Once a staple around most American dinner tables, Del Monte is going bankrupt. After losing $1.2 billion, it has struggled with rising borrowing costs, pandemic-related missteps, and a changing global economy.
Beginnings
The financial problems began in 2014 with Del Monte Pacific Limited, which borrowed to finance the acquisition. Del Monte has faced several economic issues and concerns for several years. During the 2020 pandemic, when more people were eating at home, demand rose to record highs. Once the demand eased as people returned to workplaces, Del Monte was left with overstock. As money became tight, consumers chose store brands, or private labels, rather than national names like Del Monte.
Additionally, tariffs on steel and aluminum also increase the cost of cans. Roughly 80 percent of the steel used for cans for food comes from abroad.
Now, these prices could change as Americans gear up and work. However, the trickle-down economy does take time.
Plans
This California company said it had agreed to a restructuring agreement with lenders that calls for Del Monte to sell “all or substantially all” of its assets. The nearly 140-year-old company is entering Chapter 11 proceedings as part of a restructuring support agreement (RSA) with its lenders. It has secured a commitment of $912.5 million from its lenders, which will help fund the company throughout the going-concern sale process and enable it to continue operating.
