About Fresh Del Monte Produce

Fresh Del Monte Produce Inc. operates as a vertically integrated producers, marketers and distributors of fresh and fresh-cut fruit and vegetables, as well as a leading producer and distributor of prepared fruit and vegetables, juices, beverages and snacks in Europe, Africa and the Middle East. The company markets its products worldwide primarily under the Del Monte brand. The company’s global sourcing and logistics network allows the company to provide consistent delivery of high-quality products and value-added services to its customers. The company has leading market positions in the following product categories and the company is the largest marketer of fresh pineapples in the United States, and a leading marketer in other markets worldwide; the third-largest marketer of bananas in the United States, and a leading marketer in other markets worldwide; and a leading marketer of fresh-cut fruit in the United States, Canada, Japan, South Korea, and the United Kingdom; fresh-cut vegetables in North America, South Korea, Kuwait, United Arab Emirates, Japan, and Saudi Arabia; avocados in the United States; and canned fruit in Europe, Africa, and the Middle East. The company’s business is consisted of three reportable segments, two of which represent the company’s primary businesses of fresh and value-added products and banana, and one that represents the company’s other ancillary businesses. Fresh and value-added products - includes pineapples, fresh-cut fruit, fresh-cut vegetables (which includes fresh-cut salads), melons, vegetables, non-tropical fruit (which includes grapes, apples, citrus, blueberries, strawberries, pears, peaches, plums, nectarines, cherries and kiwis), other fruit and vegetables, avocados, and prepared foods (which includes prepared fruit and vegetables, juices, other beverages, and meals and snacks). Banana Other Products and Services - Includes the company’s third-party freight and logistic services business and the company’s Jordanian poultry and meats business. The company markets and distributes its products to retail stores, club stores, convenience stores, wholesalers, distributors and foodservice operators in more than 80 countries around the world. North America is its largest market, accounting for 60% of the company’s net sales in 2023. The company’s other major markets are Europe, the Middle East (which includes North Africa) and Asia. The company produces, sources, distributes and markets a broad array of fresh produce, primarily under the Del Monte brand, as well as under other proprietary brands, such as UTC and Rosy. The company also produces, distributes, and markets prepared fruits and vegetables, juices, beverages and snacks under the Del Monte brand, as well as other proprietary brands, such as Just Juice, Fruitini, Pinkglow, Del Monte Zero, Honeyglow, Rubyglow, Honey Miniglow, Bananinis, and other regional trademarks in Europe, Africa and the Middle East. The company also distributes under the Mann Packing family of brands in North America, including Mann, Mann's Logo, Arcadian Harvest, Nourish Bowls, Broccolini, Caulilini, Better Burger Leaf and Romaleaf. The company’s distribution centers and fresh-cut facilities address the growing demand from supermarket chains, club stores, convenience stores, foodservice providers, mass merchandisers and independent grocers to provide value-added services, including the preparation of fresh-cut produce, ripening, customized sorting and packing, just-in-time and direct-store-delivery and in-store merchandising and promotional support. Sourcing and Production The company sources its fresh produce products primarily from Central and South America, North America, and the Philippines, and the company’s prepared food products from Africa, Europe, and the Middle East. The company also produces, markets and distributes certain prepared food products in North America based on the company’s agreement with Del Monte Pacific Limited and its subsidiary Del Monte Foods, Inc. The company’s products are sourced from company-controlled operations and through supply contracts with independent producers. In 2023, 49% of the fresh produce the company sold was grown on company-controlled farms and the remaining 51% was acquired primarily through supply contracts with independent growers. Costa Rica is the company’s most significant sourcing location representing approximately 36% of the company’s total sales volume of fresh produce products and where 36% of the company’s property, plant and equipment was located in 2023. Fresh and Value-Added Products The company’s fresh and value-added products segment includes sales of the following product categories: Fresh-cut produce (fresh-cut fruit and fresh-cut vegetables) The company’s fresh-cut produce sales in 2023 represented 20% of the company’s total net sales. The company’s largest selling market for its fresh-cut products was North America which accounted for 71% of the company’s fresh-cut fruit sales and 83% of its fresh-cut vegetable sales in 2023. The company also sold fresh-cut produce in Europe, Asia, and the Middle East. The company’s fresh-cut fruit products include pineapples, melons, grapes, citrus, apples, mangoes, kiwis and other fruit items. The company’s experience in this market coupled with its sourcing and logistics capabilities and the Del Monte brand have enabled the company to become a leading supplier of fresh-cut fruit to the supermarket, convenience and club store channels in the United States. The company’s offerings in North America also include a broad variety of fresh and fresh-cut vegetable products since the company’s acquisition of Mann Packing in 2018. During 2022, the company completed its integration of Mann Packing, providing the business with full access to its North America resources and logistics network. The completed integration will allow the company to leverage its existing distribution network and infrastructure to expand the market reach of the company’s Mann Packing family of products, while enhancing the company’s ability to better serve its integrated customers and address consumers' needs for healthier foods. The fruit the company uses in its fresh-cut operations are sourced within the company’s integrated system of company-controlled farms and from GAP-certified (good agricultural practices) independent growers. The company purchases its vegetables from independent growers principally in the United States and Mexico. The company’s purchase contracts for both fruit and vegetables are typically short-term and vary by produce item. Pineapples The company is the leading marketer of fresh pineapples in the United States and a leading marketer worldwide based on internally generated data. The company’s pineapple net sales in 2023 represented 14% of the company’s total net sales, and were primarily concentrated in North America (accounting for 61% of the company’s total pineapple sales), followed by Europe (22%), Asia (11%), and the Middle East (6%). The company’s Del Monte Gold Extra Sweet pineapple, which was launched in 1996 as a then-new variety, has an enhanced taste, golden shell color, and bright yellow flesh and has replaced other traditional pineapple varieties in popularity and demand. The production and sale of premium pineapples in the market has also led to increased competition. In recent years, the company has continued its efforts to innovate the company’s product lines, including with the launch of the company’s proprietary Pinkglow pineapple in 2020 and with the relaunch of the company’s Honeyglow pineapple in 2021. In 2022, as a further showcase of the company’s diverse product line in the pineapple space, the company announced the launch of the company’s Del Monte Zero carbon neutral pineapple, which provides consumers with a unique opportunity to support climate-conscious produce. This new pineapple product line extension, which launched in North America and select European markets in 2023, is grown in Costa Rica and has been certified as sustainably grown by a third-party certification body. In January 2024, the company launched its Rubyglow pineapple, debuting exclusively in China, which features a red exterior and bright yellow flesh as part of the company’s expansion into the market. Pineapples are grown in tropical and sub-tropical locations. The principal production and procurement areas for the company’s pineapples are Costa Rica, the Philippines, and Kenya. Pineapples have a long growing cycle of 18 months and require re-cultivation after one to two harvests. Growing pineapple requires a higher level of capital investment, as well as greater agricultural expertise as compared to bananas. Given the complexity of pineapple cultivation relative to the company’s bananas, a higher percentage of the fresh pineapples the company sells (74% by volume in 2023) is produced on company-controlled farms. Avocados Avocado net sales represented 6% of the company’s total net sales during 2023. Avocados are one of the fastest growing produce items in the United States. In 2021, the company announced the arrival of its Goodvocado avocados, a pack of various sized avocados that naturally range from small to large, and that allow consumers to customize their use of avocados and discover new ways to incorporate them into their everyday cuisine. During 2022 and 2023, the company continued its efforts in the area of avocado predictability, combining the use of artificial intelligence and the company’s data library to develop technology that can help forecast avocado pricing. The company’s avocados are sourced principally from Mexico where the company has its own sourcing operations and sorting and packing facility, ensuring a consistent supply of high-quality avocados year-round. The company also obtains its supply of avocados from independent growers in the United States and Peru. Prepared Foods The company has a royalty-free, perpetual license to use the Del Monte trademark in connection with the production, manufacture, sale and distribution of prepared food, including beverages, in over 100 countries throughout Europe, Africa, the Middle East and certain Central Asian countries. The company can also produce, market and distribute certain prepared food products in North America based on the company’s agreement with Del Monte Pacific Limited. The Del Monte brand has a reputation with both consumers and retailers for value, quality and reliability and is considered a premier brand in many Western European markets. In addition to under the Del Monte label, the company’s prepared food products are also sold under the buyers’ own private label for major retailers. The company’s prepared food products include prepared pineapple, peaches, fruit cocktail, pears, tomatoes, and other fruits and vegetables, as well as fruit juices, various meals and snacks, and industrial products, such as fruit in the form of purees, pulps and concentrates for further processing. In North America, the company also produces and market san array of prepared vegetable offerings, such as vegetable trays with dip, salad kids, Nourish Bowls, and ready-to-use veggie kits created for air fryers. The company’s prepared pineapple products are primarily sourced from the company’s facility in Kenya while the company’s prepared deciduous and tomato products are primarily sourced from the company’s facility in Greece and from independent producers. The company expects to continue investing in new product development to increase revenue and maintain market leadership in the company’s prepared foods category. Banana The company is the third-largest marketer of bananas in the United States and a leading marketer in other markets worldwide, based on internally generated data. The company’s banana net sales in 2023 represented 38% of the company’s total net sales, and were primarily concentrated in North America (accounting for 49% of the company’s total banana sales), followed by Europe (23%), Asia (18%), and the Middle East (8%). The company’s ability to provide its customers with a year-round supply of Del Monte bananas is important to maintaining the company’s existing customer relationships and attracting new customers. The company’s position as a volume shipper of bananas has also allowed the company to make regular shipments of a wide array of other fresh produce, such as pineapples, melons and plantains; and has enabled the company to expand its third-party ocean freight services, thereby reducing the company’s average per-box logistics costs and maintaining higher quality produce with a longer shelf life. The company produces bananas on company-controlled farms in Costa Rica, Guatemala, the Philippines, Panama and Brazil; and the company purchases bananas from independent growers in Guatemala, the Philippines, Ecuador, and Colombia. In 2023, the company produced approximately 47% of the banana volume the company sold on company-controlled farms, and the company purchased the remainder from independent growers. Although the company’s supply contracts are primarily long-term, the company also makes purchases in the spot market, primarily in Ecuador. In the Philippines, the company purchases the majority of its bananas through long-term contracts with independent growers. Approximately 84% of the company’s Philippine-sourced bananas are supplied by one grower, representing 12% of the Philippines banana industry volume in 2023. In the Philippines, the company has leased approximately 4,000 hectares of land where the company has planted approximately 3,055 hectares of bananas for the Asia and the Middle East markets. Additionally, in early 2023 the company announced a multi-year collaboration agreement with a United Arab Emirates-based (‘UAE’) firm to supply the company’s Middle East and North Africa markets with bananas grown in Somalia, which is expected to begin in 2025. Other Products and Services Included in the company’s other products and services segment is the company’s third-party freight and logistic services business and the company’s Jordanian poultry and meats business. The company’s third-party freight and logistic services business leverages the company’s supply chain assets, including the company’s shipping vessels, warehouses and cold storage infrastructure as part of the company’s efforts to expand the company’s portfolio of services. The company’s third-party ocean freight services business, which the company rebranded as ‘Network Shipping’ during 2022, operates as a hybrid shipping line/cargo owner and seeks to offer customers flexible and dependable access to routes between Costa Rica, Ecuador, Guatemala, Peru and the U.S. The company’s six refrigerated container vessels, which were delivered in 2020 and 2021, have allowed the company to continue expanding this ancillary business, and provide meaningful contribution to the company’s profitability in 2022 and 2023 which the company expects to continue in future periods. The business began by allowing the company to optimize the excess capacity on the company’s ships’ outbound and return voyages to and from the company’s product sourcing locations as a way to generate incremental revenue and reduce the company’s overall shipping costs. The company has opened agencies in the U.S., Guatemala, Costa Rica, Ecuador and Peru to support the expansion of this business and better serve the company’s customers, including by enabling better end-to-end solutions such as cold storage services at port locations and cross-docking services in addition to the company’s ocean freight services. In addition, during 2022 the company announced a range of new logistic services in North America, including inland freight, cross-docking, cold storage and warehousing services in an effort to further leverage the company’s supply chain network within the region and optimize the productivity of the company’s assets. The company’s Jordanian poultry and meats business includes a vertically integrated poultry business, including poultry farms, hatcheries, a feed mill, a slaughterhouse and a meat processing plant. Logistics Operations The company conducts complex logistics operations on a global basis, transporting its products from the countries in which they are grown to the many markets in which they are sold worldwide. Maintaining fresh produce at the appropriate temperature is an important factor in preventing premature ripening and optimizing product quality and freshness. Consistent with the company’s reputation for high-quality fresh produce, the company must preserve its fresh produce in a continuous temperature-controlled environment, from the harvest through to distribution. The company has an integrated logistics network, which includes land and sea transportation through a broad range of refrigerated environments on ships, port facilities, containers, trucks and warehouses. The company’s logistics system is supported by various information systems. As of December 29, 2023, the company transported its fresh produce to markets using the company’s fleet of two chartered and ten owned ships, and four port facilities in the United States. The company operated 38 distribution centers globally, generally with cold storage and banana ripening facilities in the company’s key markets worldwide, including the United States, Canada, South Korea, the United Arab Emirates, Saudi Arabia and Hong Kong. The company also operated 25 fresh-cut facilities in the United States, the United Kingdom, Japan, South Korea, the United Arab Emirates, Kuwait, and Saudi Arabia, some of which are located within the company’s distribution centers. In addition, the company owns or leases other related equipment, including approximately 355 trucks and refrigerated trailers used to transport the company’s fresh produce in the United States. In the Middle East, the company owns or leases approximately 94 trucks used to deliver fresh produce and prepared food products to customers. The company transports its fresh produce using its fleet of two chartered refrigerated ships and ten owned ships and also transport the company’s products to destinations around the world using third-party container lines that cover destinations that the company does not service directly with the company’s own fleet. Included in the company’s ten owned ships are six refrigerated container ships that the company received in 2020 and 2021. These fuel-efficient vessels have allowed the company to continue generating logistics cost savings, expanding the company’s third-party ocean freight business, and ensuring the freshness and quality of the company’s products. The company also operates a fleet of approximately 11,000 refrigerated containers. Sales and Marketing The Del Monte brand has been used to identify premium produce products for over 125 years and is recognized by consumers worldwide for quality, freshness and reliability. The company employs a variety of marketing tools, including advertising, public relations and promotions to reinforce the company’s brand equity with consumers and the trade. Depending on the product and market, the company also provides technical, logistical and merchandising support aimed at safeguarding the superior quality of the company’s products to the ultimate consumer. The company’s sales and marketing activities are conducted by the company’s sales force located at its sales offices worldwide and at each of the company’s distribution centers. The company’s commercial efforts are supported by marketing professionals located in key markets and regional offices. The company actively supports its customers through technical training in the handling of fresh produce, category management, in-store merchandising support, joint promotional activities, market research, inventory and other logistical support. The company uses a variety of promotional tools to build the Del Monte brand and engage consumers in key markets in Europe, Africa and the Middle East. In certain European markets, the company uses distributors to perform product distribution, sales and marketing activities for the prepared foods business. During 2023, one customer, Walmart, Inc. (including its affiliates), accounted for approximately 9% of the company’s total net sales. These sales are reported in the company’s banana and fresh and value-added products segments. North America In 2023, 60% of the company’s net sales were in North America where the company has established a highly integrated sales and marketing network that builds on the company’s ability to control transportation and distribution throughout the company’s extensive logistics network. The company operates a total of 27 distribution centers and fresh-cut facilities within North America. The company’s distribution centers have ripening capabilities and/or other value-added services. Within North America the company also operates four port facilities, which include cold storage capabilities, and own an avocado packing facility in Uruapan, Mexico. The company has sales professionals in locations throughout the United States and Canada. The company sells to leading grocery stores and other retail chains, wholesalers, mass merchandisers, supercenters, foodservice operators, club stores, convenience stores and distributors in North America. These large customers typically take delivery of the company’s products at the port facilities, which the company refers to as FOB delivery. The company also services these customers, as well as an increasing number of smaller regional chains and independent grocers, through the company’s distribution centers. Europe In 2023, 19% of the company’s net sales were in Europe where the company distributes its fresh produce and prepared food products. The company’s fresh produce products are distributed to leading retail chains, smaller regional customers, as well as to wholesalers and distributors through direct sales and distribution centers. In the United Kingdom, the company has a sales office in Staines, England; and operates a fresh-cut facility in Wisbech, England. In France, since late 2021, the company has outsourced its fresh-cut production and banana ripening activities to third-parties, while the company’s sales and marketing function is performed internally. Similarly, in Germany, the company’s sales and marketing function is performed internally and the company’s ripening operations were outsourced to a service provider beginning in 2022. In the Netherlands, Spain, Portugal, Italy and Poland, the company has sales and marketing entities that perform direct sales of its fresh produce products. The company’s prepared food products are distributed through independent distributors throughout most of Europe. In the United Kingdom, the company’s prepared food products are distributed using a combination of both independent distributors and the company’s own marketing entity. The company’s prepared foods activity in Germany and France has been performed via direct sales to the retail channel through the company’s own sales and marketing entity. The Middle East and North Africa In 2023, 9% of the company’s net sales were in the Middle East and North Africa. In this region, the company distributes its products through independent distributors and company-operated distribution facilities. The company’s leased distribution and manufacturing center in Dubai, the U.A.E. has just-in-time delivery capabilities and includes fresh-cut fruit and vegetable operations, an ultra-fresh juice manufacturing operation and prepared foods distribution. In Saudi Arabia, through the company’s 60%-owned joint venture, the company leases two distribution centers with fresh-cut fruit, vegetable and salad operations, and prepared foods manufacturing of frozen potatoes, ultra-fresh juices, and freshly prepared sandwiches. One of the distribution centers is located in Riyadh, the capital city of Saudi Arabia, and the other distribution center is located in Jeddah, the second largest city in Saudi Arabia. In the UAE and in Saudi Arabia, the company also distributes its products using its own innovative retail concept through the company’s Food and Beverage (F&B) stores. These F&B stores are small retail kiosks selling the company’s fresh-cut produce, juice and other prepared food products; and are strategically located in airports, schools, hospitals and inside hyper-markets. In Jordan, the company owns a vertically integrated poultry business, including poultry farms, hatcheries, a feed mill, a slaughterhouse and a meat processing plant. As part of the company’s vertical integration and expansion strategy in this region, the company developed a 10-hectare ultra-modern hydroponic greenhouse in Jordan to supply lettuce to the company’s fresh-cut facilities, and where the company also has a fresh-cut processing center for supplying lettuce to the Jordan market. The company has one F&B store in Jordan. In Qatar, the company has a sales and marketing office to serve the expanding brand presence in the country and an F&B store located at the Doha airport. In Turkey, the company’s sales office located in Mersin is responsible for sourcing various types of fruit serving the company’s units across the region in addition to selling and distributing a range of prepared food products to distributors. The company has an F&B store in Kuwait in addition to a leased facility to service the Kuwaiti market with the company’s fresh produce products and fresh-cut fruit, fresh-cut vegetables and salads. In Tunisia, the company has an office giving the company presence in the North Africa region, which imports fresh produce products to sell in the local market. The company also has an office in Morocco, which distributes its products locally and exports locally-sourced fresh produce, allowing the company to further expand its coverage in the North Africa Region. The Middle East, North Africa and Central Asian countries represent an area for sales growth and development of the company’s fresh and prepared food products. Utilizing the company’s extensive knowledge of this region, the company plans to continue capitalizing on this opportunity with increased focus in these markets. Asia In 2023, 10% of the company’s net sales were in Asia. The company distributes its products in Asia through direct marketing and large distributors. The company’s principal markets in this region are Japan, South Korea, mainland China and Hong Kong. In Japan, the company distributed 100% of the products the company sold in 2023 through the company’s own direct sales and marketing organization and the company operates three fresh-cut facilities. The company’s products are distributed from four distribution centers located at strategic ports in Japan, which include cold storage. In South Korea and Hong Kong, the company engages in direct sales and marketing activities. In South Korea, the company has three distribution centers that utilize advanced ripening technology and which increase the company’s ability to offer value-added services to the company’s customers. In South Korea, the company also operates a fresh-cut fruit and vegetable facility from which the company supplies major foodservice customers. In Hong Kong, the company has one distribution and banana ripening center. In other Asian markets, including mainland China, the company sells to local distributors. Government Regulation The countries in which the company markets a material amount of its products are the United States, the countries of the European Union (EU), the United Kingdom, Japan, South Korea, and Saudi Arabia. The government regulations the company is subject to include: Sanitary regulations, particularly in the United States and the EU; Regulations governing pesticide use in all source countries and residue standards in all market countries, particularly in the United States, Germany, Japan, and South Korea; Ongoing Endocrine Disruptor Assessment programs in the EU and United States, which may potentially impact availability, use and residue tolerance of some pesticides; and Regulations governing safety, traceability, packaging, and labeling, particularly in the United States where the company is subject to the Federal Food, Drug, and Cosmetic Act and the Food Safety Modernization Act, and in the EU, where food safety policy is governed by the Farm to Fork Strategy which regulates food safety at all stages of the production and distribution process for all food products marketed within the EU, whether produced within the EU or imported from other countries. Research and Development and Intellectual Property During 2021, the company announced a partnership with Queensland University of Technology, located in Brisbane, Australia, to lead innovation toward the development of disease-resistant bananas. The partnership will help to develop bananas that are resistant to Tropical Race 4 (TR4), a serious vascular crop disease that affects one of the company’s principal products, the Cavendish variety of bananas. The company has the exclusive right to use the Del Monte brand for fresh fruit, fresh vegetables and other fresh and fresh-cut produce and certain other specified products on a royalty-free basis under a worldwide, perpetual license from Del Monte Corporation, an unaffiliated company that owns the Del Monte trademark. Del Monte Corporation and several other unaffiliated companies manufacture, distribute and sell under the Del Monte brand canned or processed fruit, vegetables and other produce, as well as dried fruit, snacks and other products. The company’s licenses allow the company to use the trademark ‘Del Monte’ and the words ‘Del Monte’ in association with any design or logotype associated with the brand. The licenses also give the company certain other trademarks and trademark rights, on or in connection with the production, manufacture, sale and distribution of fresh fruit, fresh vegetables, other fresh produce and certain other specified products. In addition, the licenses allow the company to use certain patents and trade secrets in connection with the production, manufacture, sale and distribution of the company’s fresh fruit, fresh vegetables, other fresh produce and certain other specified products. The company has a royalty-free perpetual license to use the Del Monte trademark in connection with the production, manufacture, sale and distribution of all food and beverage products in Europe, Africa, and the Middle East and certain Central Asian countries. The company can also produce, market and distribute certain prepared food products in North America based on an agreement with Del Monte Pacific utilizing the Del Monte brand. The company sells produce under several other brands for which the company has obtained registered trademarks, including UTC, Rosy, Just Juice, Fruitini and other regional brands. The company also sells products under the Mann Packing family of brands, including Mann, Mann's Logo, Arcadian Harvest, Nourish Bowls, Broccolini, Caulilini, Better Burger Leaf and Romaleaf. Seasonality Due to seasonal sales price fluctuations, the company has historically realized a greater portion of the company’s net sales and of the company’s gross profit during the first two calendar quarters of the year (year ended December 2023). The sales price of any fresh produce item fluctuates throughout the year due to the supply of and demand for that particular item, as well as the pricing and availability of other fresh produce items, many of which are seasonal in nature. For example, the production of bananas is continuous throughout the year and production is usually higher in the second half of the year, when the demand for bananas varies because of the availability of other fruit. As a result, demand for bananas is seasonal and generally results in higher sales prices during the first six months of the calendar year. The company makes most of its sales of non-tropical fruit from October to May. History Fresh Del Monte Produce Inc. was founded in 1886. The company was incorporated under the laws of the Cayman Islands in 1996.