Historic canned fruit and vegetable producer Del Monte Foods has filed for Chapter 11 bankruptcy proceedings, crushed by declining sales, new consumer habits who. Sarah Foss, global head of law and restructuring at the financial advisory firm Debtwire, said the company is taking a hit due to the market shifting towards healthier, preservative-free alternatives, as well as rising costs due to the Trump administration’s 50 percent tariffs on steel, which raise their packaging costs.
In addition, food inflation has prompted consumers to choose cheaper brands from large retailers. The California-based group, founded in 1886, will continue to operate with $912 million in financing while it seeks a buyer for its assets.
“After a thorough evaluation of all available options, we determined that a court-supervised sale process is the most effective way to accelerate our turnaround and create a stronger and more enduring Del Monte Foods,” said CEO Greg Longstreet.
Del Monte Foods, based in Walnut Creek, California, also owns the Contadina (tomatoes), College Inn and Kitchen Basics (broths), and Joyba (bubble tea) brands.
However, despite the growth in sales of Joyba products and broths in FY2024, the company has not been able to make up for the decline in sales of its core business: canned products under the Del Monte brand.
Del Monte Foods and its parent company, Del Monte Pacific Limited, headquartered in Singapore, a major Asian financial and trading hub, faced a court case last year as a group of lenders opposed the debt restructuring plan. The case ended in May with the granting of a loan that increased the company’s interest expense by $4 million a year, according to an official statement.
According to Barron’s, Fresh Del Monte Produce, a separate company, performed significantly better, demonstrating how the market is moving away from packaged products.
Analysts say that to become competitive again, the company will have to diversify the portfolio by focusing on more innovative and health-oriented categories.
