American food giant Del Monte Foods has filed for bankruptcy, blaming changes consumer preferences. The company hopes the process will allow a slimmed-down restart under a new owner.
Hoping for a turnaround
Del Monte has been processing canned fruit since 1892 and grew into a global player in that category during the twentieth century. The company describes itself as a Covid-19 victim: during the pandemic, the demand for canned fruit surged, prompting the company to ramp up production. However, demand collapsed when the lockdowns ended, leaving the company with unsold inventory and expensive, unnecessary extra production capacity.
Moreover, the company also points to the cost-of-living crises following the pandemic, which caused many consumers to shift to private labels. With his import tariffs on imported steel, president Trump dealt the fatal blow to the canned goods giant, Mass Market Retailer reports.
CEO Greg Longstreet hopes that the “Chapter 11” process is the “most effective way to accelerate our turnaround and create a stronger and enduring Del Monte Foods”. However, Del Monte’s debt could be as high as ten billion dollars, and it is unclear how much of these obligations would be discharged in a bankruptcy.
