How serendipitous discovery combined with out-of-the- box thinking has made Diana’s Bananas a “world’s best” business.

A funny thing happened while Bob Carmody was helping out at his family’s booth at the 1984 Taste of Chicago food festival. His father-in-law, a successful candy retailer who was selling chocolate-covered strawberries, casually picked up a banana brought in as a snack by one of the crew and stuck it into the dry ice they were using to keep the berries cool—just to see what would happen. When it froze solid, he dipped it into the melted chocolate. The chocolate froze, too, and at that point he gave it a try. He called his daughter and business partner Jeanine over for a taste. And they both knew that they had stumbled onto something special. Jeanine immediately sent Bob out to the supermarket to buy bananas, and they quickly became a hit. Over the next few days, Bob became a familiar sight on his banana runs, and, by the time the Taste ended ten days later, 25,000 of the frozen chocolate-dipped treats had been sold!

Bob and Jeanine turned Diana’s Bananas into a hobby business, selling them at street fairs during the summer. One day, a family of fans approached them with a cooler, explaining that they wanted to take a bunch home for the kids to enjoy during the week. “You know,” the dad said, “if these were available at the supermarket, I would definitely buy them.” Bob and Jeanine looked at each other and hatched a plan.

They looked up the address of supermarket chain Jewel Foods and drove out to corporate headquarters, dressed up and with plenty of samples, but with no appointment and no idea how the process worked. The other sales reps waiting in the lobby snickered, but the receptionist had pity on them and convinced an executive to come down for a chat. One taste, and he instructed the frozen novelties buyer to educate the enterprising duo on the steps they had to take to launch in retail—packaging, nutrition labeling, etc.—telling them that if they did all of these things, he would give them a shot. Six months later, Jewel was carrying Diana’s Bananas.

Other accounts followed, and the business grew. But growth created new challenges. Consistency in the dipping process was one. Uniform coating is essential in a mass-market business, but, with 22 employees hand-dipping each banana, it was nearly impossible to achieve. Bob was sitting in the middle of the production floor one day when he noticed a lingerie drying rack standing against a wall. He stared at it for awhile, and an idea grew. Jumping up, he grabbed the rack, and clipped twelve bananas to it. Dipping them into a bucket of melted chocolate, he realized that he had found a solution to the consistency issue—and a way to speed up production, as well.

The purchasing process had also become problematic. Bob negotiated each day with vendors at Chicago’s produce market. Prices fluctuated wildly, and availability was sometimes a problem. Worse yet, disposing of the growing number of peels was becoming both costly and an environmental headache.

One day, Bob stopped for a smoothie at a juice shop and realized that the bananas the chain used were commercially frozen. He started researching, and the trail led him to Ecuador and a processor capable of individually freezing bananas that come straight from the grower, quickly and at a very low temperature that preserves the fruit’s freshness. Not only that, the jungles of Ecuador produce a seemingly endless supply, so Bob could precisely dictate size, ripeness, and sugar content to ensure a consistent, top-quality product. And the peels are no longer a problem; they go back to the jungle to fertilize the soil and become food for animals.

More innovation followed. Walking down the street one day, Bob noticed a dry cleaner’s shop and the automated moving rack that held clothes waiting to be picked up. Once again, inspiration struck. He contacted the rack manufacturer and worked with him to design a rack that dipped down at one point. Now, Diana’s Bananas has a fully automated dipping system that processes 100 bananas a minute!

In the last couple of years, interest in health and wellness has conspired to lift Diana’s Bananas into national—and global—prominence. Liz Vaccariello’s book Flat Belly Diet promoted the benefits of a nutrient called MUFA, found, among other places, in dark chocolate. A Prevention Magazine article on “flat belly foods” named Diana’s Bananas as one of the editor’s favorites, which eventually led to a government contract and an Australian partnership. More recently, nursing homes are finding Diana’s a delicious and popular way to boost potassium in patients whose medication depletes it. And sales continue to climb.

When Bob and Jeanine started selling their bananas at street fairs 25 years ago, they could hardly have imagined the adventures that lay ahead. Their goal was simply to create a “world’s best” product, and along the way they built a “world’s best” business. Which goes to show that with some inspiration, ingenuity, and openness to new ideas, you just might be able to create your own luck.

Editor: Reprinted from Perimeter Advisor’s quarterly newsletter “Online Insight” (Q2 2010), 4th in a series entitled “American Ingenuity”.

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