Archive for Thursday, December 26, 2002

Del Monte aims to capitalize on Heinz deal

San Francisco-based company has big plans for its newly-acquired facilities, including a Lawrence plant

December 26, 2002

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While other businesses slow down for the holidays, Del Monte Foods Co. is gearing up to try to capitalize on its biggest acquisition in more than a decade of dealmaking.

This week marked Del Monte's first week of running a greatly expanded product line that has doubled the company's size. The additions include Starkist tuna and top-selling brands of pet food.

The new products, picked up in a $2.3 billion spin-off from Pittsburgh-based H.J. Heinz Co., herald the latest incarnation of San Francisco-based Del Monte and its 110-year-old brand.

The deal includes the company's Kibbles 'n Bits dog food line, which is produced at a plant in Lawrence at 727 North Iowa St. Del Monte officials have said the deal is not expected to result in any job losses for the Lawrence facility, which employs 130 people.

"This isn't a plant consolidation story at all," Brandy Bergman, a spokeswoman with Del Monte said when the deal was announced in June. "We're not cutting jobs with this. We're very excited about the brands we are receiving from Heinz."

The company has undergone several makeovers since investors extracted the nation's largest canned vegetable and fruit business from RJR Nabisco in a $1.5 billion leveraged buyout in 1990.

None of the previous deals has been as big as its takeover of Heinz' tuna, pet food, baby food and private-label soup brands.

"There is a lot of hard work ahead of us, but it should be a lot of fun, too," Del Monte Chief Executive Richard Wolford said Monday in an interview between meetings with a few of the 5,700 employees imported from Heinz.

With the newly-acquired Heinz brands, Del Monte expects its annual sales to rise above $3 billion, up from $1.3 billion in the company's last fiscal year ending in June.

Del Monte's work force is swelling from 2,800 to 8,500 year-round employees to handle the heavier sales volume.

The company also hires 9,800 temporary employees each year to handle seasonal fluctuations in production.

The Heinz brands will add more variety to a Del Monte product mix that has been dominated by fruits and vegetables. Besides Starkist tuna, Del Monte also is picking up several other well-known brands, including 9-Lives cat food.

Wolford said Del Monte isn't planning any immediate changes among its new brands except in the baby food line, where the name of Heinz Nature's Goodness will be switched to the Del Monte label.

"We think the Del Monte name will work much better with (baby food) because consumers think of the brand as dependable, trustworthy and wholesome," Wolford said.

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