American food production and distribution company Del Monte Foods has filed for bankruptcy and is looking for a buyer as it grapples with mounting debt, post-pandemic headwinds and shifts in consumer spending.
The company announced on Tuesday (July 1) that it had voluntarily initiated Chapter 11 proceedings in the US and reached an agreement with its lenders to sell most or all of its assets.
“After a thorough evaluation of all available options, we determined a court-supervised sale process is the most effective way to accelerate our turnaround and create a stronger and enduring Del Monte Foods,” Greg Longstreet, the president and CEO of Del Monte Foods, said in a statement.
Del Monte Foods, a US unit of Singapore-based Del Monte Pacific, is a separate entity from Fresh Del Monte Produce, which specialises in items such as fresh bananas and pineapples.
Noteworthy here is Fresh Del Monte Produce Inc. is a completely independent, publicly traded company with no legal, operational, or financial affiliation with Del Monte Foods Inc.
These developments have no impact on Fresh Del Monte’s business in the UK, Europe, or globally, including the business' operations, financial strength, supply chain, or ability to serve customers and partners.
Fresh Del Monte Produce Inc.’s financial or operational performance is not impacted by that separate, unaffiliated company’s announced legal or financial proceedings.
Fresh Del Monte Produce remains financially strong, strategically aligned, and committed to delivering long-term value. It will report second quarter 2025 results during its scheduled earnings call on July 30.
While both businesses share rights to the Del Monte name through historical licensing arrangements, they operate under distinct ownership and serve different geographic markets.
Fresh Del Monte continues to operate with full stability and focus, maintaining their commitment to delivering the premium Del Monte-branded products and service expected from them.
Outlining its recent business challenges, US-based Del Monte Foods said in court documents that it had ramped up production to meet high demand during the coronavirus pandemic, but got saddled with surplus inventory when consumer spending declined after the pandemic subsided, resulting in significant write-offs or sale at substantial losses.
In 2023, Del Monte scaled back production, it said, given softening demand, but lower volume led to higher per-unit costs.
“Altogether, this perfect storm of reduced margins, excess inventory and decreased customer demand created an unprecedented liquidity crisis for the Company,” according to court filings.
The California-based company, which employs about 2,780 people, said it has secured $912.5 million in debtor-in-possession financing to continue operations during the Chapter 11 process.
Among its portfolio of branded products are Contadina packaged tomatoes, Kitchen Basics broths and stocks, and Joyba bubble teas and beverages.