Del Monte Pacific Ltd. (DMPL) is aiming for brand expansion as well as to diversify its distribution via both conventional and e-commerce channels.
As part of its strategy, its subsidiary Del Monte Foods, Inc (DMFI) has recently completed the acquisition of Kitchen Basics®, a line of ready-to-use stocks and broths from McCormick & Company for US$99 million.
“The acquisition is consistent with DMFI’s overall growth strategy as it focuses on innovation, renovation and customisation of its iconic brand portfolio,” the company said. DMPL is also looking at opportunities to expand the Kitchen Basics brand beyond US shores.
DMPL had also started on a number of cost-optimisation initiatives. In the US, it introduced distribution center consolidation and increased use of rail instead of trucks to save on fuel cost, while it introduced tin can packaging optimisation in the Philippines.
The group reported a net loss of US$30.52 million in the first quarter. Its sales in the Philippines, which accounts for about half of DMPL’s sales, was lower by 9.7% after it registered a decline in volume across its core categories amid a high inflationary environment. According to the company statement, “Packaged mixed fruits and beverage sales were down as consumers shifted priorities in the face of high food prices, and are spending more on necessities and products offering improved value.”
Meanwhile, in the Philippines, DMPL subsidiary Del Monte Philippines, Inc (DMPI) has further injected US$2 million in its partnership with Vinamilk to add dairy products to its portfolio. In the agreement, DMPI will import Vinamilk products from Vietnam and sell them in co-branded packages in the Philippines. DMPL believes in the synergistic strengths between both partners – Vinamilk being a leading dairy player with technical and manufacturing expertise to develop quality functional products, whereas Del Monte has strong relationships with leading grocery retailers and distributors all over the Philippines.
Currently, Del Monte Vinamilk’s products are fortified RTD milk and yogurt drinks, but there are plans to expand the portfolio soon.