Del Monte Foods files for Chapter 11 due to financial challenges

Del Monte Foods, a 140-year-old company, has filed for Chapter 11, seeking a new owner to address financial challenges. The company, known for canned fruits and vegetables, faces declining sales, excess inventory, and debt from a previous deal. It secured $912.5m in financing to continue operations during the sale process.

The move into Chapter 11 reflects changing consumer preferences away from shelf-stable products towards fresh, minimally-processed options. Del Monte Foods may have also faced competition from lower-priced retailer own labels and challenges from recent plant closures. External factors like tariffs and excess inventory further impacted the company’s financial situation.

Del Monte Pacific, the parent company of Del Monte Foods, saw a drop in share price following the Chapter 11 announcement. Del Monte Foods accounted for 70% of Del Monte Pacific’s sales, raising concerns about the impact of the bankruptcy process. Logistics groups listed as creditors will monitor the situation closely as Del Monte Foods continues fulfilling customer orders during the process.

Read more at Yahoo Finance: It’s gone pear-shaped at Del Monte Foods