Canned foods giant Del Monte files for bankruptcy protection
Del Monte has secured $912.5 million US in debtor-in-possession financing that will allow it to operate normally as the sale progresses.
"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," CEO Greg Longstreet said in a statement.
Del Monte Foods, based in Walnut Creek, Calif., also owns the Contadina tomato brand, College Inn and Kitchen Basics broth brands, as well as the Joyba bubble tea brand.
The company has seen sales growth of Joyba and broth in fiscal 2024, but not enough to offset weaker sales of Del Monte's signature canned products.
"Consumer preferences have shifted away from preservative-laden canned food in favour of healthier alternatives," said Sarah Foss, global head of legal and restructuring at Debtwire, a financial consultancy.
Grocery inflation also caused consumers to seek out cheaper store brands. And U.S. President Donald Trump's 50 per cent tariff on imported steel, which went into effect in June, will also push up the prices Del Monte and others must pay for cans.
Del Monte Foods, which is owned by Singapore's Del Monte Pacific, was also hit with a lawsuit last year by a group of lenders that objected to the company's debt restructuring plan. The case was settled in May with a loan that increased Del Monte's interest expenses by $4 million US annually, according to a company statement.
Del Monte said late Tuesday that the bankruptcy filing is part of a planned sale of company's assets.
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