity that comes from sexual reproduction. The Cavendish makes up 95-99% of global banana exports and is a monoculture, which means it is the only variety that commercial growers plant every year; thus a disease that infects one plant can infect them all. Bananas are grown in more than 150 countries and 150 million tons of fruit are produced each year; banana exports make up only $8.9 billion of a $44.1 billion industry, and the fruit is the fourth-most valuable global crop after rice, wheat, and milk. Nine-tenths of the world's bananas are eaten in poor countries, where 400 million people rely on them for 15-27% of their daily calories.
The Cavendish is being threatened by a strain of the Panama Disease known as Tropical Race 4 (TR4), which cannot be controlled by fungicides. TR4 is capable of killing 80-85% of global banana output, it's highly contagious and leaves behind long-lasting spores, and plantations cannot get rid of it once the soil is contaminated. While TR4 started out in Malaysia, it has since spread to Australia, the Philippines, Mozambique, and Jordan. TR4's spread is problematic for East and Central Africa, where over 50% of permanent crop area is under banana cultivation and accounts for half the African total, with an annual production of 20.9 million tons valued at $4.3 billion. While many such bananas are not Cavendish, most of these local varieties are still under threat from the disease. If the disease migrates to the Americas or western Africa, the results could be devastating for fruit companies such as Del Monte (NYSE: FDP), Dole, Chiquita (NYSE: CQB), Fyffes (LON: FFY), and Noboa. As bananas are the most frequently bought grocery item in the United States, a future rise in banana prices may have an effect on grocery stores' volume sales and profits. Routine purchases such as bananas will have a disproportionate effect on consumers' perceptions if prices are raised, and the changes entailed with the replacement of the Cavendish variety may affect consumer habits in other, unforeseen ways. Thus, supermarket stocks such as Kroger Co (NYSE: KR), Casey's General Stores Inc. (NASDAQ: CASY), and Weis Markets Inc. (NYSE: WMK) may be adversely affected in the future.
Fruit companies are researching fungicides that might be able to control TR4, but efforts have not been successful thus far. Hybrids and genetically modified bananas are being considered as replacements for the Cavendish. Honduran scientists have created a fungus-resistant variety that could be grown organically, while Bioversity International has been working with Philippine partners to test a type of Cavendish discovered in Taiwan called GCTCV 219, which mutated to resist the disease. The problem with developing or discovering new varieties will be adoption and implementation in the field; the reason why the Cavendish is so dominant is because uniformity keeps production costs low. Measures to prevent further spread of TR4 and contamination of farms or container yards might reduce the speed of transmission, but fruit companies will likely have to find some alternative to the Cavendish soon.