$77 Million Net Loss Due to Excess Inventory
Plans to Accelerate Recovery Through Sale
Del Monte Foods, a leading American food company, has entered bankruptcy protection proceedings in the United States. The company plans to accelerate its recovery through a sale. On July 2, Yonhap News, citing foreign media outlets such as AP and Reuters, reported that Del Monte Foods announced in a statement that it had filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code with the New Jersey Bankruptcy Court, following an agreement with major creditors.
Chapter 11 of the U.S. Federal Bankruptcy Code is a procedure that allows companies to continue operating under court supervision while restructuring their debts. The company stated that it has secured $912.5 million (approximately 1.24 trillion won) in operating funds and plans to continue operations during the bankruptcy process. According to the petition submitted to the court, the company’s assets and liabilities were estimated to be between $1 billion and $10 billion.
Del Monte Foods is the U.S. subsidiary of Del Monte Pacific and sells a variety of products, including canned fruits and vegetables, the broth and stock brand College Inn, and the tea brand Joyba. According to documents Del Monte Foods submitted to the New Jersey Bankruptcy Court, the company’s assets and liabilities are estimated to be between $1 billion and $10 billion, and the number of creditors is estimated to be between 10,000 and 25,000.
Del Monte Foods recorded a net loss of $77 million (104.7 billion won) in the fourth quarter of last year due to excess inventory resulting from sluggish sales and supply chain issues. During the COVID-19 pandemic, demand for shelf-stable canned goods surged, prompting a significant increase in production, but as consumer trends shifted toward healthier foods, the company was left with excess inventory. In addition, as the U.S. subsidiary underwent restructuring, one-time costs such as severance pay and service expenses also increased. CEO Greg Longstreet explained the background of the bankruptcy filing, stating, "After thoroughly evaluating all possible options, we determined that a court-supervised sale process is the most effective way to accelerate our recovery and build a stronger and more sustainable Del Monte Foods."
Meanwhile, Del Monte Foods was embroiled in a human rights controversy in January last year after an incident at a Kenyan farm where pineapple thieves were beaten to death on several occasions. Local residents suffering from poverty stole fruit from the Del Monte farm, and excessive force was reportedly used. As a plantation agriculture company that produces fruit for global distribution using cheap labor from developing countries, Del Monte Foods has also faced ongoing allegations of labor exploitation, child labor, and other human rights abuses.
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