Summary
Barnana is an endeavor of a Brazilian entrepreneur who started this business by selling brown dried bananas in packages. Later on, due to the popularity of Barnana’s original products, the company expanded its range and added new flavors and products. However, the founder and the CEO of Barnana Caue Suplicy decided to hire an experienced executive who can help optimize the operations. Another challenge was finding an alternative packaging to the plastic and metal combination that Barnana used. Barnana is facing several issues, including the new CEO, organic packaging, the sale of organic fruit production, and an ethics problem.
Analysis
One issue that Barnana’s new CEO pointed out is the custom of marketing healthy food at a premium and selling it for a higher cost. The value chain analysis emphasizes the benefit of the consumer as the core value that the business should focus on when developing its products. Since Barnana is an environmentally conscious brand, which uses organic farming, the customers of Barnana are people who care about the environment and the impact that their food choices make. Hence, focusing on strategic changes, such as new organic products, organic packaging, and expanding the production is the key.
The cost issue voiced by the new CEO, Multari, is a concern, however, with food products, the scale of production matters. The more raw materials or services Barnana orders from suppliers, the more discount price they can receive. Since Dann notes that the organically farmed bananas are grown and gathered on a small scale on the South American farms, often by indigenous people, the issue of cost becomes even more apparent (2). With organic packaging, considering that the founder of Barnana researched but could not find an organic alternative to the #7 packaging and Horwath faced similar issues, one can assume that there is no large-scale organic packaging production. Hence, the costs for purchasing such packaging are most likely going to be higher when compared to traditional plastic and metal. Finally, the new plantain tortilla chips could not be labeled as an organic product due to the supply strain, raising an ethical dilemma.
Action Plan
As Barnana’s production continues to grow, they will be able to lower their costs due to the economy of scale. This can help address the CEO’s desire to produce organic food at the cost of regular food, but it will take time. Barnana should continue to research the organic packaging market and test out the alternatives to the packaging it currently has on its small products, such as individual bites. This will help resolve the value chain problem since this research and trial will show that Barnana remains environmentally conscious. On the other hand, the company will avoid having to invest heavily in purchasing new packaging, renegotiating the contracts with facilities, and educating the consumer.
As for the supply issue with the plantains, this issue is an ethical problem of profits versus sustainability. Both from the perspective of Barnana’s brand as an environmentally conscious producer and from the perspective of consumers, it is best to invest in new organic plantations and wait for several years before launching their new product. This is a good solution because consumers who purchased Barnana’s previous products may be confused by a new offer that is not organic and questions the environmental focus of the brand. Moreover, Barnana has received the Benefit Certification with a score of 82, and using nonorganic plantains for new production may threaten this credential as well.
Reference
Dann, Jeremy. Barnana: Adventures in Upcycling. Lloyd Grief Center, 2020.