SAN FRANCISCO — Del Monte Foods Corp. is “pulling on all of the levers” in an attempt to rejuvenate sales and earnings within its Consumer Products business, said Dave West, chief executive officer.
Operating income in the Consumer Products division was $10.2 million in the first quarter ended July 28, down 26% from $13.8 million in the same period a year ago. Net sales fell 5.5% to $342.9 million from $362.8 million.
In a Sept. 11 conference call with analysts, Mr. West discussed how the company is attempting to reboot the brand to drive sales.
“I think we’re on the right trajectory,” he said. “We started really principally last Thanksgiving with the advertising campaign on the Del Monte brand. We ran green beans in the latter part of the year around Thanksgiving and holiday. We ran fruit advertising in the early part of this calendar year and then came back again with green beans around Easter. We’re very pleased with the advertising copy that we have.
“Packaging graphics are changed, and you’ll see a new packaging look at the shelf. That’s flowing in now as we get into this pack so you’ll start to see that on shelf now.”
Mr. West said Del Monte also is upbeat about the launch of Fruit Burst Squeezers, which he said is Del Monte’s first real platform innovation since the company restaged the brand.
“We are pulling on all of the levers,” he said.
In addition to advertising, packaging and innovation, Del Monte has cast a closer eye toward pricing and promotional strategy, Mr. West said.
“We think, given the underlying equity support that I just mentioned across packaging and promotion and certainly around the advertising of the brand, we believe that the brand can command better price realization,” he said. “We’ve taken price increases. We’ve also pulled trade out. We’ve had pretty widespread retailer support with respect to the plans and the progress that we’re making. So I feel good about where we are. There’s always going to be bumps in the road in these things. At this point I’d say I’m really proud of the effort of the team and excited about where we’re taking the brand.”
Overall net income at Del Monte in the first quarter ended July 28 was $19.9 million, up from $6.3 million in the same period a year ago. Net sales were $823.9 million, up from $821.1 million.