Del Monte Enters Chapter 11: A New Era for the Canned Food Industry

as reported by the New york Times, Del Monte Foods has recently declared bankruptcy, grappling with a staggering $1.2 billion in secured debt. This financial turmoil stems from various factors, including soaring interest rates, production challenges during the pandemic, and increased costs for imported cans due to tariffs on steel and aluminum.

On July 1, del Monte officially filed for bankruptcy while entering into a restructuring agreement with its creditors that involves liquidating assets to settle debts. Established 140 years ago,this canned food powerhouse has become one of the leading food manufacturers in the United States,offering an array of products such as canned vegetables,fruits,broths,and tomato sauces.

“After carefully considering all our options,” stated CEO Greg Longstreet, “we concluded that a court-supervised sale process is the best path forward to expedite our recovery and build a more resilient Del Monte Foods.”

in its bankruptcy documents, Del Monte explained how it had ramped up production to cater to increased home dining during the pandemic. Though, as consumer demand decreased post-pandemic restrictions eased up, they found themselves stuck with surplus inventory that had to be sold at significant losses. the company’s financial woes have been compounded since its acquisition in 2014 when it took on considerable debt to finance the purchase. Additionally, as 2020 alone, their annual cash interest expenses have skyrocketed due to rising interest rates.