Del Monte merger on track a year after Heinz buy
A year after Del Monte Foods Co. acquired several H.J. Heinz businesses and its historic North Side plant, people around here still call it the Heinz plant. And until recently, trucks rolling out of the plant carried baby food still bearing the Heinz label.
Yet, according to Del Monte Chief Executive Richard Wolford, integration plans are ahead of schedule, with the combined company’s sales forces merged and a common information technology platform established.
“There were people concerned that a merger of this magnitude would blow up,” Wolford said in an interview Thursday. “One year later, our business performance is solid.”
Now, San Francisco-based Del Monte is preparing for one of its most aggressive steps yet — relaunching the baby food business under the Del Monte label — and attempting to reinvigorate the brand that had been malnourished at Heinz.
Mark Haberman, managing director for Del Monte brands said that after the Federal Trade Commission blocked Heinz’s bid in 2001 to acquire the Beechnut baby food business, the category became a low priority within the company.
“No new products were brought out; marketing spending was reduced. That all helped contribute to the erosion,” he said.
He said that while the research-and-development team never stopped cooking up new ideas, they had no support within Heinz to bring them to market.
That, he said, has changed under Del Monte.
The jars have new, easier to read labels, and new products have been introduced, such as ravioli with vegetables for toddlers and a line of tropical fruits like pink guava and mango.
Advertising is being placed in parenting magazines and the brand’s Internet site has been overhauled.
Nutritionist Ellie Krieger, a frequent contributor to the Today Show, has been hired as the brand’s spokeswoman.
“We’re interested in building share whatever way we can, whether it’s us versus Gerber,” he said, or in battling Beechnut to be the Gerber consumer alternative.
Haberman said to expect regular new product introductions, geared mostly toward the faster-growing toddler feeding segment.
“Toddlers are clearly a focus. It keeps consumers in the category longer,” he said.
Leonard Teitelbaum, a food industry analyst for Merrill Lynch Global Securities in New York, said the reinvigorated brand has garnered more shelf space at Wal-Mart and a pick-up at other retailers, like Kroger and Winn Dixie.
“The company will have to win the shelf space it has lost to competitors on an account by account basis, which will be a longer-term process,” he said.
Wolford said equipment has been added to the plant, which besides baby food makes private-label soups and College Inn broth.
Del Monte quickly made labor peace after its arrival in Pittsburgh. In March, the company and the United Food and Commercial Workers Union quietly ratified a three-year contract extension that the workers approved unanimously on the first vote.
“That agreement we felt was a good one marked by open and constructive discussion. We were all pleased with the results. We’ve had a great year of operation since,” he said.
Union President Bob Timmons said the employment level and workload at the plant has remained steady under Del Monte’s brief tenure.