IV.

INTERNAL ANALYSIS

COMPANY’S MISSION, VISION

Mission

To bring to life health and wellness.

Vision

To be one of the fastest growing global branded food and beverage companies.

Vision

Parameters Remark Explanation

Does it clearly answer the Yes Del Monte Philippines, Inc.

question: What do we want aims to become one of the

to become? fastest global branded food

and beverage companies.

Is it concise enough yet Yes Del Monte Philippine, Inc.’s

inspirational? vision is concise and

inspirational as it is clear that

it envisions itself to be “one

of the fastest growing global

branded food and beverage

companies.”

Is it aspirational? Yes While it is just one sentence,

it clearly states the main goal

of the company and helps set

the bar of what the

 management and other

employees should do to

achieve it.

Does it give clear indication No The vision doesn’t state the

as to when it should be specific date as to which it

attained? should be obtained; although

the company might have

meant for it to be one of the

fastest growing global

branded food and beverage

companies indefinitely.

Mission

Parameters Remark Explanation

Customers Not Stated Does not state anything about

the customers

Markets Not Stated Does not state anything about

the market

Technology Not Stated Does not state anything about

technology

Concern for survival, Not Stated Does not state anything

growth and profitability regarding the concern for

 survival, growth, and

profitability

Philosophy Yes The company thinks about

the condition of life and bring

it health and wellness

Self-concept Yes Del Monte Philippines, Inc.

brings to life the health and

wellbeing to its customers

Concern for public image Yes The company’s image is now

seen as a nutritious and

healthy brand

Concern for employees No Does not state anything about

the employees

Concern for nation Yes The company continuously

produces products which are

nutritious to make society

healthy

Revised Vision and Mission

Vision

To be one of the fastest growing global branded food and beverage companies by 2020.
Mission

To bring to life health and wellness which shall be readily available to everyone at all times

with the utilization of technological advancements whose operations shall be more

convenient and more efficient towards employees.

Core Values

Championing Together

Healthy Families

Ownership with Integrity

Innovation

Commitment to Society and Environment

Excellence in Everything We Do

(Del Monte Philippines, Inc.)

History

Del Monte Philippines, Inc. was formerly known as Philippine Packing Corporation before

it changed its name in 1988. The company was founded in 1926 and is based in Taguig,

Philippines. Del Monte Philippines, Inc. is a subsidiary of Del Monte Pacific Limited which was

incorporated as its parent in 1999.

In 1926, Del Monte US sets up operations in the Philippines by planting pineapple crowns

as initial seeds in an experimental plot in Diklum, Bukidnon. In the 1930s, with the purchase of

US-made tractors and trucks, mechanical farming started at the plantation. Additionally, young

women have started to work at the cannery with the help of Tagoloan Mayor Cosin.
 During the 1960s, Philpack’s cannery expands processing lines for tomato, papaya, and

tuna and a seaport. Filipinos have also started to rise top management positions in Mindanao

operations as Luis Lorenzo becomes the first Filipino Plantation Manager.

In the 1970s, Philpack ventures into banana-growing for export, in the Davao and Misamis

provinces. Quality checks are all conducted on all processed products.

In 2010, Del Monte Pacific Limited acquires the consumer food business of Del Monte

Corporation in the US. Such acquisition reunites Del Monte Philippines, Inc. with the founding

parent and brings the company’s products directly into the world’s largest consumer market.

At present, Del Monte Philippines, Inc. distributes and markets food and beverage products

under S&W and Contadina brands in the Philippines. It offers processed or packaged fruits, such

as canned pineapple and canned mixed fruits; tomato sauces, spaghetti sauces, meal mixes,

ketchups, and pastas, as well as pasta sauces, recipe sauces, and condiments; and beverages such

as canned, tetra packed, and bottled juices and concentrates, as well as fresh pineapples. Del Monte

Philippines, Inc. also exports its product to affiliated companies such as GTL Limited, S&W Fine

Foods International, Ltd. and Del Monte Foods, Inc.

DISTINCTIVE COMPETENCY

Del Monte Philippines, Inc. (DMPI) is a leading producer, distributor and marketer of

quality, healthy food and beverage products. For over 90 years it has be in operations in the

Philippines and is a market leader in the packaged pineapple and mixed fruit, canned and carton

ready-to-drink juices, tomato sauce and spaghetti sauce categories which has made it a household

name in the country.

 The company operates a 25,000-hectare fully-integrated pineapple operation in Bukidnon,

Philippines, and a factory that is about an hour’s drive away from the plantation. It additionally

operates a frozen fruit process facility in Bukidnon and a PET plant in Cabuyao, Laguna.

MANAGEMENT

Board of Directors Luis F. Alejandro, General Manager and

Rolando C. Gapud, Executive Chairman Chief Operating Officer

Joselito D. Campos, Jr., Executive Director Parag Sachdeva, Chief Financial Officer and

Edgardo M. Cruz, Jr., Executive Director Treasurer

Luis F. Alejandro, Executive Director Antonio E. S. Ungson, Chief Legal Counsel,

Jose T. Pardo, Independent Director Chief Compliance Officer and Company

Emil Q. Javier, Independent Director Secretary

Corazon S. De La Paz-Bernardo, Ruiz G. Salazar, Chief Human Resource

Independent Director Officer

Key Executive Officers Ma. Bella B. Javier, Chief Scientific Officer

Joselito D. Campos, Jr., President and Chief Employees

Executive Officer Approximately 3,500 full time employees

Organizational Culture

Planning

Del Monte Philippines, Inc. has an established enterprise-wide risk management program

that aims to provide a structured basis for proactively managing financial, operational, compliance,

information technology and sustainability risks in all levels of the organization.

With regard to operations, as an integrated producer of packaged and fresh fruit products

for the world market, DMPI’s earnings are inevitably subject to certain other risk factors, which

include general economic and business conditions, change in business strategy or development

plans, international business operations, production efficiencies, input costs and availability,

disruption of logistics and transportation facilities, litigious counterparties, insurgent activities and

changes in government regulations, including, without limitation, environmental regulations. The

company develops and executes a long-term strategic plan and annual operating plan, supported

by a business continuity plan, risk management and a corporate sustainability program. It also

pursues productivity-enhancing and efficiency-generating work practices and capital projects. To

manage security risks in its operating units in the Philippines, the Company has strengthened

security measures and improved its stakeholder relations in the communities where it operates.

The increasing global incidence of cyber-attacks on Company servers and websites

demonstrates the need to strengthen and improve security of the Company’s systems. Cyber-

attacks can disrupt operations such as exploiting weaknesses in network devices and servers,

corrupting information and stealing confidential data which can lead to financial losses. DMPI

develops and implements measures to counter and eliminate cyber-attacks from outside sources

by adopting industry best practice to strengthen network security such as updating security patches
to the system and encrypting workstations, by designing and implementing security control at each

local site, and by engaging a third party to audit its systems and mitigate such risks.

DMPI’s branded business in the Philippines through the Del Monte brand, and its branded

and non-branded businesses in the international markets, are affected by a number of factors,

including, but not limited to, competition, product innovation and product acceptance, industry

trends, distribution expansion, penetration and business partners’ risks. The company sought to

address such risk by strengthening the core business, expanding the product portfolio and markets;

shifting to branded value-added, packaged products with emphasis on innovation, health and

wellness, convenience, quality, competitiveness and consumer appeal of the categories; expanding

beverages and packaged fruits in alternative packaging formats; with regard to market and

customer diversification increasing penetration of high-growth channels, foodservice and e-

commerce; reinforcing consumption-driven marketing strategies such as consumer advertising;

and building on closer working relationships with trade partners.

Organizing

For safety reasons, toll manufacturers in the Philippines provide ongoing safety training to

all their employees, impose the use of personal protective equipment required in performing their

assigned duties and responsibilities and conduct periodic Work Environment Measurements for

noise, illumination, nuisance dust particles and fumes to ensure suitability of work environment.

The Corporate Sustainability team leads efforts to increase sustainability advocacy

amongst our stakeholders. Key leaders across the organization have been oriented on sustainable

business and sustainability reporting. Each team within the Company has set goals to ratify
commitments to our overall effort and recognize individual share of accountability as we strive to

meet varying market demands.

The company has identified its material sustainability issues by location which may differ

from the Group’s material issues given the business model employed by the business units. As an

example, Del Monte Philippines, Inc. does the cultivation, planting and harvesting of pineapples,

while the US subsidiary uses contract growers to source its fruits, tomatoes and vegetables.

Motivating

Del Monte Philippines, Inc. is committed in building its employees’ competencies to better

equip them for the future.

DMPI’s GR8 (Great) Del Monte Leadership Competency Model serves as a guide in

developing leaders, to enable them to coach and collaboratively lead teams towards achieving the

company’s operational and business goals. The company balances the leadership equation by

developing Del Monte Leaders who are not only competent but also serve as models who live out

the core values of the company. Each Competency Framework also serves as a foundation for

broad-range people programs on recruitment, learning, career development, succession planning

and performance management.

The company’s “Moving Up to Supervision Series” aims to provide young leaders with

basic leadership skills that will allow them to effectively perform their new role as people

managers. The weekly classroom sessions is a counterpart and supplement of formal technical
trainings, coaching/mentoring and intensive on-the-job experience provided via structured

Cannery Operations and Plantation Operations Supervisory Training Programs.

At Pineapple University or “PineU” plantation personnel hone their farming expertise

through formal sessions and benchmarking trips. The Manufacturing University or “ManU” for

short opened a breakthrough for cannery staff to reorient on processes and adapt to new

technologies. ManU also oversees two-year supervisory and trade-traineeship programs for

potential applicants and long-serving employees. Similar development programs are implemented

in Finance through its Finance University and Marketing’s Brand Leadership University (BLU).

A management succession plan is also in place, with deep bench of candidates trained among our

ranks to immediately assume responsibilities of Key Management Personnel in the event of

vacancy.

Staffing

The Company is committed to provide its employees a safe and healthy working

environment. It is also committed in upholding fundamental human rights and adhering to labor

standards.

The employees are paid above average rates in the industry, and are also informed of the

terms and conditions of employment prior to their appointment. They undergo annual medical

examinations or whenever such is required. Child and forced labor and any other form of

exploitation are strictly prohibited and not practiced. Discrimination on the grounds of nationality,

ethnic group, religion, age and gender is also not practiced.

The comprehensive package of salaries and fringe benefits for employees is offered and is

considered one of the most upgraded packages for agri-industrial workers in Southern Philippines.

Employees enjoy benefits which include:

a) Free retirement plan with a vesting provision granting benefits to employees with 10 or

more years of service upon resignation.

b) Voluntary supplementary provident plan with a vesting provision granting benefits to

employees with 10 or more years of service.

c) Medical and Dental plan – administered by a Health Maintenance Organization (HMO)

which includes free hospitalization at the company’s 95-bed hospital and accredited

hospitals and clinics; medicines; and medical and dental services.

d) Housing Benefits

1. Company Housing Units (for Plantation employees only); and

2. Monthly Housing Subsidy for those not enjoying company housing units.

e) Rice Allowance.

f) Free transportation to and from work.

g) Free school bus for employees’ children.

h) Annual vacation ranging from 16 to 25 days based on years of service.

i) Sick leave with pay for 16 to 18 days for the rank-and-file, and 19 to 20 days for supervisors

and executives.

j) Bereavement leave of 3 days with pay.

k) Paternity leave of 7 days with pay, up to four entitlements.

l) Death benefits: 12 months salary based on current rate or the employee’s Personal

Retirement Account (PRA) consisting of Company’s contributions and earnings,

whichever is higher, plus 1 week’s pay per year of regular service although not exceeding

6 weeks’ pay.

m) Scholarship programs.
 n) Educational, religious and recreational facilities.

o) 18-hole golf course open to all employees.

p) Maintains and subsidizes schools (Del Monte School, Our Lady of Lourdes Elementary

School and Holy Cross High School).

q) Voluntary Membership to Consumer and Credit Cooperatives for all employees.

The company’s agro-industrial workers enjoy one of the most attractive compensation and

benefit packages. To complement the government-mandated privileges for all employees and

qualified dependents, a broad range of free medical and dental services, a comprehensive

retirement package, and voluntary plans for providential and insurance benefits are offered.

In Mindanao, the Plantation employees live with their families in Group-owned houses and

dormitories (for unmarried employees) within housing camps complete with social hall, chapel,

playground and plaza, day care center, primary and secondary schools, camp clinics and a 100-

bed hospital managed by a medical service provider. Employee-organized cooperatives provide

our workers with services that enhance economic benefits for their families. Cooperative members

enjoy annual dividends and patronage refunds.

Children of the Cannery employees enjoy free year-round weekend tutorials on basketball and,

as scheduled, other sports (tennis, swimming, martial arts) and creative skills (photography, theatre

arts). Core Values are introduced through learning exposure that help them grow a strong sense of

community and family life.

Controlling

Del Monte Philippines, Inc. follows the best practices and international guidelines in

reporting sustainability performance. The company uses the Global Reporting Initiative (GRI)
Sustainability Reporting guidelines. The company has integrated the sustainability strategies and

embedded them in the organization. The Quality Policy, Code of Conduct, Code of Business Ethics

and Sustainability and Environmental Policies enable DMPI to comply with the standards set by

the GRI.

DMPI periodically performs a third-party risk assessment and evaluates controls and

procedures for the Company’s highest risk third parties. Criteria used for evaluating risk are:

a. the country where third parties are based and the associated Corruption Perception Index

of that country;

b. whether transactions are material or not;

c. and the nature of the business partner relationship.

DMPI has implemented the Whistleblower Policy that aims to deter and uncover any

unethical, illegal, corrupt, and fraudulent acts or conduct which may be detrimental to the interest

of the employees, management, and the company as a whole.

The Audit and Risk Committee (ARC) reviews the policy and arrangements by which staff

of the Corporation and any other persons may raise concerns about possible improprieties in

matters of financial reporting or other matters. The ARC's objective is to ensure that arrangements

are in place for concerns to be raised and to be independently investigated, and for appropriate

follow-up action to be taken. The existence of a whistle-blowing policy should be disclosed in the

Corporation's Annual Report, and procedures for raising such concerns should be publicly

disclosed as appropriate.

Human Resource
 Del Monte Philippines, Inc. is a people-driven organization committed to growing wellness

and a high quality of life through healthy working relationships. Given that the company’s most

valuable resource are its employees, it is committed to the fundamental human rights and

adherence to labor standards.

The company has a Code of Conduct for employees and suppliers that strengthens its

commitment to fundamental human rights and adherence to labor standards. The company is a

member of the Supplier Ethical Data Exchange that ensures compliance in the supply chain. It also

performs periodic audits of contract manufacturers and certain direct suppliers. Independent and

unannounced audits are routinely in effect to address quality assurance and compliance issues. The

Labor-Management Cooperation (LMC) councils meet regularly to deliberate and decide on issues

affecting the employees, their families, the Company and the communities where DMPI operates.

DMPI work committees identify potential safety risks and hazards, and devise action plans

to mitigate or avoid its occurrence. Safety programs are implemented and process improvements

are made to ensure workplace health and safety. The company regularly and consistently

implements safety training to employees and also enforce the use of protective equipment required

in performing assigned duties and responsibilities.

The Workplace Environment Monitoring program verifies the company’s compliance with

the standards of the Occupational Safety and Health Center of Department of Labor and

Employment which includes measurements of workplace’s air quality, noise level, temperature,

relative humidity, and heat stress.

Del Monte Philippines, Inc. nurtures their employees by curating continuous employee

engagement activities. The company engages employees in various activities that would promote

a healthy work-life integration. Employee engagement activities conducted by the Human

Resource Department include social gatherings, Team Building, Christmas Party, Fun Day and

Sports Fest, to name a few.

The Human Resources Department has created an online HR Information System called

MyHR to improve employee communication, utilizing technology for fast and accurate

employment transactions. Other employee engagement initiatives are the “Montee” stores where

employees can purchase the company’s products at a discount.

A survey developed by DMPI called “Our Voice, Our Choice” aimed to acquire

employee feedback which was beneficial in creating an environment that fosters employee

engagement which also allowed managers to be educated on an engagement is created and

sustained among their teams.

OPERATIONS AND PRODUCTION

The main office is located in BGC, Manila while the plantation and cannery are in southern

Philippines, specifically in Bukidnon and Cagayan De Oro which is about 1.5 hour flight from

Manila. In Laguna, about 1.5 hour drive from Manila, is where the beverage PET plant is located.

Del Monte Philippines, Inc. operates the world's largest integrated pineapple operation. It

produces its pineapple in its 25,000-hectare plantation in an area ideal for growing and outside the

typhoon belt. The company’s processing facility has an annual capacity to process nearly 700,000

tonnes of pineapples and adjacent to the plantation is the frozen fruit processing facility which

started commercial operations in May 2017.

Del Monte Philippines, Inc.’s fully integrated operations guarantee an efficient supply

chain from production to market and the delivery of products. Operations by the company continue

to implement cost-reduction and productivity-enhancement programs, and invests in new

technology and equipment to maintain its leadership position in the industry. The company’s

operations have consistently maintained a high standard of quality control and product assurance

as they meet food standards set by our customers worldwide and by a number of international

agencies.

Global Positioning System (GPS) technology is also now being used to monitor the

plantation and truck deliveries to ensure efficiency, productivity and safety at work.

In selecting suppliers, DMPI uses its Supplier Quality Management Program (SQMP)

which assesses the quality and delivery performance, feedback, recognition and continuous

improvement program for all direct materials suppliers and toll manufacturers. The Company

performs periodic audits of contract manufacturers and direct suppliers. Additionally, independent

and unannounced audits are in effect to address the quality assurance and compliance issues.

MARKETING

Distribution

Del Monte Philippines, Inc. no longer focus solely on retail centre-of-store, but also on

retail perimeter, convenience stores and foodservice such as 7-Eleven, Ministop, Jollibee,

Greenwich, McDonald’s, and Shakey’s.

One-third of the company’s sales are through exports. DMPI sells products to its affiliated

companies such as S&W Fine Food International, Ltd. and Del Monte Foods Inc.
Product Innovation

Innovation is at the heart of being able to nourish families with delicious food and

beverages. Significant steps have been made in introducing new, healthy, more convenient and

environment-friendly products to consumers. Consumers are becoming increasingly interested in

learning about the ingredients in their food and are often looking for positive health properties of

low-fat or low-sugar. This emphasis on health impacts and benefits has ongoing implications for

product design and sourcing. Del Monte Fit ‘n Right has widened its product range by introducing

the Del Monte Fit ‘n Right Active Isotonic Drink with L-Carnitine that replenishes body fluids

during exercise or intense workout which also helps reduce body fat. Del Monte Juice and Chews

was also introduced. The beverage is a snack-in-a-drink combining nata and pineapple with fruit

juice blends, a drink popular amongst teens.

 Last June, DMPI’s Nice Fruit joint venture in frozen pineapple successfully launched

frozen pineapple spears in Japan which are produced in Bukidnon. Known as the Pineapple Stick,

it is Individually packaged and is available in about 70% of 7-Eleven outlets or at an estimate of

14,000 stores in Japan. With the Nice Fruit revolutionary technology, frozen pineapple, when

thawed, has the same physical properties as fresh cut pineapple.

For the culinary portfolio, the Contadina line was launched consisting of olive oil, pasta, sauces

and packaged tomatoes.

E-commerce and Promotion

 The company also furthered to execute a strategy where it partners with e-commerce

providers in order to sell more products online. Consumers have been changing the way they shop.

Accordingly, DMPI will increase the share of digital marketing. Millennials are spending more

time online versus traditional media.

Since then, Del Monte Philippines, Inc. has been utilizing electronic and print for

promotion and marketing. Its advertisements are aired on radio, television and published in

newspapers, magazines and displayed on billboards along highways. Del Monte Philippines, Inc.

is also promoting with the help of Social media such as Facebook and Twitter with their Del Monte

Kitchenomics. DMPI also has a cooking show which is aired on GMA every Sunday from 11:55am

to 12:00nn.

Product Packaging

Del Monte Philippines, Inc. has a convenient packaging for ketchups in Stand-up Pouches

(SUP) with enclosable spout. To make products more accessible for consumers, the company

developed and introduced a low-cash outlay pack in SUP for our tomato and pineapple tidbits

products. Packaging of juices are also innovated; it now comes in resealable one litre-cartons.

Additionally, all packaging materials in the cannery and the company’s toll packers are 100%

BPA-Non Intent
RESEARCH AND DEVELOPMENT

Del Monte Philippines, Inc. conducts research in all regions where it is active to discover

new products or develop more efficient ways of producing existing products. The research and

development department is responsible for improving fruit varieties, conducting taste-panels and

monitoring the use of agrochemicals in the growing process.

One of the projects developed to maintain the company’s world class plantation

management system was the Drone Programme which allows to monitor the condition of the

25,000-hectare pineapple field in Bukidnon, Philippines. The drone captures pictures which

includes topography and color which help determine the health of the plants.

DMPI’s Environmental Policy is updated periodically to reflect new advances in best

practice and to better serve the Group’s operating needs. This policy is posted in facilities,

communicated to facility management and also incorporated in the training for environmental and

operations staff. Over 90 years of operations, the land use practices are mainly aimed at improving
plantation yield through ecologically friendly land preparation, plant disease management and

chemical application, efficient water sourcing and drainage and use of sustainable planting

materials.

DMPI researchers investigate crop density as a way to increase yield per hectare while

cutting pesticide and fertilizer use. They continue to explore the possibility of rolling out high-

density techniques to other crops. The agricultural teams work closely with local farmers to adopt

agronomic measures that can mitigate adverse consequences of crop agriculture on soil and water

conservation. Responsible farming focuses on sustainable crop cultivation and efficient drainage

systems, with innovative as well as tried-and-tested practices, including minimizing build-up of

surface water during heavy rain and to slow down water flow, positioning grass strips at strategic

points. DMPI researchers look for ways to optimize water use in all of our toll manufacturing

operations, reduce water usage and increase water reuse and recycling.

MANAGEMENT INFORMATION SYSTEM

With the increasing global incidence of cyber-attacks on companies’ servers and websites,

we have committed to strengthen and improve the security of the company’s systems. The

company has implemented an Enterprise Resource Planning system, Systems, Applications and

Products (SAP), in the US and outsourced its finance and accounting functions to a reputable

global service provider in the Philippines. Given the new systems and processes involved, there

are risks to timely and accurate processing of documents, monitoring of expenditures, along with

the change of service provider and decision-making which is associated with the flow of quality

information.
 The plantation in North and South Bukidnon is Global Good Agricultural Practices

(GLOBALG.A.P.) certified, further affirming a management system focused on Food Safety,

Worker’s Health and Safety, Environmental Protection and Conservation of Wildlife.

GLOBALG.A.P. is a globally recognized private sector body that sets voluntary standards for

agricultural products. The plantation and pack house for fresh fruits have been certified ISO

9001:2015 for growing, harvesting and packing of fresh fruits by SGS United Kingdom Ltd

Systems and Services Certification body. The participation in the GLOBALG.A.P. certification

process was voluntary and was a strategic response to customers’ demand for food safety

worldwide. To attest the company’s farms grow, pack and distributed fresh produce to conform

with international standards on food safety and quality, a Philippine Good Agricultural Practices

(PhilG.A.P.) certificate is issued by the Philippine Department of Agriculture.

At the PET Plant located in Cabuyao, Laguna, the plan to improve the GMP quality

scorecard by closing out gaps via a monthly technical meeting with the building lessor for

structural deficiencies, updating corrections and checking building condition, and conducting

personnel refresher courses.

FINANCIAL

Financial ratios

Ratios 2018 2017

Liquidity

Current Ratio
1.2 1.6
Quick Ratio
0.4 0.3
Leverage

Debt to Equity Ratio

1.02 3.8
Debt to Total Asset Ratio
0.5 0.8
Long Term Debt to Equity
0.8 0.8
Ratio

Efficiency

Inventory Turnover
0.3 0.3
Fixed Asset Turnover
0.7 0.6
Total Asset Turnover
0.72 0.90
Profitability

Operating Profit Margin

0.12 0.12
Gross Profit Margin
0.24 0.25
Net Income Margin
0.01 0.01
Return on Total Assets
0.07 0.08
Return on Total Equity
0.14 0.17
INTERNAL FACTOR EVALUATION

Weighted
Key Internal Factors Weight Rating
Score
Strengths
Large Scalable Global Business 0.15 4 0.60

Strong Shareholder and Management Support 0.05 4 0.20

Extensive Product Distribution 0.15 4 0.60

DMPI sales reached P27.6bn, up 3% from prior year 0.10 4 0.40

Foodservice grew by 15% to P3bn 0.05 4 0.20

Weaknesses
Limited Product Mix 0.10 2 0.20

Price is higher than most brands in the Philippines 0.10 2 0.20

Marketing costs of organic foods are higher 0.05 2 0.10

Has not been able to completely penetrate the emerging economies

0.15 2 0.30
as compared to other leaders

Relatively low product advertising 0.10 2 0.20

Total 1.00 3.00

Analysis:
The score 3.00 shows that Del Monte Philippines, Inc. has a strong internal position since the
strengths overcome the weaknesses of the company.
Large Scalable Global Business

This factor is given a weight of 0.15 and a score of 4 because being a reputable and globally

recognized brand would influence consumers to purchase the company’s products having in mind

that the products are worth the price and top quality. Such reputation would also result to a strong

customer base.

Del Monte Philippines is the market leader in the canned and pineapple and mixed fruit,

canned and ready-to-drink juices, tomato sauce and other spaghetti sauces. It is one of the largest

food and beverage companies in the Philippines, wherein it has one of the fastest growing

economies with consumption driving over 70% of its economy.

Strong Shareholder and Management

This factor is given a weight of 0.05 and a score of 4 because have a strong shareholder

support would influence investors to invest on the company. Furthermore, having a strong core

management team with wide-ranging experience is an advantage given that plans of action and

operations will be efficiently and effectively handled.

Del Monte Philippines, Inc. has a strong shareholder support given that its parent company

is Del Monte Pacific Ltd. (DMPL) which is listed in Singapore and Philippines. DMPL is in turn

majority-owned by NutriAsia Pacific Limited (NPL) and Bluebell Group Holdings Ltd., which are

beneficially-owned by the Campos family. NPL has been the majority shareholder of DMPL since

2006. NPL and Bluebell combined have 71% ownership in DMPL

Extensive Domestic Distribution

This factor is given a weight of 0.15and a score of 4 because the company has better

opportunities to realize more profit since their products are available and accessible to consumers.

As a household name, Del Monte Philippines is commonly found in grocery stores,

convenience stores, sari-sari stores and even fastfood chains. Some of its distributors are 7-11, SM,

Puregold, Robinson’s Malls, Jollibee, and McDonald’s. Additionally, one-third of the company’s

sales are through exports. DMPI sells products to its affiliated companies such as S&W Fine Food

International, Ltd. and Del Monte Foods Inc.

DMPI sales reached P27.6bn, up 3% from prior year

This factor is given a weight of 0.10 and a score of 4 since the company’s sales have

increased, it indicates that their products are popular and frequently purchased and it also indicates

that their management and operations are effective.

In the past three years since DMPI generated sales of P22 billion in FY2015, sales have

grown by P5.6 billion to P27.6 billion at a compounded annual growth rate of 7.9%, higher than

GDP growth. The Company expanded sales in the Philippines across all categories led by culinary,

followed by beverages and packaged fruits, as well as all channels led by foodservice, followed

by modern trade and general trade.

Food Services grew by 15% to P3bn

This factor is given a weight of 0.05 and a score of 4 because it indicates that the company’s

food services among consumers which will garner more sales and realize profit.

Philippines sales in Fiscal year 2018 were higher by 5% at P17.2 billion as foodservice

sales grew by a robust 15% to P3 billion, riding on the rapid expansion of quick service restaurants
and convenience stores as well as the company’s growth of its juice dispensers, meal partnerships

and customized products.

Limited Product Mix

This factor is given a weight of 0.10 and a score of 2 because consumers can easily find

alternatives to the company’s products and the company would also lose the opportunity of optimal

sales for not venturing on other products.

Del Monte Philippines Inc.’s products are concentrated on the healthy aspect which is why

they use fresh fruits and other produce for their products. Because of this, they have limited

products. DMPI has no snack products nor dairy products since they focus on healthy fruit drinks,

pasta sauces, and condiments.

Price is higher than most brands in the Philippines

This factor is given a weight of 0.10 and a score of 2 because finding cheaper or more

affordable alternatives could greatly affect DMPI’s sales. It could be seen in grocery stores that

there are cheaper alternatives such as products from Clara Ole, and RFM Corporation; Del Monte

Philippines, on the other hand, has twice the price.

Marketing costs of organic foods are higher

This factor is given a weight of 0.05 and a score of 2 because it would be costly on the part

of the company to spend on operations to ensure quality and safety of the products. Also in line

with environmental regulations and corporate governance, creating an environment-friendly and

packaging while ensure the freshness of the products is also costly.

 Del Monte Philippines, Inc. is 100% BPA-Non Intent for all packaging materials in the

cannery and its toll packers. From a recent study, it was established that consumption of a small

can of Del Monte Pineapple Tidbits a day increased the production of granulocytes, which make

up 60% of the body’s white blood cells, known as the body’s first line of defense against infection.

In order to make the product more accessible everyday for consumers, a low-cash outlay pack

format was developed. Del Monte Pineapple Tidbits was introduced in a stand-up pouch (SUP)

format, the first in the market to offer an affordable format that encourages increased consumption,

not only for enjoyment but also for better immunity.

Has not been able to completely penetrate the emerging economies as compared to other leaders

This factor is given a weight of 0.15 and a score of 2 because Del Monte Philippines, Inc.

could have the opportunity of having better sales and realize more profit if it offered and catered

its products and food services to other emerging economies.

DMPI also exports to America, Asia and Europe to Del Monte companies and strategic

private labels such as GTL Limited, S&W Fine Foods International, Ltd. and Del Monte Foods,

Inc. The company is yet to export its products to Central America, South America, and the African

Continent.

Relatively low product advertising

This factor is given a weight of 0.10 and a score of 2 because lack of product advertisements

compared to other competitor companies may put DMPI at a disadvantage since consumers would

be less knowledgeable when it comes to the products the company offers.

 However, the relatively low product advertising of the company may be offset by its

reputation. Del Monte Philippines Inc. does not have a problem with regard to its popularity given

that it is a household name; Filipinos know that the company produces top quality products. What

sets DMPI’s products apart from other companies is that its products are very healthy since they

are known to use fresh fruits to create their beverages

INTERNAL ANALYSIS OF DEL MONTE
PHILIPPINES, INC.

Christine Rose D. Labao

4ALM
14 March 2019