We are a global branded food and beverage company that caters to today’s consumer needs for premium quality, healthy products.
The economic impact of Del Monte Philippines, Inc. benefits more than our 3,500 regular employees. In addition, we have engaged service providers in all areas of our operations.
Our pineapple plantation in the Philippines encompasses 10 municipalities in Bukidnon and seven towns in Misamis Oriental, Mindanao. We engage with over 50 supplier partners which provide various goods and services to the Company.
An estimated 15,000 families or approximately 75,000 individuals directly or indirectly depend on the Company in southern Philippines.
Overall, our presence has immensely contributed to the region’s economic growth, creating a multiplier effect on the local economy by fueling local business, supporting the Company’s operations as well as serving day-to-day needs of our employees and their families.
Del Monte, S&W and Contadina products in the Philippines
Our Performance
“If you always do what you always did, you will always get what you always got.”
Albert Einstein
For FY2018, the Company generated sales of PhP 27.6 billion in the financial year ending April 2018 (“FY2018”).
About two-thirds of DMPI’s sales are in the core Philippine market, and the balance in exports which gives the Company a natural hedge against the US dollar. Sales in the Philippines expanded by 5% to PhP 17.2 billion, offsetting the marginal 2% decline in export sales to PhP 10.6 billion, resulting in a 3% growth in total DMPI sales. DMPI maintained its dominant market position in the Philippines in categories it competes in.
In the past three years since DMPI generated sales of PhP 22 billion in FY2015, sales have grown to PhP 27.6 billion at a compounded annual growth rate of 7.9%, higher than GDP growth. The Company expanded sales in the Philippines across all categories led by culinary, followed by beverages and packaged fruits, as well as channels led by foodservice, followed by modern trade and general trade.
From a net income PhP 1.1 billion in FY2015, its earnings have significantly increased by PhP 1.5 billion to PhP 2.6 billion in the past three years at a compounded annual growth rate of 31%. The Company achieved this through improvement in gross profit from higher sales volume, margin increase from the Philippine market, higher mix of fresh pineapple sales under S&W, aided by the weak peso versus the US dollar, revaluation of biological assets, improving operational efficiency and cost management.
- Philippines sales in FY2018 were higher by 5% at PhP 17.2 billion as foodservice sales grew by a robust 15% to PhP 3 billion, riding on the rapid expansion of quick service restaurants and convenience stores as well as the Company’s growth of its juice dispensers, meal partnerships and customized products.
- The Company expanded its sales under S&W fresh and processed pineapple to PhP 3.3 billion in Asia and Middle East markets, white it reduced its private label and commodity business during this period. S&W fresh sales rose more than ten-fold in the past 10 years.
- Total export sales, however, were slightly down by 2% to PhP 10.6 billion, due to lower sales of processed pineapple products to private label caused by excess supply from Thailand and Indonesia. DMPI operates a fully-integrated 25,000-hectare pineapple plantation in Bukidnon, one of the largest in the world.
- In retail, the packaged fruit and culinary categories also grew strongly by 8%. DMPI continued to invest in driving inclusion of Del Monte products in consumers’ weekly menu through its marketing campaigns.
- DMPI’s innovation thrust was led by the launch of Del Monte 100% Pineapple Juice in carton, the Company’s fast-growing beverage segment in FY2018.
- The Company also made its initial foray into the juice with particulates market with the introduction of Del Monte Juice & Chews in bottles, a delicious snack-in-a-drink combining nata and pineapple bits, and entered the isotonic drinks market with Del Monte Fit ‘n Right Active, a refreshing sports drink with electrolytes and L-carnitine for rehydration and weight management.
- Launched in FY2017, Del Monte Creamy and Cheesy Spaghetti Sauce continued to achieve strong double-digit sales in FY2018 as the only spaghetti sauce with added cream and cheese in the market, while Contadina, launched in the same year, also continued to post healthy double-digit growth and is now the market leader in imported pasta sauces in the Philippines.
- Innovation anchored on health and wellness contributed to about 20% of the growth of the Company in the past 10 years with sales increasing more than three-fold to PhP 17.2 billion. The most successful innovation have been Fit ‘n Right drinks, Pineapple Tidbits in pouches, Pineapple Juice Heart Smart and Juice Drinks in carton.
- Innovation goes beyond launching new products, includes our processes, and cuts across all functions of our Company – in agriculture, production and supply chain, marketing and sales, digital, support functions and renewable energy.
- The Company donated PhP 26.3 million to various foundations and institutions in the Philippines to fund numerous projects such as scholarship grants, technical training to unemployed community members, feeding programmes and relief operations.
Materials delivered to the JMC pack house in Bukidnon, Philippines
Responsible Sourcing Practices
The Company acknowledges the importance of building a strong partnership and healthy relationship with its suppliers. Accordingly, the Company conducts business with all customers on the basis of integrity, mutual interest and fairness. The Company prohibits the practice of forced and child labor.
In selecting suppliers, Del Monte uses its Supplier Quality Management Program (SQMP) which assesses the quality and delivery performance, feedback, recognition and continuous improvement program for all direct materials suppliers and toll manufacturers.
- The Company performs periodic audits of contract manufacturers and direct suppliers. Some independent and unannounced audits are used to address quality assurance and compliance issues.
- It is our policy to seek out opportunities to buy from these suppliers where price, quality and delivery of service are competitive.
- DMPI issued a Code of Business Conduct to its suppliers which 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.
- The Company has an SQMP for direct materials suppliers and toll manufacturers as an aid in the selection of best suppliers for the Company.
- The objective of the program is to align DMPI’s quality parameters with that of suppliers, provide suppliers with performance scorecards, classify suppliers into certified, preferred, approved and conditional suppliers, and align suppliers with DMPI’s goals that would help support growth in the next five years. The program serves as a tool to determine allocation of the Company’s requirements to suppliers.
- The suppliers are rated based on quality performance, delivery performance and competitiveness.
**********
SUSTAINING GROWTH
The economic impact of Del Monte Pacific Ltd (DMPL) Group extends beyond our 5,800 plus regular employees. In addition, there are about 23,500 employees of service providers who work in all areas of our operations.
Our pineapple plantations in southern Philippines encompass one city and 12 municipalities in Bukidnon and one city and six municipalities in Misamis Oriental, Mindanao. An estimated 20,000 families or approximately 100,000 individuals directly or indirectly depend on the Company in the Philippines.
Overall, our presence has immensely contributed to the region’s economic growth, creating a multiplier effect on the local economy by fueling local business, supporting the Group’s operations and serving the day-to-day needs of our employees and their families.
Our Performance
Use same infographic as the Annual Report
1. The Group’s revenues were favourably impacted by the coronavirus pandemic. DMPL’s retail business in the Philippines posted higher sales. The lockdown has made consumers stock their pantries which offer healthy, delicious, long shelf-life culinary products.
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.
2. The Group generated a turnover of US$2.1 billion in FY2020, 9% higher than prior year.
Gross margin improved by 100 basis points to 21.2% due to better volume and sales mix.
3. DMPL reported a lower EBITDA of US$142.2 million and a net loss of US$81.4 million due to one-off expenses totaling US$113.6 million, primarily resulting from US$59.9 million from the plant closures/sale in the US in the second quarter of FY2020, which were mostly non-cash expenses, and US$47.1 million dividend tax.
4. Without one-off expenses totaling US$113.6 million, the Group generated an EBITDA of US$225.7 million and a net profit of US$32.2 million, significantly higher by 45% and 104%, respectively.
Note: Copy infographic from FY20 Annual Report
New infographic/images
5. The Group will strengthen its product offerings and enter new categories. It will focus on business segments which are on trend and innovate in pursuit of health and wellness to address consumer needs.
6. Del Monte Pacific will grow its branded business while reducing non-strategic business segments. It will build its distribution in emerging channels and continue to leverage fast-growing e-commerce opportunities especially amidst the lockdown.
Del Monte products available online in the Philippines
Del Monte single-serve juices
- The Group completed the private equity investment of a 12% stake in Del Monte Philippines, Inc (DMPI) for US$120 million, the proceeds of which were used for repayment of DMPL’s bank loans. This is highly commendable amidst a stressed and declining capital market with the PSE index down around 25% from the peak of 2019.
Note: Copy infographic from FY20Annual Report
7. DMPI leads in market share position in major categories it competes in.
Del Monte Quick 'N Easy products makes cooking easy for the busy body
Demand Planning Team with Cheryll Anne V Valino, Senior Manager
Finance Team with Parag Sachdeva, Chief Financial Officer
Responsible Sourcing Practices
1. DMPI has a Code of Business Conduct which 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.
Trucks picking up products at our facility in Mindanao, Philippines
2. In selecting suppliers, Del Monte in the Philippines uses its Supplier Quality Management Programme which assesses the quality and delivery performance, feedback, continuous improvement programme for all material suppliers and toll manufacturers.
3. The objective of the programme is to align DMPI’s quality parameters with that of suppliers, provide suppliers with performance scorecards, classify suppliers into certified, preferred, approved and conditional suppliers, and align suppliers with DMPI’s goals that will support growth in the next five years. The programme helps determine allocation of the Company’s requirements to suppliers.
4. The suppliers are rated based on quality performance, delivery performance and competitiveness.
Procurement Team with Angel V Gatchalian, Jr, Procurement Head
