Few companies are associated as heavily with canned fruits and vegetables as Del Monte Foods. However, the company's CEO said in an interview that for much of its recent existence, the 133-year-old business was so focused on maintaining dominance in a space it has come to define that it missed out on ways of unlocking the potential for its brands in other areas.
In an effort to better position itself to tap into consumer trends such as snacking, convenience and healthy eating, Del Monte -which is the brand by that name focusing on canned and preserved fruits, vegetables and produce- is expanding its offerings as it introduces frozen and refrigerated products for the first time and moves into other parts of the grocery store, such as the deli.
In the next two years, Del Monte also plans to go beyond grocery stores into e-commerce, convenience stores and warehouse clubs to create more opportunities for customers to experience their products.
The goal of the "new Del Monte," as CEO Greg Longstreet called it, will build upon its brand equity, history and position as one of the first plant-based companies to become a more innovative and agile organization in order to get products to market faster — an imperative among food companies in today's fast-changing market place. If Del Monte's strategy is successful, Longstreet is optimistic the privately held company could increase sales by $300 million to roughly $1.78 billion by 2022.
"We should be thinking bolder and thinking outside the can to grow and innovate and differentiate, and we've set course for a very aggressive innovation agenda," Longstreet told Food Dive ahead of the unveiling of its new product line-up at an event this week in New York. "We had this untapped potential for the brands."
Fooddive.com reports that, in order to increase its likelihood of success, Del Monte is expanding its marketing department and spending more to promote items as they hit the market.
"Tariffs impacted us immediately"
On a sadder note, Longstreet also had to admit that the US-China trade wars will certainly be driving up the prices of canned fruits & vegetables. “Tariffs impacted us immediately,” he said in an interview. The Trump administration placed a 25% tariff on steel imports and 10% tariff on aluminum imports in March 2018, leading U.S. producers to raise their prices as well. “Canned costs went up 25% overnight.”
Longstreet said transportation costs, which he described as “out of control,” and a tight labor market are also causing prices to rise. In addition to paying more for metal, mandarin oranges’ cost has also climbed because of the tariffs. He said the company looked for ways to offset the increase, but ultimately had to pass a 10% hike on to customers.