Post-Covid, Del Monte sees an uptick

Abhishek Law Kolkata | Updated on March 24, 2021

Plans to expand are also on the pipeline

Sauces and pasta-maker, Del Monte, which operates in India through a JV with Bharti Enterprises, has seen an uptick in its retail business, with in-home consumption picking up particularly across categories. New offerings are also being explored as the company looks to cash in on the “retail tailwinds”.

The B2B segment, which is witnessing the recovery of some sorts as restaurants and QSR chains restart operations, is expected to back to pre-Covid levels post-March. However, some of the key markets’ restrictions due to rising Covid cases could delay recoveries in the segment.

For Del Monte in India, nearly 50 per cent of its turnover comes from retail or the B2C segment, while the other half is from the B2B – sales of sachets and other take away offerings – at restaurants, QSR chains, and so on. Post-Covid, there is a likely shift towards retail offerings.

The company, in a recent analyst call, has said, “JV (turnover) in India declined by 15.8 per cent (on a nine-month basis) in local currency, as B2B business did get impacted by Covid-19.”

According to Yogesh Bellani, CEO of FieldFresh Foods Pvt Ltd (a 50-50 JV between Del Monte Pacific Ltd and Bharti Enterprises), by April, the company is expecting to be “back at pre-Covid levels.”

“Tailwinds in retail and the recoveries in B2B segment should lead to 100 per cent recoveries to pre-Covid levels by end of March or April. We are close to an even base (no growth over last year),” he told BusinessLine.

In their global analyst call, Del Monte maintained that its share in India was “lower than prior quarter as the business continues to recover from the impact of Covid”, particularly on foodservice and quick-service restaurants.

New Products

“Retail and e-commerce sales have surged. We also introduced new products to leverage the continued trend towards home cooking. We have also embarked on major productivity and cost savings to ensure we optimize our costs and protect our margins,” it further added during the analyst concall.

According to Bellani, the company has recalibrated distribution channels, worked on reaching out to Tier-2 markets, where there has been an increase in traction for offerings like pasta and sauces.

Keeping in line with trends, new SKUs (lower-priced pack) and easy to store-and-use packs (called convenience packs) have been introduced post the pandemic.

The JV is also ramping up a product basket that includes olive oil offerings, as it sees “rising health consciousness” amongst the urban populace.

Some of the offerings are lower than the market price, as Del Monte sees growth opportunity in a market with “less than one per cent penetration”.

The fruit juices portfolio has been ramped up too.

Published on March 24, 2021

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

This article is closed for comments.
Please Email the Editor

You May Also Like