How can a 1st century (plus) brand fall into a position where Chapter 11 seems to be the best option to support a business?
This is a problem with Del Monte Foods, a nearly 140-year-old company that entered the process for Chapter 11 this week and announced it was looking for a new owner.
“This is a strategic step for Del Monte Foods,” President and CEO Greg Longstreet said Tuesday. “The court’s teacherized sales process is the most effective way to accelerate our turnaround and create stronger and lasting Delmonte foods.”
Best known for its canned fruit and vegetable brand of the same name, the company has been owned since 2014 by Singapore and the Philippines-listed Del Monte Pacific.
Based in California, Del Monte Foods also comes in brands such as College In Soup and Stock and Joyberty. With sales under pressure recently and liabilities from DelMonte Pacific contracts with excess inventory, the company has attacked “restructuring assistance agreements” with creditors and pursued “all or virtually all of the concerning sales processes” of assets.
Del Monte Foods says it has secured a $912.5 million commitment from lenders to lenders to continue their business while potential suitors are sought. This includes $165 million in new funds that are eligible for court approval.
This group has four factories. There are two factories in the US and two in Mexico. May, company Closed factory in Washington. The closure continued last year with three others.
“Improved capital structure, strengthening financial position and new ownership will make us better positioned for long-term success,” Longstreet added.
It is important to note that Delmonte Foods is different from the publicly available and fresh Delmonte produce that focuses on fresh food. The company felt compelled to issue its own statement yesterday to highlight that it was not affiliated with Del Monte Foods.
“Fresh Del Monte Produce Inc.’s financial or operational performance is not affected by legal or financial procedures announced by its separate unrelated companies.” “The company is committed to being financially strong, strategically aligned and delivering long-term value.”
Fresh Del Monte Produce owns Del Monte brands for food prepared in Europe, Africa and the Middle East, but Del Monte Foods retains the rights to the Del Monte brand for food prepared in the US.
And there is part of the reason for Del Monte Foods’ anguish. The company’s range of shelf stable products does not appeal to an increase in US consumers looking for a minimally processed fresh option instead.
For Eddie Pearson, partner at US consulting Beyondbrands, the move to Chapter 11 of Del Monte Foods, “It’s not just a bankruptcy story, it’s a snapshot of how quickly consumer preferences are rewriting the food aisle.”
“After nearly 140 years of stability in American shelves, the iconic canned food brand is a restructuring. Why? Because consumers officially disbanded with can openers,” Pearson wrote on LinkedIn this week. “Modern shoppers admire the organic, artificial farmers market vibe surrounding the “non-BPA liner” label. Certainly, Joyba Bubbletee still has that moment.
Del Monte Foods could also be under pressure in another way. Our Shoppers teeth Regular buyers of this type of canned fee may have been attracted in recent months, especially during times of consumer confidence under pressure, due to the low price offerings sold under the retailer’s own label.
The company manufactures products for US retailers’ own labels; As the submission of Chapter 11 is permittedthat aspect of the business is “virtually contracted” after the recent plant closure.
Recent tensions over tariffs, especially Input costs for making cansit probably didn’t help. The American Industrial Association, Consumer Brands, has spoken out over concerns about the US move to impose tariffs on steel and aluminum.
On top of that, Del Monte Foods has been holding excessive stock in the wake of the Covid-19 pandemic. The company’s sales rose during the worst of the pandemic amid a surge in home consumption and a temporary flight to well-known and staple brands. The growing demand did not last long.
Next is the internal factors. Del Monte Foods carries a mountain of debt from sales to Del Monte Pacific over a decade ago. The company’s Chapter 11 submission stated that annual cash interest costs reached $66 million in fiscal 2020, but increased to $125 million in fiscal 2025 as the capital structure was refinanced and interest rates rose.
The price of DelMonte Pacific stocks listed in Singapore fell after a statement from DelMonte Foots on Tuesday. DelMonte Pacific continues to improve performance for Asians and other international companies “in demand for resilient consumers, supported by strong and stable supply chains.” The company added that it is assessing the potential impact of Del Monte Foods’ bankruptcy process, including impairment charges that must be disclosed in future reports.
Nevertheless, Del Monte Foods accounts for 70% of parental sales, according to Del Monte Pacific’s 2024 annual report.
And logistics people are watching the situation carefully. Logistics groups including Chep USA, Saddle Creek and Uber Freight (as Transplace) are listed as creditors in their applications.
“Del Monte Foods will continue to fulfill customer orders throughout the portfolio of beloved brands during this process,” the group said. “The company is liquid enough to continue paying for vendors and suppliers of products and services offered since the filing date. Our team is focused on providing high quality foods that are healthy, tasty and convenient.”
Nothing further has been seen yet.
“The Pear-shaped Pear-shaped at Del Monte Foods” was originally created and published Just fooda brand owned by GlobalData.
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