The late 1800s were a time of great expansion in the world of business. As exploding international markets began to reflect a growing middle class, goods that had thereunto been considered luxuries began to make their way into the grocery baskets of demanding consumers. This self defining market began to create an identity in the food they ate, separating themselves from the poor through their diet. Industrialization’s effects began to mature, and workers began to find that at the end of the day, they had some money left over to spend on things previously considered frivolities. Another change came about that began to sway the court of public opinion regarding health: general diet and what exactly it meant to be healthy. Into this ripe cultural climate there sprang an enterprise that would transform the course of history in Latin America, the Caribbean, and eventually the world. It started with a banana.
In 1870, Lorenzo Dow Baker, captain of a schooner and hailing from the old salt stock of Cape Cod, returned from a trip transporting gold miners to Venezuela. As was standard practice of the day, the enterprising captain kept an eye for possible cargoes with which to return to the United States. The standard for captains of the day was to cast about for sugar, rum, or tobacco, but Baker, strolling along a quay in Port Morant, Jamaica, discovered something else with which to fill his hold: a peculiar fruit, called the banana. After snagging the pile on the wharf, he sold them in Jersey City for a massive profit, which sparked further shipments (World Heritage Encyclopedia). By 1871, after joining forces with a Bostonian produce importer named Andrew Preston, Baker landed his first full shipment of bananas in Boston’s produce capital, Long Wharf. Demand for the fruit exploded (World Heritage Encyclopedia). He created a company, L.D. Baker & Co, in Port Antonio Jamaica in the late 1880s (Bartlett 1980). After meeting with wealthy Bostonian elites, a merger was agreed upon, and a new company was formed (Bartlett 1980). It was dubbed the Boston Fruit Company. The Boston Fruit Company enjoyed success as an importer as well as a grower selling from plantations it owned in the Caribbean. In fact, Andrew Preston was one of the first great minds to venture into vertical integration of the business supply chain. By 1895, the Boston Fruit Company owned forty thousand acres of land, across thirty-five plantations, and enjoyed deep water port access for its ships (World Heritage Encyclopedia). Given that most other planters in Jamaica’s banana breadbasket, Portland Parish, ran operations that averaged less the ten acres in size, the Boston Fruit Co. decimated its competition. The company purchased four fifths of the bananas its exporters produced, and a vast majority of planters fought to sell to them (Soluri 2006).
One marked effect the Company had in defining the modern multinational corporation is the setting of an industry standard for a good they specialize in. In April of 1890, the company sold one hundred sixty-three thousand bunches of bananas. Despite the time constraints presented by the rapid ripening of the fruit, these were not measly fingers of mold and mush covering the flesh. The standards the company imposed were high. Very high. In fact, it managed to change the definition of a bunch of bananas. If a bunch presented by a grower looking to sell contained fewer than seven hands of bananas, the going rate would drop dramatically. If the fruit was blemished, ugly, or small, it would not sell at all (Soluri 2006). By the late 1890s, that number had increased to nine hands per bunch. Growers were often unhappy with these standards, but the direction from the top came ringing loud and clear: ‘buy only full fruit, no thin fruit at all.’ Rates were also often seasonally dependent, adding the stymie facing local growers (Soluri 2006).
Adding to the general discontent of the growers, the ordeal of moving bananas to the wharfs where the Company would pay for them often damaged the fruit. The taxation situation in which roads were not provided to the workers to facilitate transport led to the signing and presentation of a petition to the Jamaican government, in 1882, at the Royal Commission. The discontent led Preston to opine “the successful company of the future is the one that controls the growing of its own fruit.”
In 1899, the Boston Fruit Company entered talks with the Minor Cooper Keith, and the two men produced the United Fruit Company, combining the production of the West Indies with the railway line plantations of Central America (Soluri 2006).
Bartlett, Randolph. 1980. “The Business History Review.” 54, no 3 410-411.
Kepner, Charles. 1935. “The Banana Empire; a case study of economic imperialism”.” Vanguard Press New York.
Soluri, John. 2006. “Bananas Before Plantations. Smallholders, shippers, and colonial policy in Jamaica 1875-1910.” Iberoamericana vol. 6, no. 23 143-159.
World Heritage Encyclopedia. “Boston Fruit Company.” World Heritage Encyclopedia, self.gutenberg.org/articles/Boston_Fruit_Company.