Del Monte to focus on branded products

MANILA, Philippines – Food and beverage giant Del Monte Pacific Ltd. (DMPL) wants to sell more branded products to boost sales revenue.

“The company plans to veer away from selling pineapple concentrates to selling more value-added products. We’d rather sell more branded Del Monte,” DMPL’s chief finance officer Ignacio Sison said in a press conference following the company’s listing on the Philippine Stock Exchange (PSE) Monday, June 10.

Branded products accounted for around 70% of the company’s sales in 2012. Sales of these products grew 17% to $320.9 million from $274.6 million in 2011.

Of the branded sales, 60% came from Del Monte products mostly sold in the Philippines and the Indian subcontinent, while the remaining 10% came from S&W products sold mainly in Asia and the Middle East.

Non-branded products, on the other hand, contributed 30% to total sales. Sales of this segment went down 7.8% to $138.8 million in 2012 from $150.59 million the previous year.

The decrease, according to Sison, was mainly due to fluctuating concentrate prices, especially in Europe.

“The drag was mainly due to the (declining) concentrate pricing.”

“If you are a mere supplier before to many companies, they would prefer buying concentrates from you and package it and sell it on their own. The goal this time is to pack it and brand it ourselves,” he added.

New markets

To jumpstart this branded products approach, the company already introduced a limited line of products in Myanmar in January.

DMPL partnered with Global Sky Co. Ltd. for the distribution of its products in Myanmar, particularly in Yangon and Mandalay.

Sison said the company wants to expand its Asia-Pacific and Middle East branded product markets for international brand S&W.

“For S&W, our priority is Asia and the Pacific and the Middle East. That will be our initial salvo for the next 3 years. For Europe, we’ll look at it when the economy improves,” Sison said.

S&W, according to company COO Luis Alejandro, is a vital growth driver for Del Monte.

“S&W brands, we can sell both the fresh and the processed products. For Del Monte, the trademark has been to just sell the processed products. Through S&W, we now have a big market of fresh pineapples in Korea, China, Japan and the Middle East.”

“It is our biggest opportunity. That’s how important S&W to us. It is our gateway to the international market,” he said.

DMPL listed 1.298 billion shares on the PSE. The company’s shares are also listed on the Singapore Stock Exchange.

The company explained the move to list in the Philippines would allow it to access Filipino investors and raise fresh funds for expansion.

Del Monte owns a vast pineapple farm in Mindanao. – Rappler.com