Sustaining Growth

 

 

As a global branded food company, we bring to life health, wellness and nutrition, and sustain our people, the planet and our performance-the triple bottom line.

 
 
 
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The Del Monte Pacific Ltd. (DMPL) Group continued operating as an essential industry even during the COVID-19 pandemic to address the demand for food while ensuring the safety of its employees and workforce and providing them with employment. The impact of DMPL extends beyond our 5,800 plus regular employees and includes about 18,300 service providers who work in different areas of our operations.

In the United States, Del Monte Foods, Inc. (DMFI) is one of the largest producers, distributors, and marketers of premium quality, branded fruits, vegetables, and tomatoes for the U.S. retail market. DMFI contracts with close to 650 farmers across the U.S. and Mexico, which supply about 950,000 tons of produce. In aggregate, 100% of the tomatoes, 99+% of the vegetables, and about 70% of the fruits we produce are grown in the U.S., while the balance are supplied from Mexico, Philippines, China, Thailand, and Greece.

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Our relationships with farmers extend to more than three generations. The fruits and vegetables are contractually grown on farms. Some Del Monte fruit growers include farm families that have produced for Del Monte for over 70 years. Our growth has a broader implication for farms across the U.S.

Our pineapple plantations in southern Philippines encompass two cities and 18 municipalities in Bukidnon and Misamis Oriental, Mindanao. Around 20,000 families or approximately 100,000 individuals directly or indirectly depend on the Company in the Philippines, including fruit growers, truckers, harvesters, and maintenance crews.

The Company believes that our operations have immensely contributed to regional economic growth, creating a multiplier effect on the local economy by fueling businesses which support the Group, and serving the day-to-day needs of our employees and their families.

 
 
 
 
 
 
 
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Directors visiting the pear and peach plant in Modesto, California, with management

 

Our Performance

 



  1. The Group generated a turnover of US$2.2 billion in FY2021, 2% higher than prior year.

  2. Group EBITDA was US$309.0 million, 37% higher than prior year; net profit was US$63.3 million, 97% higher and a significant turnaround from the US$81 million loss in the prior year. There were no one-off expenses in FY2021.

  3. The Group reduced net debt, lowering gearing to 2.0x from 2.4x equity.

  4. The Group’s retail business in the U.S. and Philippines posted higher sales. The lockdown has made consumers stock their pantries with trusted brands like Del Monte, Contadina, S&W and College Inn, which offer healthy, delicious, longshelf life culinary products.
     
  5. During the quarantine, the Group continued operating as an essential industry to meet the surging demand for food while ensuring the safety of its employees and workforce.

  6. The Group strengthened its product offerings and has launched new products in pursuit of health and wellness to address consumer needs.

  7. Del Monte Pacific expanded its branded business while reducing non-strategic business segments. It continued to build its distribution in emerging channels and leverage fast-growing e-commerce opportunities, especially amidst the lockdown.

  8. DMFI’s sales for FY2021 were US$1.5billion or 70% of Group sales. Branded retail sales grew by 2.5% and e-commerce sales significantly increased. However, total sales were down 3% due to the strategic planned exit from the non-branded private label segment.

  9. The Company successfully launched the premium canned pineapple ‘Deluxe Gold’ produced by Del Monte Philippines, and Del Monte Veggieful line of frozen vegetarian pocket pies. New products launched in the past 3 years contributed 6% to DMFI’s total sales in FY2021.

  10. EBITDA soared to US$170.5 million from US$33.2 million and generated a net profit of US$15.1 million, reversing the loss of US$100.4 million in FY2020. About US$40 million savings were generated by plant closures in the prior year.

  11. DMFI maintained its leading market share position for the full year in canned vegetable and fruit. Business fundamentals remained on solid ground.

  12. DMFI’s integrated master brand campaign, “Growers of Good,” promotes Del Monte as an advocate for doing what is good – Del Monte nurtures the Earth’s goodness today to grow a healthier and more hopeful tomorrow.

  13. DMPL’s 2nd largest subsidiary, Del Monte PhiIippines, Inc., achieved record sales of US$705.8 million in FY2021, up 14% versus the prior year. Sales in the Philippines rose 16% to US$392.9 million on strong retail sales.

  14. Spaghetti sauce, pasta, ketchup, and packaged fruit products performed well from increased home cooking, anchored on quality and nutrition. Beverage sales also improved, with Del Monte’s equity associated with healthy and immunity-boosting 100% Pineapple Juice.

  15. International sales up 14% on higher packaged and fresh sales.

  16. DMPI achieved an EBITDA of US$152.6 million, up 37%, and generated a record net profit of US$94.5 million, up 40%.

 
 
 
 
 
 
 
 
 
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Loading of Del Monte Products for Export

 

 

Responsible Sourcing Practices

The Group recognizes the importance of building a strong partnership with its suppliers. DMPL conducts business with its customers based on integrity, mutual interest, and fairness.

  1. The Group performs periodic audits of contract manufacturers and direct suppliers, including independent and unannounced audits to ensure quality assurance and compliance.

  2. It is our policy to seek opportunities to buy from suppliers where quality, price, and delivery of service are competitive.

  3. In the U.S., DMFI has a Supplier Code of Conduct that applies to every entity providing goods or services, including subcontractors.

    a. The objective is for suppliers to practice and uphold
        ethical business standards

    b. Del Monte’s Supplier Diversity Program enables small
        and diverse businesses to be considered fairly as
        subcontractors and suppliers.
         
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    Okray Family Farms, one of Del Monte Foods' long-term partners

  4. DMPI has a Code of Business Conduct that outlines the Company’s practices in building its relationship with suppliers while adhering to the principles of integrity, mutual interest, and fairness in conducting business.

  5. Through its due diligence process, DMPI ensures that the lands it is engaging for growership or leases have no ownership, environmental, human rights, zoning, or taxation concerns. This is done through inquiry with the community and verification in various government offices dealing with lands (which include the Registry of Deeds, Department of Environment and Natural Resources, local assessors’ offices, Department of Agrarian Reform, local zoning officers, and the National Commission on Indigenous Peoples).


  6. In selecting suppliers, DMPI applies its Supplier Quality Management Program to assess the quality and delivery performance, feedback, continuous improvement program for all material suppliers and toll manufacturers.

  7. The objective of the program is to align DMPI’s quality parameters with suppliers, provide performance scorecards, classify suppliers into certified, preferred, approved, and conditional suppliers, and align them with DMPI’s goals that will support growth in the next five years. The program determines the allocation of the Company’s requirements to suppliers.

  8. The suppliers are evaluated based on performance - quality, delivery, and competitiveness.

  9. DMPI expects our suppliers to conduct their operations in a way that respects the fundamental human rights of others. This includes, but is not limited to, the rights of their workers and people working for their suppliers, as well as the communities affected by their operations, and those raising any human rights concerns associated with them.

  10. The Company also expects suppliers to respect the fundamental labor rights set out in the eight International Labor Organization core conventions:

    a. Employees should be free to leave their employer after
        giving reasonable notice and are not required to lodge
        deposits or payments with their employers.

    b. Ensure the right to freedom of association.

    c. Provide a safe working environment, adopt procedures
        to identify and address workplace health and safety risks,
        implement safe working practices and provide
        appropriate personal protective equipment,where
        applicable, to prevent occupational injuries or illnesses.

    d. Ensure operations are free from child labor.

    e. Provide fair wages and benefits, which comply at least
        with applicable minimum wage legislation and other
        applicable wage and working time laws or collective
        agreements for all employees.

    f. Working hours must comply with national laws, collective
        agreements and all overtime must be voluntary.

    g. No discrimination is practiced. Provide equal
        opportunities to all employees.

    h. Treat employees with dignity and respect.
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    Worzella Farms, one of DMFI's growers