Del Monte Pacific Limited acquires consumer food business of American counterpart Del Monte Foods.
In the beginning of 2014, Del Monte Pacific Limited (DMPL) acquired the consumer food business of its American counterpart Del Monte Foods, offering the Asian giant a foothold in the world’s biggest market. This important milestone gives DMPL a 26% market share of the US canned fruit market and represents a solid growth platform providing long-term opportunities in the South American market, as explained by Mr. Rolando Gapud, Chairman of the Board.
“We are very excited about this historic transaction which quadruples DMPL’s sales from US$500 million to more than US$2 billion, and fortifies DMPL’s vision of becoming a global branded food and beverage company. This is a game-changer for the Company and we will provide full support to DMFI to ensure we execute against our plans for future growth” said Mr. Rolando Gapud.
Canned fruits and vegetables, an ever evolving business
They have been an important culinary element of many households around the world for decades. However, the world is changing and so are eating habits. So will cans go the way of the dinosaurs or will they manage to stay in cupboards and continue feeding the world?
Many studies, including a 2009 US congressional report prepared by the US Department of Agriculture, demonstrate that younger people prefer fresh foods to processed and packaged goods, which could lead us to infer that canned foods will suffer from a steady decline. On the other hand, there are other social and demographic changes, depending on the market, that counterbalance this trend. In the US, for example, the average age of the population is set to increase steadily for many years to come.
Canned foods producers have to face changing eating habits, but they also have to face competing packaging options that are offering viable alternatives.
Culture also plays an extremely important role in the future of canned foods. In the UK, baked beans have never been more popular and represent an impressive 31% of total canned sales. It is quite unlikely that baked beans will become unpopular any time soon, seeing as they are so deeply rooted in British culture.
Over time, rising commodity prices are also likely to favor canned foods which are generally cheaper than their fresh alternatives.
Another important factor to keep in mind is that behind the cans, there often lies ingenious business people such as Rolando Gapud who strive to adapt their offering to the evolving market habits.
The growing trend of healthy foods means that we are likely to see new offerings and a wider variety of canned fruits and vegetables with less salt, sugar and conservatives.
New challenges faced by mass consumption
While offering the advantages of a long shelf life and low prices, canned foods generally suffer from poor consumer perception in terms of healthiness and taste. This is an element big food and beverage companies are intensely working to mitigate as they introduce their new products to different markets around the world.
Difficult to say, then, whether total canned food consumption will increase or diminish in years to come. The business of canned foods faces challenges, just as any other mass consumption product. Nonetheless, current trends and advances in product quality probably mean that canned foods will be around for a long time to come.