- Dole is exploring acquisitions and "sourcing efficiencies" as it looks to expand its offerings of increasingly popular produce, company executives told analysts last month.
- "We've historically grown total produce through acquisitions and we continue to look for synergistic M&A opportunities," said CEO Rory Byrne.
- Plans to expand to fast-growing produce categories come as the company consolidates sourcing operations in South Africa and Europe. Dole also expects to "make further strides with sourcing efficiencies" in South America, according to COO Johan Lindén.
Dole, which merged with Ireland-based Total Produce last year to create the world's largest fresh produce company and launched an IPO, seeks to grow its presence in popular produce markets as it faces supply disruptions to other products.
The company plans to boost market share in avocados, berries, salad kits and organic produce, which have grown to represent around 25% of Dole's total revenue, according to Byrne. Dole is focused on product innovation in these categories as well as "additional opportunities for growth," including potential acquisitions.
The emphasis on berries and other popular produce comes as Dole faces supply challenges with bananas and packed vegetables.
The company raised prices on bananas as farms in Guatemala and Honduras struggled to rebuild supply last year after two hurricanes swept through the region in late 2020. Dole spent $16 million in replanting efforts in Honduras, and Byrne said force majeure pricing covered the "significant cost" associated with hurricane damage.
At the same time, an oversupply of vegetables is pushing Dole to plant less to reduce its market exposure in 2022. Shipping delays and a lack of refrigerated containers have slowed agricultural exports, leaving the U.S. market awash in certain products and causing prices to decline, according to produce suppliers.
Dole has its own shipping fleet, allowing it to largely avoid export issues impacting other suppliers. The company operates 11 ships, including two it acquired in 2021.
"Having our own fleet of ships provides greater certainty of distribution and enhances our supply chain transparency and control," Byrne said.