One of the largest producers of canned fruit and vegetables in the United States filed for bankruptcy protection — but plans to continue operations during a court-supervised sale process.
Del Monte Foods announced July 1 it initiated voluntary Chapter 11 bankruptcy proceedings in the U.S. Bankruptcy Court for the District of New Jersey.
A news release from Del Monte Foods Corporation II Inc. notes the filing impacts the U.S. indirect subsidiaries of Del Monte Pacific Limited, which are not affiliated with certain other Del Monte companies around the world, including Del Monte Canada.
“Certain of the Company’s non-U.S. subsidiaries are not included in the Chapter 11 proceedings and continue to operate as usual,” Del Monte Foods said in the release.
The bankruptcy filing does not impact Del Monte’s processed fruit and vegetable business in Canada.
Fresh produce line not impacted
A spokesperson for Fresh Del Monte Produce Inc. noted the company is a publicly traded, independent company with no corporate, legal, or operational affiliation with Del Monte Foods Inc., a privately held U.S. company currently involved in litigation with certain debt holders.
The two companies operate completely separately, with distinct ownership, leadership, and supply chains, the spokesperson added.
“We remain fully focused on delivering the high-quality Del Monte branded fresh produce that our partners and consumers expect,” the spokesperson said in an emailed statement.
Financing secured
Del Monte’s U.S. business has secured $912.5 million (U.S.) in debtor-in-possession financing to sustain ongoing operations, the company said.
Del Monte Foods added the company “intends to continue serving customers with high-quality food products on an uninterrupted basis.”
Del Monte Foods has entered into a restructuring support agreement with a group of lenders. The agreement contemplates a “going-concern” sale process for all or substantially all of the company’s assets — with support from lenders — aimed at maximizing value for stakeholders.
‘Strategic step forward’
In the release, Greg Longstreet, president and CEO of Del Monte Foods, called the Chapter 11 filing “a strategic step forward for Del Monte.”
“After a thorough evaluation of all available options, we determined a court-supervised sale process is the most effective way to accelerate our turnaround and create a stronger and enduring Del Monte Foods. With an improved capital structure, enhanced financial position and new ownership, we will be better positioned for long-term success,” Longstreet added.
Will Del Monte pivot?
Del Monte, founded in 1886, has vowed to continue operating.
Longstreet noted in the release, “While we have faced challenges intensified by a dynamic macroeconomic environment, Del Monte Foods has nourished families for nearly 140 years, and we remain committed to our mission of expanding access to nutritious, great-tasting food for all. I am deeply grateful to our employees, growers, customers and vendors, as well as our lenders for their support in helping us achieve our long-term goals.”
Sylvain Charlebois, senior director for the Agri-Food Analytics Lab at Dalhousie University, said the food company may need to pivot toward fresher, healthier foods.
“One major headwind for Del Monte moving forward … Consumers are shifting toward fresher and healthier options, reducing sales of traditional canned products,” Charlebois said on X.
Metroland has reached out to Del Monte Canada for comment. This story will be updated once we receive a response.
