Market Analysis for Del Monte Foods Company

Published: 2019-06-26 10:30:00
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Del Monte Foods is a company which originally existed in the Northern part of America, and which currently deals with the production and distribution of foods. According to Del Monte Foods Inc. (2015), this Company has its headquarters in Oak Road, Walnut Creek, California in the United States of America. As one of the largest distributors of food items in the United States, Del Monte Foods has an annual turnover of over 1.8 billion. The food items that the company produces and distributes include; Del Monte juices, Contadina, fruit burst, college in etcetera (Del Monte Foods Inc, 2015). Apart from the production and distribution of the aforementioned foods, the company also trades in private label foods. Some of the companys foods items rank top three in terms of market share.

Del Monte supplies its products to the US retailers. In this regard, it has several plantations of pineapples where it uses them as the raw material for the processing of packed juices. These juices are later on supplied within and outside the country. The major market for the company is retailers who sell the products to the final consumers. Specifically, supermarkets and other hypermarkets receive the products from the company and sell them to the residents of the United States. The management of the company is very conscious of the market standing of the company. Although the company has a nationwide appearance, it has nevertheless failed to venture into some of the new markets. As such, this paper seeks to discuss the details of the company, its market competitiveness and how it can successfully venture into new markets of operation. Specifically, the paper will discuss the marketing strategies that the company can employ so that it can succeed in the new markets. This will be done through a SWOT analysis that will view the strengths, weaknesses, opportunities and threats the Del Monte Food Company faces in the course of its operations.

When California became the major producer of fruits and vegetables in the 1880s, there was a need for a way in which the products could be distributed. As such, Del Monte, which was then a foods distributor for a particular type of coffee, was started in 1886 (Del Monte Foods Inc., 2015). This coffee was to be sold in hotel Del Monte which was located in the Monterey peninsula. In 1892, the company expanded using the name Del Monte for its brand name for canned peaches. Six years later in 1896, the California Food Canners Association was formed as a result of the merger of 18 West Coast Canning Companies. In the merger, Del Monte was one of the brands that were marketed. In 1909, the Del Monte Shield Brand was introduced in the market. In 1916, CCFCA changed its name to California Packing Corporation (CALPAC) after it added two canners as well as a brokerage house. A year later, the new company was operating in excess of 60 canneries in Utah, Washington, Idaho, foreign, Washington and Alaska. Later in the year, CALPAK acquired pineapple farms in Florida, Hawaii and the Philippines. Immediately after the Second World War, CALPAK obtained structures and facilities overseas. As a result, the California packing corporation was defaced. In 1967, Del Monte severed its ties with the corporation and hence adopted the name of its leading brand to become Del Monte Corporation. In 1972, Del Monte Corporation was the first US Company in food processing to adopt nutritional labeling on almost all its food products. Between 1979 and 1998, Del Monte Corporation had acquired states in many companies. In 2000, the company acquired rights in Sunfresh brand which was initially a blend of citrus and tropical fruits (Del Monte Foods Inc., 2015). The following year saw Del Monte rise to greatness as it became the leading distributer of fresh juices.

Del Monte Foods has three important mission statements that it seeks to achieve. Firstly, the company intends to be the world leader in the production and distribution of fruits and fruit products. In this regard, Del Monte Foods has many plantations in different parts of the country where it obtains fresh pineapples as well as other fruits. Additionally, it has the best machinery that enables it to be the largest company on that field. The second mission statement of Del Monte Foods is to revolutionize the food industry. In this regard, the organization intends to sell its labeled packed foods to different parts of the world. Due to the high chances of the fruits perishing and their products, many companies have feared venturing into the food industry. As such, Del Monte Foods wishes to take the advantage and prosper in the industry. The third mission that forms the core intention of the company is to continuously build their knowledge in agriculture. In this regard, the company mission is to make the lands sustainable for increased output while at the same time maintaining the lands that are cultivated. The commitment to corporate social responsibility and the preservation of the environment is the fourth mission of the company. In this case, Del Monte foods focus on eliminating environmental pollutants as well as the giving back to the society. The last mission statement is to have deep market knowledge that will enable them use the current technology in the production and processing and distribution of foods.

Although Del Monte foods has been performing very well in the market. There is a need for it to have more competence. In this regard, the company can increase its competence by first having the necessary workforce that matches with its expected results. In this regard, the human resource department should be careful in the deployment of new recruits. Specifically, they should only deploy those employees that are result oriented and those who can add value to the organization. Besides any employee who does not match with the mission of the company is not worth working for it. The second things that Del Monte foods can do to increase their competence is by using the current technology in its operations. This is from the blending of their fruit juices to the distribution of the fruits. Specifically, the company should employ the technology that is necessary for increasing its productivity and eventually its profits. The third and last thing that is necessary for increased competence in the company is use of proper marketing mechanisms and strategies. In this regard, the company should try engagement marketing which will ensure that the customers are involved in the making of new brands of products. This way, the company will have increased sales because most of the customers will get the products that match their taste.

SWOT Analysis for Del Monte Foods

SWOT analysis is a model that is used to gauge the market viability of any particular business. This is because it evaluates the strengths of the company, the weakness, opportunities and threats that exist. As such, this paper is going to use the analysis to establish the viability of Del Monte foods in the market.

Strengths

One of the strengths that Del Monte foods has is it large market share that it enjoys. Specifically, the company enjoys a whopping 30% of the total market for the fruit juices. Additionally, the company has the advantage of the assets that it owns. Specifically, the assets ranging from machinery, lands and blending intellect is a strength that other competitors dont enjoy. Further, the company enjoys market leadership in the segments that it operates. This is important since the customers are already accustomed to the products that it offers. The uniqueness of the brands that the company offers is also another strength that differentiates it from other companies. In this case, the companys brand of products are made out of a blend mechanism that is only available to them.

Weaknesses

One of the biggest weaknesses of Del Monte foods is its inability to penetrate into the developing countries. Unlike other companies who have pitched tents in the emerging economies, Del Monte Foods is only felt in the developed countries. Additionally, its products are mostly supplied in the first world countries. The second weakness that it has is its narrow product range. In this regard, the company offers products that are only related to fruits and juices. Although its name suggests that it deal with foods, the company is only focused on a certain range of foods. As such, other competing companies who offer a wider variety of products benefit more due to the diversity that they enjoy.

Opportunities

Despite the weaknesses that Del Monte food has, it still has opportunities that can enable it better its service provision as well as increases the profits that it makes (Euromonitor.com, 2015). In this regard, the company has the opportunity to advertise and market itself more in the developing countries. Due to its large capital base compared to its competitors, Del Monte foods can still make a grant entry into the emerging economies. Secondly, the company has the opportunity to introduce new products that are related to the ones it offers. Instead of relying only on fruit juices, the company should consider getting into the general food business which will increase its diversity. Del Monte food has the opportunity to expand to the untapped markets. In this case, it can use its financial power to start its business in countries that do not have companies majoring in fruit and juice products.

Threats

The greatest threat that Del Monte faces is the rise in the cost of raw materials. Although the company has its own plantations of pineapple, it, nevertheless doesnt have plantations for other fruits. As such, it relies on suppliers. This is a threat since the cost of those materials has continued to rise. In future, there might be strong competition from the emerging companies. In this case, the company will have to up its game so that the new entrants do not grab a percentage its market share. Additionally, the company is likely to lose from the emerging companies which are using the latest technology to produce their products. Lastly, the economic slowdown in the Euro zone areas is a threat that Del Monte food needs to be prepared to face.

The target markets for the products are the developing countries in Africa and in other European and South American countries. This is because the companies in the African countries have been very successful due to the emerging economies of most African states. In these markets, Del Monte foods will seek to introduce its existing products as well as other new brands which are to the taste of the locals. Compared to the companies who have ventured into the African market, the probability of success is very high. Therefore, a venture into the market will lead to more sales and hence increased profits.

For the company to succeed in marketing its products in the new market it has to device several marketing methods. The first of those is the use of engagement marketing. This method will involve the company using the locals in the making of a brand that will auger well with them. In this case, the locals of those new markets will be able to feel that they own the products and that the brands are not foreign to them. The second method that will be used is that of social media. The internet has become the best means of communication in the world today. Therefore the use of social media to display their product to those markets will make them gain popularity (Jaffrey, 2011).

Celebrity advertising is another method of marketing that the company can consider employing. In this case, the company will use the services of a renowned person who will use the products so that people in the target market can know the importance of the brand. Specifically, the company can procure the services of prominent peop...

sheldon

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