From its Coral Gables Headquarters, Del Monte Fresh Produce Coordinates the Weekly Distribution of Approximately 100 Million Bananas in the U.S. and Canada. Plus, Much More
By Doreen Hemlock
Walk through downtown Gables, and it’s hard to miss the red sign on an office tower for Del Monte Fresh Produce. But few people are familiar with the press-shy company, which is sometimes confused with its canned food sibling, Del Monte Foods.
Del Monte Fresh Produce employs some 275 people on Sevilla Avenue in a farm-to-store business that mainly grows, transports and sells fresh fruits and vegetables. Coral Gables hosts the U.S. executive office for the brand, whose holding company now ranks among the world’s biggest distributors of bananas, pineapples and other fresh produce. Just in North America, the company distributes about 100 million individual bananas every week.
Spun off from Del Monte’s canned food unit in the 1980s, the produce venture has been evolving since the 1990s under the leadership of Mohammad Abu-Ghazaleh. He took the holding company Fresh Del Monte Produce Inc. public on the New York Stock Exchange in 1997 and retains a large stake. His team has diversified the business from bananas and pineapples, even developing cutting centers for grab-and-go packages. The company now also makes juices and some prepared foods. Worldwide, sales last year topped $4.4 billion in 80-plus countries.
“No one else in the produce industry comes close to offering the range of products and services Fresh Del Monte does,” says equity analyst Mitchell Pinheiro, CFA, who has been following the company at Sturdivant & Co. and other firms. He calls Abu-Ghazaleh “a visionary.” Running day to day operations from the Gables is Youssef Zakharia, president and chief operating officer since 2016. Among his recent corporate initiatives: buying Mann Packing Co., a California business that grows and markets fresh vegetables and had $535 million in annual sales when acquired. He’s diversified the company’s executive team to include leaders from the U.S., Italy, Jamaica, Guatemala, and other nations. And he’s launched the company’s Fresh Cut Grab-and-Go line in resealable containers, including some that fit into car cupholders.
From Drones at Farms to Bistros in the Middle East
Innovation extends beyond products to technology, too, says COO Zakharia. “For example, in the Middle East, we have been experimenting with growing lettuce and other fresh products in greenhouses. On our farms in Central America, we have been using drones to monitor the health of the plants.” The company also is trying out new channels for distribution, including its own bistros. “These stand-alone café establishments are offering a wide selection of healthy food and beverage options directly to consumers, initially in the Middle East,” says Zakharia. Plans call for expanding the cafes into the United States, with the first scheduled for its Coral Gables locale before the year end.
For analyst Pinheiro, it’s “smart” that Fresh Del Monte is reducing its reliance on bananas, long the company’s core product. “The banana business is not predictable. Pricing changes every three months with a new crop. [Profit] margins are low. Household penetration is high. There’s really not a cheaper fruit,” he says. He likes that management is expanding into fruits that command higher prices, from blueberries to avocados and mangoes. And he’s keen on the company leveraging its assets – from packing plants to refrigerated ships and warehouses with ripening rooms – to offer a wider range of products and services to wholesalers, retailers and other customers.
“Fresh Del Monte now can come to a U.S. supermarket, and say, ‘We’re a one-stop shop,’ even offering to chop fresh fruits and vegetables at its U.S. cutting centers for stores that increasingly outsource that task,” says Pinheiro. “No one else can do that.” Still, bananas continue to represent nearly 40 percent of the company’s worldwide sales, or $1.7 billion of last year’s revenue. That ranks it among the world’s top three suppliers
of the fruit, together with Dole Food Co. and Chiquita Brands International.
Growing and distributing bananas are not without their challenges, however, with crops subject to pests, bad weather, and natural disasters. “We have farms in Guatemala, and the recent Fuego Volcano eruption is a good example of the kinds of incidents we have to be ready to respond to every day,” says Zakharia, including sending emergency aid to workers and their communities.
Investing to Produce Pink Pineapples
The company has been diversifying partly by launching its “Gold Extra Sweet” variety of pineapples in the 1990s. It grows the variety mainly in Costa Rica and the Philippines. Last year, “Gold” pineapples accounted for nearly $500 million of its revenue, helping make Del Monte Fresh Produce the single largest supplier of fresh pineapples worldwide.
“But we are not resting on our laurels,” says Zakharia in answers by email. The company’s pineapple efforts even include development of new pink-flesh fruit that already has been approved by the U.S. Food and Drug Administration for eventual U.S. sale. Changing the color of a fruit is a long way from Del Monte’s start. In 1886, the name first appeared on a premium coffee blend, packaged for the prestigious Hotel Del Monte in Monterey, California. The future, Zakharia says, portends lots more innovation for the fresh-produce dynamo, with its roots in Coral Gables.
Fresh Del Monte Produce Inc.
Business: Produces, markets and distributes fresh fruits and vegetables worldwide under the Del Monte brand. Also sells fresh-cut produce, juices, prepared foods, and more. Global Headquarters: Cayman Islands. US Executive Office: Coral Gables. Financials: $4.4 billion in sales and $38.6 million in operating income in 2018. Bananas provided $1.7 billion in revenue, “Gold” pineapples $488 million, and fresh-cut fruits and vegetables $943 million. Sales now span 80-plus nations. Ownership: Trades on the New York Stock Exchange as FDP. Employees: Roughly 40,500 full- and part-time staff at farms, packing plants, refrigerated ships and trucks, warehouses, food-cutting centers, offices and other facilities. In Coral Gables: Employs 275 people at 214 Sevilla Ave. in transport, corporate IT, and other fields. Former parent company bought West Indies Tropical Fruit of Coral Gables in 1968, establishing its presence in the city a half-century ago. CEO and chairman: Mohammad Abu-Ghazaleh. Has led Fresh Del Monte since the 1990s and, with his family, owns a large stake. Also chairs In- ternational General Insurance Co. and the Royal Jordanian Air Academy. President and COO: Youssef Zakharia. Started with the company in 2000 as director of operations for the Europe, Africa, and Middle East regions. Some Recent Initiatives: Bought Mann Packing Co. of California for $361 million. Investing at least $100 million over seven years in banana operations in Panama.