Fresh produce giant Fresh Del Monte is posting higher profits thanks to its "strategic shift" to becoming a more diversified, value-added business, its chairman and chief executive has said.
Mohammad Abu-Ghazaleh was commenting following the publication of the group's fourth quarter and full-year results, which saw the business post net sales for the full year of $4.49 billion and gross profit of $300.6 million (up from $279.8 million the previous year).
Realigned Focus
“In 2019, we benefited from our 2018 initiatives to realign certain production units, as well as early returns on our 2019 strategic shift to focus on becoming a value-added and more diversified company,” Abu-Ghazaleh commented.
“The emphasis on strengthening our core businesses led to higher gross margins and increased profitability. We also saw continued demand in our value-added fresh-cut and avocado product lines."
Fresh and Value-Added Products
In terms of the group's various divisions, its Fresh and Value-Added Products segment saw sales rise to $2.70 billion (2018: $2.65 billion) for the year, due to higher sales in its fresh-cut, avocado, vegetables and prepared food product lines.
Avocado sales were up 16%, while Non-Tropical fruit saw a 14% sales increase, and Fresh-Cut Vegetables were up 9%.
However, sales were lower across its pineapple, non-tropical fruit, melon and tomato product ranges, it said. Volumes across the Fresh and Value-Added Products division were 6% lower in 2019.
Bananas
Its Bananas segment, however, continued to find the going tough, with net sales of $1.66 billion, compared with $1.70 billion in 2018.
The decrease in net sales was primarily due to lower sales volume in North America, Asia and Europe, the group said, partially offset by higher net sales in the Middle East
Future Outlook
Nonetheless, Abu-Ghazaleh was bullish about the group's future performance.
"Fresh Del Monte Produce is a different company today than it was a year ago," he said. "While we are encouraged by these results, we believe our transformation process will continue as we drive innovation and growth in our value-added businesses and leverage our core products to drive consistent revenue and earnings growth for the long-term.”
© 2020 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.
