Del Monte Pacific Limited · SGX:D03
Del Monte Pacific — Investor Presentation (June 2018)
37 slides from Del Monte Pacific's investor presentation, Jun 29, 2018
Slide 1: Growing the New Del Monte (USA)
Growing the New Del Monte (USA) 06.29.18 1
Slide 2: Strategic Overview - DMFI
Strategic Overview - DMFI Greg Longstreet, CEO
Slide 3: Del Monte Foods 130-year Heritage of Innovation
Del Monte Foods 130-year Heritage of Innovation 1880 1900 1920 1940 1960 1980 2000 2018 1890 1910 1930 1950 1970 1990 2010 1886 1971 Leaders in Nutritional Labeling 2018 Del Monte Premiers One of the Most First used on a premium Del Monte becomes the first major US food producer to voluntarily adopt
Slide 4: Del Monte's Solid Foundation with US Consumers
Del Monte’s Solid Foundation with US Consumers Leverageable Equity A Powerhouse High Brand Recognition, Broad Appeal, And Better-for-You Well trusted with strong health & wellness credentials Describes Del Monte Prefer Del Monte High Brand • National footprint 92% 92% 89% Recognition 61% • +98% Bran
Slide 5: Leading U.S. Market Positions
Leading U.S. Market Positions • Growing share positions across our core businesses Canned Canned Plastic Canned Vegetables Fruits Fruit Cups Tomatoes Broth Del Monte Brand Ranking #1 #1 #2 #2 #2 Category Size (US$ bn) 1.65 .64 .68 1.4 1.2 All Outlet 29.1 26.9 32.3 8.7 14.1 13 Week US$ Share All Outl
Slide 6: 4 Joint Ventures established with Fresh Del Monte
4 Joint Ventures established with Fresh Del Monte Chilled Chilled Beverages Chilled Fruit Snacks Food & Beverage Avocado/Guacamole Outlets Avocado & Guacamole Juice, fruit or vegetable- Whole or Cut Fruit Del Monte branded QSR products based beverage products products with extended concept in the US
Slide 7: Lessons Learned
Lessons Learned • Sager Creek Mistake • Supply Chain Imbalance • Total Company Focus on Center Store • Fill Canned Capacity “At All Costs” Mentality • Exorbitant Trade Spending and Reliance on Price • High Fixed Expenses and duplication of tasks • Strong capabilities within our commercial teams and
Slide 8: Strategic pillars/tactics
Our Strategic Focus Priorities Objective Gross Margin & Profit Growth IV Branded Growth & Development Product Innovation & Portfolio Expansion Reduced Costs to Operate Strategic pillars/tactics I II III IV V Strengthen Expand into Expand Improve Strive for the Core: Adjacencies: Internationally: Ope
Slide 9: Building a Culture of Innovation
Building a Culture of Innovation Del Monte in Recent Years Del Monte of the Future Portfolio extended into high growth and high Focused on declining center of the store margin categories sold across diverse categories and mature retail channels channels Revitalized and strengthened brands Limited in
Slide 10: FY2019: Product News & Innovation
FY2019: Product News & Innovation Product Improvements Line Extensions New Platforms Fruit Refreshers Plastic Fruit Cup Product Improvement (100% Juice, Natural NSA) Fruit & Oats Platform Canned Broth Product Improvement (100% Natural) Produce (Reintroduction) Updated Grab & Go Line S&W Product Impr
Slide 11: Entering New Categories and Channels
Entering New Categories and Channels Innovate & Expand into New Aisles Extend Reach into Growing Channels Perimeter Building new capabilities and selling relationships across… Convenience & Club New Joint Ventures creating opportunity to accelerate innovation and expand distribution… Frozen E-commer
Slide 12: Foodservice Innovation
Foodservice Innovation New Del Monte Frozen Riced Veggies • Easy and Tasty Alternative to High Carb Sides • Pre-cut, Recipe Ready • 100% Usable with No Waste • High Quality andConsistency • Loaded with Vitamins and Minerals 12
Slide 13: Foodservice Innovation
Foodservice Innovation New Del Monte Fruit Burst® Squeezers! ALL VARIETIES: ✓ 1/2 Cup Equivalent Fruit ✓ Buy AmericanCompliant ✓ Shelf Stable ✓ Smart Snacks Compliant ✓ Excellent Source of Vitamin C ✓ Labelled for Individual Sale 13
Slide 14: Innovation Growth
Innovation Growth Innovation will transform our portfolio and go to market strategies Innovation Long-term Category Breakout % of Retail % of 30% NSV* NSV** Frozen +7pts 25% 23% 7% Refrigerated 20% 19% +6pts 12% 15% 12% 10% 5% 4% 81% 1% 0% Ambient -13pts FY18 FY19 FY20 FY21 FY22 ** Retail only. Vs F
Slide 15: Gross Margin Improvement
Gross Margin Improvement GM% Have we FY2018 16.2% taken Action? Retail pricing (trade reduction) 2.1% Network Optimization 1.3% Net impact of Sager Creek 0.9% Reduced Private Label Retail 0.6% USDA pricing 0.3% Innovation -0.7% Inflation -0.5% Retailer -0.4% Other -0.1% FY2019 19.8% Delta 3.6% 15
Slide 16: Marketing Plans
Marketing Plans Bibie Wu, CMO
Slide 17: US Market - Macro Trends
US Market - Macro Trends Tailwinds Headwinds • Culinary trends elevating role of • Shift in food values to avoid processed fruits/vegetables foods and desire for “closer to fresh” solutions • Wellness trends increasing importance of plant-based nutrition • Dynamic lifestyles diminishing and simplify
Slide 18: Marketplace Results: Vegetable
Marketplace Results: Vegetable Winning at Shelf • Displaced branded competitor at several major retailers • Simplify shelf and improve productivity Marketplace Success • Growing US$ share • Growing retail US$ sales in declining category • Increased consumer loyalty +2.4pt Growing the Category • Reta
Slide 19: Marketplace Results: Fruit & Chia
Marketplace Results: Fruit & Chia Launched Summer 2017 Marketplace Success • Distribution above target o 64% Grocery o 91% Walmart • Velocities above target Attracting New Users • Trial of >6m households to date • 138 Index for Younger, Millennial shoppers Growing the Category • 44% incremental to c
Slide 20: Marketplace Results: Aseptic Broth
Marketplace Results: Aseptic Broth Igniting Premium Aseptic Growth • College Inn Premium NSV projected to grow significantly over 2 years • College Inn Premium Aseptic +16% price per ounce vs Canned Broth Establishing National Footprint • National Walmart distribution • +24% Distribution in East Coa
Slide 21: Strategic Objectives Build Relevance
Strategic Objectives Build Drive Relevance Innovation Differentiate our brands and drive Address changing consumer needs consumer preference and desires Elevate products & packaging Reach new consumer targets Communicate points of difference Extend into new usage occasions Optimize retail
Slide 22: Modernize & Ignite Passion for our Brands and Products
Modernize & Ignite Passion for our Brands and Products Taste Delicious, accessible, on-trend meals and snacks Health Plant-based nutrition Convenience 22 New formats and temperature states
Slide 23: Vegetable Strategy
Vegetable Strategy Current Context 52-wk Category: -2.9% vs YA Share: Del Monte 28.9%, +1.4pt Green Giant 8.7%, -0.9pt Private Label 43.3%, -0.1pt Vision: THE UNASSAILABLE LEADER OF VEGETABLES Strategic Initiatives & FY2019 Plans • Fortify Del Monte’s leadership position o Ensure accounts that ratio
Slide 24: Fruit Strategy
Fruit Strategy Plastic Fruit Cup Canned Fruit 52-wk Category: +4.1% vs YA 52-wk Category: -5.5% vs YA Share: Del Monte 33.1%, +3.1pt Share: Del Monte 26.4%, +1.5pt Dole 41.5%, -1.9pt Dole 26.8%, -0.5pt Private Label 25.2%, -1.2pt Private Label 40.4%, -0.4pt Vision: THE INNOVATION LEADER IN FRUIT SNA
Slide 25: Fruit Innovation
Fruit Innovation Be an innovative Healthy Snacking brand by making Fruit exciting and accessible Fruit & Oats The Opportunity: • Large Oatmeal category US$1.2bn • Limited on-the-go options • New occasion for Plastic Fruit Cup Our Point of Difference: • Luscious chunks of fruit • Ready to eat warm or
Slide 26: Fruit & Oats Advertising
Fruit & Oats Advertising Key Insights/Barriers: • Rise of mid-morning snacks & mini- breakfasts FPO • Fruit is #1 thing to add to oatmeal • Consumers looking for more lasting satiety Communication Objective: • The first ready-to-eat oatmeal with luscious fruit and wholesome oats Marketing Support: •
Slide 27: Tomato Strategy
Tomato Strategy Current Context L52W Category: -1.2% vs YA Share: DMFI 8.9%, -0.7pt Contadina 4.2%, -0.1pt Conagra 37.2%, +0.8pt Private Label 32.2%, -0.5pt Vision: CONTADINA, A LEADER IN CONTEMPORARY ITALIAN MEAL SOLUTIONS Strategic Initiatives & FY2019 Plans • Expand Contadina as a leader in conte
Slide 28: Contadina Advertising
Contadina Advertising Key Insights/Barriers: • Contadina is not a top-of-mind Tomato brand • She doesn’t have a reason to believe Contadina is worth paying more for Communication Objective: • Contadina 100% fresh tomatoes is the gold standard for Italian cooking Marketing Support: • Print • Digital
Slide 29: College Inn Broth Strategy
College Inn Broth Strategy Current Context FY2018 Category: 5.8% vs YA Share: College Inn 15.8%, -0.1pt Swanson 30.2%, -2.9pt Pacific 5.7%, +0.6pt Private Label 26.7%, 2.9pt Vision: THE DIFFERENTIATED #2 BRAND NATIONALLY Strategic Initiatives & FY2019 Plans • Drive Core Market Leadership o Launch pr
Slide 30: College Inn Innovation
College Inn Innovation Fuel expansion with innovation that adds rich and flavorful taste Bone Broths: • Segment Size: US$43.5m • Segment Growth: +125% vs YA The Opportunity: • Bone Broth segment is small, but growing exponentially • Protein is on-trend across multiple categories • Competition strugg
Slide 31: Bone Broth Advertising
Bone Broth Advertising Key Insights/Barriers: • Aware of Bone Broths, but it’s not well understood • Consumers looking for more protein Communication Objective: • New College Inn Bone Broth has the same great depth of flavor, now with 10 grams of protein Marketing Support: • Print • Influencer • Dig
Slide 32: Summary
Summary Our Imperatives • Build Relevance – Drive Our Advantage • Drive Innovation – Think Outside of the Can Back to our roots • Market like a brand leader • Packaging and product innovator • Leader in plant-based goodness Right to win • Trusted, extendable equities • Quality fruits and veget
Slide 33: Finance
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Slide 34: FY2019 Progress
FY2019 Progress Expecting growth vs. last year • 1Q is typically the lowest volume quarter Actions show encouraging results • Gross Margins ~150 bps • EBITDA ~25% Solid Sales Execution • Improved product mix • Effective trade spend management Good SG&A management • Established new capabiliti
Slide 35: Supply Chain: Key Metrics
Supply Chain: Key Metrics* FY18 LTE • FG Inventory Management Inventory ($ M) $634 • Demand & Supply Balance Process $400 Utilization%(Veg) Key Metrics 62% • Site consolidations across network 85% OEE% 72% • Traksys roll-out 85% • Del Monte Performance System • (2) Sites GM (%) 16.5% • (4) DC’s & (2
Slide 36: CAPEX
CAPEX A rationalized Manufacturing and DC footprint reduces annual Capex to less than $25M vs. $40M Reduction supports : • Maintenance for best in class facilities • All regulatory requirements • Projects with a good payback Strategy is to leverage strategic co-packers 36
Slide 37: Working Capital Management
Working Capital Management Action Plan Align production plan with demand Benefits forecast Improve controls to minimize over Significant reduction in finished pack goods inventory Review quantity on hand formula Lowers aged inventory write-offs Compliance and monitoring Reduces over-fl
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