Iconic 138-Year-Old Grocery Brand Files for Bankruptcy

Del Monte Foods, the 138-year-old firm best known for its canned fruits and vegetables, has filed for bankruptcy and is seeking a buyer.

Late Tuesday, the company stated that it was voluntarily entering Chapter 11 and is selling all of its assets.  The company's product lines include some well-known culinary classics, such as College Inn broths and Contadina canned tomatoes, as well as its iconic Del Monte brand.

"After a thorough evaluation of all available options, we determined a court-supervised sale process is the most effective way to accelerate our turnaround and create a stronger and more enduring Del Monte Foods," said President and CEO Greg Longstreet in a statement. 

Del Monte said it had acquired $912.5 million in new capital, which will keep the company afloat during the selling process and allow it to continue working normally as the peak canning season approaches.  According to court records, the business cited liabilities ranging from $1 billion to $10 billion.

"With an improved capital structure, enhanced financial position and new ownership, we will be better positioned for long-term success," according to Longstreet.

He stated that the corporation has "faced challenges intensified by a dynamic macroeconomic environment," including consumer spending cuts and a rising trend toward spending on private labels. 

Del Monte "says that consumer demand has declined, causing it to incur increased costs related to surplus inventory that it has had to warehouse and attempt to move off shelves with increased promotional spending," according to Sarah Foss, global head of legal and restructuring at Debtwire.  "Consumer preferences have shifted away from preservative-laden canned food in favour of healthier alternatives."

Del Monte began operations in 1886 and established its well-known cannery in San Francisco in 1907.  The firm claims to have managed the world's largest fruit and vegetable cannery by 1909.