Del Monte Pacific partners with Fresh Del Monte Produce
They will develop a new retail F&B concept through a series of joint ventures.
Del Monte Pacific Limited (DMPL) announced that it has entered into a series of joint ventures with Fresh Del Monte Produce Inc. (FDMP) to expand its refrigerated offerings across all distribution and sales channels, and to develop a new retail food and beverage concept.
According to DBS Group Research, the concept will be modelled after Fresh Del Monte Produce’s business in the Middle East.
"There was scarce detailed information shared in the joint conference call announcing the JVs, citing the formalization of business plans. Pending further details, our initial take is that contributions from the new JVs are likely to be limited to DMPL in the near term," DBS analysts Andy Sim and Alife Yeo noted.
Over the longer term, the two said this move could be positive to Del Monte Foods Inc (DMFI) in its expanded product offerings, and help to mitigate declining sales in the canned food category.
"With the JVs, we believe this could help in removing overhang for products such as refrigerated fruit/snack cups which borders along the interpretation on whether it is fresh or packaged," the analysts said.