- Fresh Del Monte signed a deal to acquire Mann Packing for $361 million, the company said in a statement.
- The acquisition will diversify Fresh Del Monte’s portfolio with Mann Packing’s lineup of fresh vegetables, including washed and ready-to-eat offerings. Mann Packing’s annual sales were approximately $535 million in 2017.
- “Mann Packing’s strength in the vegetable category, one of the fastest growing fresh food segments, will allow us to diversify our business, leverage our distribution network and infrastructure and increase our market reach," Mohammad Abu-Ghazaleh, chairman and chief executive officer of Fresh Del Monte, said in the statement. "In addition, this transaction will provide us with synergies, enhancing our ability to better serve our combined customers and address consumers’ needs for healthier products."
As consumer's increasingly turn away from packaged goods in favor of fresh fruits and vegetables, Fresh Del Monte is tapping into what's hot with this latest deal. The fruit and vegetable processing market is projected to grow at a compound annual growth rate of more than 7% percent in the U.S. to reach $346 billion by 2022.
"This acquisition is a significant step toward our goal to be the world’s leading supplier of healthful, wholesome and nutritious fresh and prepared food and beverages for consumers,” Abu-Ghazaleh said in the release.
The acquisition and diversification will also help Del Monte, best known for its bananas, better navigate a volatile commodities market. Gross profit on sales during its third quarter of 2017 fell to $5.7 million, down from $39.6 million in 2016, with an oversupply of bananas a major culprit, according to The Packer. Gross profit also slipped to $58.3 million versus $118.8 million. During its earnings call, the company said growth in other fresh produce like avocados and pineapples helped offset the banana challenge, The Packer reported.
With this purchase, Fresh Del Monte expands beyond bananas and canned veggies and fruit into more fresh-cut vegetables, including Mann Packing’s latest organic offerings — green beans, cauliflower and super blend. Organic sales in the U.S. totaled approximately $47 billion in 2016, up almost $3.7 billion from the previous year, according to the Organic Trade Association. Organic food accounted for 5.3% of total food sales in the country in 2016, OTA reported, and the fruit and vegetable sector accounted for almost 40%.
Fresh Del Monte's purchase helps expand its product line and complement its roster of fruits and vegetables that it is synonymous for. It already has a keen understanding of what consumers are looking for in this space, and should be able to find synergies between its own product line as well as look for ways to expand the value-added vegetable products — such as shaved brussels sprouts and butternut squash zig zags — that Mann Packing sells.
Another reason for the deal likely hinges on Mann Packing’s lineup of fresh vegetables, including washed and ready-to- eat offerings. As consumers snack more, with many people focusing their eating on fresher, better-for-you items, Mann's has a lineup of products like its nourish bowl with butternut squash, brown rice and kale, a honey turkey cheddar tray and an organic hummus tray designed for a person who is on the go and wants to eat healthy. With its latest deal, Fresh Del Monte looks to be in the sweet spot to capitalize on changing consumer trends.