The fruit and veggie business, besides being delicious, is a brutal one. The low-margin goods are capital-intensive and are commodity items on the open market. For the small and midsize farmer, it's been a losing battle against the big boys. Two of the big boys you may recognize above the rest while roaming the aisles of your local grocery store are Dole (NYSE: DOLE) and Chiquita (NYSE: CQB). Both are iconic food brands with a long history. Now, as the industry dynamics change yet again, influenced by the rise in private-label goods, we need to reexamine the efforts of these two companies to adapt and remain viable going forward. Which of these two fruit companies is a sweeter bet for 2013?

A good year
Apparently, both Dole and Chiquita are doing something right. Thus far into the year, Dole has well outperformed the S&P 500, with more than a 35% gain. Chiquita hasn't fared as well -- down two points since 2012's first day of trading. It is worthwhile to note, however, that Chiquita was able to pull itself up from a major drop in May that shaved a solid 40% of the company's market value right off the top. This was a result of the company's second-quarter earnings of $6 million compared to $78 million the year before.

Both companies started the year with drastically low valuations, and part of the strong performance of Dole suggests the market realized it was pricing the company for a quickly declining business.

In April (admittedly, shortly before the company crashed 40%), I wrote an article highlighting Chiquita's superior market position and bargain pricing. The company follows a favorite Warren Buffett-ism: Buy commodities and sell brands. The vast majority of us are very familiar with the Chiquita sticker on a banana. While we may not actively seek it out over other brands of bananas, chances are it's the one we end up with.

The things that held Chiquita back in recent years look to be turning around. Back in 2010, margins were crippled by fuel costs and the unexpected jump to private-label goods. As we see at the pump, the cost of fuel has come down. As for the private-label issue, the company has made inroads in providing grocers with the ingredients for their private-label goods, getting some much-needed exposure to the trend.

As for Dole, the company has done a great job of reducing its high debt load, something that keeps valuations low. Back in September, Dole announced it would be unloading its packaged foods business and Asian fresh-foods business to Japanese food company Itochu for $1.7 billion in cash. The market reacted unfavorably to the sale -- since September, the stock is down around 10%. But make no mistake, this created a leaner Dole going forward that will ultimately aid in P/E correction and growth prospects.

Looking forward
For investors, Dole has been the winner for 2012. But what about next year? Both companies remain on the cheaper end in terms of valuation, understandably. With the ongoing restructuring at both Dole and Chiquita, our vision into the companies' future isn't crystal-clear. As I mentioned, Dole was able to sell some assets and get some cash, which I believe puts it at an advantage in the near term.

Chiquita replaced its CEO in October to aid in its own restructuring process.The new CEO, Ed Lonergan, has a history of taking money-losing businesses, shedding unwanted assets, and returning them to higher margins and attractive bottom lines. The current restructuring at Chiquita is projected to save in the neighborhood of $60 million per year, but that could increase as Lonergan tweaks the plans going forward.

In my opinion, both companies have solid upside potential going forward. Dole has a joint venture with Danone selling bottled smoothies, which I believe is a great business. Chiquita is starting 2013 around the same level it did a year ago, but margins should be again improving if the new CEO's process goes according to plan. If so, look for year-over-year improvements, which will move the stock price accordingly.

All things considered, I am betting on the long pass with Chiquita as the sweetest of these two fruits.

What do you think? Shout out below.