University of Santo Tomas

College of Commerce and Business Administration

1st Semester, A.Y. 2015 2016
A Term Paper on Del Monte Philippines, Inc.

Submitted to:
Mr. Tony Topacio
Submitted by:
Bonite, Adrian John
Co, Nellwyn Ruth
Ongo, Leslie Anne
Placido, Raven John
Valmeo, Geneva Marie

Third Year Marketing Class 9

November 29, 2015

I.

Company Profile
A. Brief History
Del Monte Philippines, Inc.
The Del Monte brand started when a premium blend of coffee was designed by a food distributor

for the Hotel Del Monte on the US Monterey peninsula during 1880's. By 1892 the Del Monte brand was
introduced by this same company as a line of canned peaches.
In 1899, the Del Monte brand was marketed by California Fruit Canners Association - CFCA. This
company grew to operate 60 canneries throughout the United States. In 1917, CFCA acquired pineapple
lands and a cannery in Hawaii as well as the Philippines.
Del Monte Corporation was sold to tobacco giant R J Reynolds in 1980 which was in turn
acquired by Nabisco in 1983. In 1990 as a result of a massive leveraged buyout the overseas Del Monte
companies were split up.
Del Monte Philippines, Inc. is now a subsidiary of Del Monte Pacific Limited. which is already
unrelated to Del Monte Asia owned by the Kikkoman Corporation of Japan. Del Monte Pacific Limited has
the rights to the Del Monte trademark for the Philippines, the Indian subcontinent territories and Myanmar.
In 1996, Del Monte Foundation Inc., with the tradition to "help people who help themselves," was
established in order to provide educational training centers in Bukidnon and Cagayan de Oro as well as
satellite centers in South Bukidnon and Misamis Oriental. This has become their social responsibility in
the provinces wherein they conduct their most important operation the pineapple plantation.
Today, Del Monte Philippines is already the largest operator of pineapple operation in the world,
and is now the leading producer of pineapple and other food products in the market. The company, which
owns 20,000 hectares of pineapple land in Bukidnon and Misamis Oriental, is now providing jobs to 4,000
people of the Mindanao province.
B. Vision / Mission Statement
OUR VISION1
To be one of the fastest growing global branded food and beverage companies.
OUR MISSION
To bring to life health and wellness

We live up to our heritage of growing premium quality food and beverage brands which

are the top choice of all generations for enjoyable and healthy living.
We leverage deep market knowledge coupled with technology and innovation to create
and deliver relevant health and wellness breakthroughs to our broad base of customers.

1 http://www.delmontepacific.com/Website/Content.aspx?i=11

We continuously build on our knowledge and experience in agriculture, while enhancing

the sustainability of the lands we cultivate.

We adhere to the highest standards of corporate behavior in our relationships with our

employees, business partners, and the communities around us.

We are a benchmark in corporate social responsibility and the preservation of the

environment.
We build a highly energized, high-performance organization with a strong commitment to

teamwork and to embracing better ways of doing things.

We value our people and commit to provide opportunities for learning, professional
growth and a better quality of life.

II.

Threats and Opportunities

A. Macroenvironment Analysis
Economic Macro-Environment Factors
Factor

Implication

Consumer Confidence in the

Philippines increased to -11.60 in
the third quarter of 2015 from
-16.20 in second quarter of 20152

A possible increase in demand

due to its positive relationship with
the purchasing power of the
consumers
A possible increase in sales, and
higher inventory turnover due to
increasing demand of consumers;
Macroeconomic factors are
affecting spending activity
positively
Lesser possibility for companies
to a lot additional costs for product
developments; no decrease in the
Corporate Tax Rate means that
there will be no beneficial effect to
a business

Consumer Spending in Philippines

increased to 1301703 PHP Million
in the second quarter of 2015 from
1284551 PHP Million in the first
quarter of 20153
The Corporate Tax Rate in
Philippines stands at 30% (19972015)4

Effect on Product
Increase in sales revenue of Del
Monte Philippines, Inc.

Increase in sales revenue of Del

Monte Philippines, Inc.
Deductions from net income of
Del Monte Philippines, Inc.;
somehow hinders possible
development for company
products such as 100% Del
Monte Pineapple Juice

Consumer Confidence
The consumer confidence in the Philippines, as stated above, increased to -11.60 in the third quarter of
2015. This is probably due to the impressing statistics about global and national economy the government

2 http://www.tradingeconomics.com/philippines/consumer-confidence
3 http://www.tradingeconomics.com/philippines/consumer-confidence
4http://www.tradingeconomics.com/philippines/corporate-tax-rate

consistently reports to the public which increases their confidence, and discourages savings. Although the
quantitative measure remains negative, it is still a positive indication for the economy because consumers
feel confident about the stability of their incomes which results to more spending activity, and therefore
helps to develop the overall shape of the country.
Consumer Spending
The consumer spending has increased by 17,152 PHP in the second quarter of 2015.
Consumption is financed primarily out of income received; therefore, a possible increase in income
satisfaction can be stated. This scenario is a positive indication in the Philippine economy for the more the
consumer purchase goods and services, the faster the money cycles in the country. There would be less
idle money which hinders the growth of economy in the system.
Corporate Tax Rate
In the Philippines, Corporate Income Tax Rate is the tax collected from companies. Since the
Corporate Tax Rate stands at 30% from 1997 until 2015, no huge impact will be expected for the mean
time. However, a high Corporate Tax Rate benefits the government more than the business corporation,
because corporate tax gives corporations less disposable income. A higher corporate tax equates to
higher costs for businesses.

Political-Legal Macro-EnvironmentFactors
Factor
The upcoming 2016 election

Impact of the Food and Drug

Administration

Food Safety Act of 2013

Implication
There would be a new set of
legislative body of the government
which may cause changes in the
Philippine legal laws

There would be and obliged

observance upon the different
rules and requirements
implemented by the agency

Promotion and protection of the

right to health of the people;
honesty of companies about their
products

Effect on Product
Del Monte Philippines, Inc. might
be affected by the possible new
legal laws, and might take time to
adjust from these changes
Legality of Del Monte 100%
Pineapple Juice ACE;
improvement to the overall
manufacturing process and final
products of Del Monte
Philippines, Inc.; all Del Monte
Philippines, Inc. products will be
monitored by a higher authority
Compliance of Del Monte 100%
Pineapple Juice ACE with the
food regulatory system (e.g.,
safety of the food product,
honesty of the product in terms
of facts and information)

5http://www.gov.ph/2015/02/20/implementing-rules-and-regulations-of-republic-actno-10611/

2016 Election
The upcoming 2016 election is approaching. Soon enough, the country will be having new executive and
judicial people in the government. Having a new president and new set of senators increases the
possibility of implementation of new laws, and occurrence of new style of governance. Those who will be
blessed to win a position in the legislative branch will surely have proposed laws to be presented to the
Congress. If additional laws will be implemented, different sectors, including the business ones, might
take time to adapt to the possible changes and respond to the changes in the legal framework.
Food and Drug Administration
The Food and Drug Administration was created under the Department of Health to license,
monitor, and regulate the flow of food, drugs, cosmetics, medical devices, and household hazardous
waste in the Philippines. The FDA's main goal is to ensure the health and safety of food and drugs made
available to the public. Because of this agency, food industries are obliged to follow rules and regulations
to make their products legally and credibly available to the consumers. FDA approved products allow
consumers to think that these products are safe, and increase the chances of possible sales.
Food Safety Act of 2013
AN ACT TO STRENGTHEN THE FOOD SAFETY REGULATORY SYSTEM IN THE COUNTRY
TO PROTECT CONSUMER HEALTH AND FACILITATE MARKET ACCESS OF LOCAL FOODS AND
FOOD PRODUCTS, AND FOR OTHER PURPOSES
The main objective of this act is to protect public from food-borne and water-borne illnesses and
unsanitary, unwholesome, misbranded or adulterated foods which can be obtained through purchasing of
products. The main sector affected by this law is the food industry sector which is obliged to follow all the
implementing rules under this Republic Act. Advertising is also a scope of this act; it refers to the business
of conceptualizing, presenting or making available to the public, through any form of mass media, fact,
data or information about the attributes, features, quality or availability of food and its related products for
the purpose of promoting its sale or distribution and enhancing economic activity (Article II of the Republic
Act No. 10611). This law promotes honesty of food corporations towards matters such as product labels
which must include information about the product, such as nutrition, size, and distribution and
manufacturing information. For consumers, this act makes a certain product more credible. Failure of
corporations involved to comply with laws could face lawsuits for violation.

Socio-cultural Macro-Environment Factors

Factor
Consumers are becoming more
health conscious6

Implication
People would increase their
demand regarding healthier
products
A possibility that the company
would invest in researching to
create a new or improve products
in align to the healthy
commodities that the consumers
perceive

Consumers like to try new things,

but loyalty is often elusive7

A possible increase in the cost for

creating an innovative product

Filipinos are short to medium in

height8

The value of new products could

be easily extinguished in a short
period of time
Increase in the demand for
Fortified and Functional Products

Supermarkets remain as the key

distribution channel9

Improvement in the quality of a

product that would satisfy the
well-being of the consumer
A possible creation of an
additional distribution channel
The company would give more
value and importance to
relationship retailing.

Effect on Product
Increase in the demand for Del
Monte 100% Pineapple Juice
with ACE because it is known for
building body resistance used to
prevent diseases
A possible increase in the
generated sales but price
increase if there will be
improvement to the product
Additional variety of Del Monte
Pineapple Juice
Inconsistency regarding the
sales of Del Monte 100%
Pineapple Juice with ACE

The demand for Del Monte 100%

Pineapple Juice with ACE would
increase because the pineapple
juice that is offered by Del Monte
Philippines, Inc. is already
fortified.
Possible increase in the
availability of Del Monte
Philippines, Inc. products in in
supermarkets.
Consideration of having more
sari-sari store retailers.

Health Conscious Consumers

People nowadays do pay attention to the different diseases that is emerging as well as to the
burden of high expenses when it comes to medical treatment. These factors lead them to become more
health conscious and wary to what they are consuming. The most noteworthy about this is it actually
increases the opportunity to innovate products which can accommodate the health concerns of the
people. Furthermore, as the companies put consideration in this matter, they are expected to offer healthy

6Health and Wellness in the Philippines, Euromonitor. October 10, 2015

7Philippines: Country Pulse, Euromonitor. October 10, 2015
8Health and Wellness in the Philippines, Euromonitor. October 10, 2015
9Health and Wellness in the Philippines, Euromonitor. October 10, 2015

products and at the same time be responsible in informing the people about the benefits of the ingredients
that are associated in the product.
Customers Perception in New Products and Their Loyalty
A company is expected to maintain and strengthen its relationship with its customers by providing
them a good value when it comes to their needs and wants. Not doing so, consumers would shift to other
companies that they think give more value. It is because consumers can be easily attracted by a new and
creative product especially if it is affordable.
In addition, it is true that the level of difficulty for a company to make sure that their customers
would remain loyal to them is high; however, understanding their behavior, needs and wants would
somehow help the companies to keep the customers even for some time and at the same time gather
more customers.
Filipinos Height
The people are now conscious with their physical attributes and that lead them to use products
that have nutritious contents for physical developments but more than that they are more concern with
their health.
The process of using fortification and functionality by a company would give them a distinction to
their competitors who also provide healthy products and would lead their consumers to their hopes of
achieving wellness. This is because the contents or ingredients of a fortified beverage are healthier than
other products.
Supermarket as the Key Distribution Channel
Sari-sari stores are still the preferred channel of distribution by the final consumers. However,
because of the limitations in the space in their stores and not so good ventilation, the beverages that
provide wellness are often accessible to the supermarkets. Furthermore, supermarkets are aggressively
expanding and that lead other companies to make their products available to the vicinity of their target
market.

Demographic Macro-EnvironmentFactors
Factor
Social class E is the dominant
social class in the Philippines10

Implication
People would spend less and buy
what is more necessary

Effect on Product
Decline in the sales of Del Monte
100% Pineapple Juice with ACE
Lesser economic opportunities
for the food and beverage
industries

10Income and Expenditure: Philippines, Euromonitor. October 10, 2015

Philippines is predominantly rural11

Increase the availability of

products in rural areas

Del Monte 100% Pineapple Juice

with ACE would be widely
distributed to the people in rural

A possible increase in generated

sales upon the penetration of the
company in rural areas

There would be additional

channels in rural areas for
distribution purposes.
Increase the cost in distribution
or transportation of the products
as well as in the promotional
strategy of the company

Social Class E
Philippines is dominated by a large group of social class E or low-income earners. In fact,
according to Euromonitor Social class E is expected to remain as the dominant social class in the
Philippines by 2030, representing 40.7% of the countrys population aged 15+ by that year. The age group
15-19 will continue to be most representative in social class E by 2030, driving demand for basic, budget
necessities, such as food and clothing. The data would give companies the interpretation that it is more
necessary to create products that have a good quality but somehow affordable, a product that is worth the
value for their customers money and price that is aligned in their income.
Philippines is Predominantly Rural
The rural areas in the Philippines are still predominant and 45% of the populations are classified
as urban. This means that the companies should also focus their attention to the possible market shares
that the people in the rural could give. Furthermore, they should also try to engage in modern retailing in
order to attract people in a way that the companies give people something new, convenient and
affordable shopping.

Technological Macro-EnvironmentFactors
Factor

Implication

Effect on Product

11New Emerging Markets: Nigeria, Indonesia, Mexico, the Philippines and Turkey,
Euromonitor. October 11, 2015

Innovative Packaging Industry Corp

to venture overseas12

Emergence and slow growth of

Internet Retailing13

A possible improvement in the

packaging

The continuous increase in the

significance of store-based
retailing
Internet Retailing might overcome
store-based retailing in the future

Social Media14

Increase of the consumers

awareness about the product
Less costly promotional
advantage

A more environmental friendly

packaging
There could be a possible
modification of the packaging in
Del Monte 100% Pineapple Juice
with ACE that would still preserve
its quality but gives people more
convenience.
The Del Monte Philippines, Inc.
should focus on distributing Del
Monte 100% Pineapple Juice
with ACE in physical stores but
they must not lose sight of the
benefits that internet retailing
could possibly give.
People will be easily provided
with different information about
Del Monte 100% Pineapple Juice
with ACE
Uncontrollable opinions of the
people about the product flaws,
which would give Del Monte
100% Pineapple Juice with ACE
a bad image
Reduced advertisement
expenses

B. Microenvironment Analysis
Competitor Analysis
Product
Target Market

Features and
Benefits
Packaging

Del Monte
Del Monte 100% pineapple juice with ACE
Equal ratio of male and female; 16 years
old and above
Health-conscious people
People who are considering to transfer
into a healthy lifestyle
Athletes and Sports Enthusiast
Students and Professionals
100% pineapple juice; rich with natures
phytochemicals; with Vitamins A, C, and
E; no sugar added; rich in anti-oxidants
240ml BPA-free can; packaging design

Dole
Dole 100% Pineapple Juice
Equal ratio of male and female; 16
years old and above
Health-conscious people
People who are considering to transfer
into a healthy lifestyle
Athletes and Sports Enthusiast
Students and Professionals
100% pineapple juice; rich in immunityboosting Vitamin C; fat-free;
cholesterol- free; no sugar added
Available in 190mL and 240mL BPA-

12Innovative Packaging Industry Corp in Packaging Industry (Philippines),

Euromonitor. October 10, 2015
13Retailing in the Philippines, Euromonitor. October 10, 2015
1414 Food Trends to Watch in 2014: Part Two, Euromonitor. October 10, 2015

Labeling

Wholesale
and
Suggested
Retail Price
Distribution
Network

III.

includes an illustration of a real pineapple

free can; packaging design includes an

illustration of a refreshing pineapple
juice in a pineapple core

Green, red, and blue combination of

colors; provides nutritional and
ingredients information; emphasizes
100% pineapple juice and Good source
of Vitamins A-C-E

Blue, yellow, red combination of colors;

provides nutritional and ingredients
information; emphasizes 100%
pineapple juice

SRP Php 21.90 - Php 31.00

SRP Php 21.45 - Php 32.00

Available in Big-Box Stores, Convenience

Stores, Drug Stores/ Pharmacies, FullLine Discount Stores or Mass
Merchandisers, Grocery Stores,
Hypermarkets, Merchant Wholesalers,
Sari-Sari Stores, Supermarkets

Available in Big-Box Stores,

Convenience Stores, Drug Stores/
Pharmacies, Full-Line Discount Stores
or Mass Merchandisers, Grocery
Stores, Hypermarkets, Merchant
Wholesalers, Sari-Sari Stores,
Supermarkets

Positioning
A. Primary Target Market
1. Demographic
The primary target market is of equal ratio of male and female, 16-45
years old, are students and employed individuals, and those who are within
Broad C to AB of socio economic group.
2. Behaviouristic
Consumers who purchase juice drinks more than once a week, and
considers Del Monte as the brand they use most often.
3. Psychographic
The primary target markets are those consumers who are healthconscious, converters into a healthy lifestyle, and/or sports enthusiasts.
B. Sales
According to the annual report presented by Del Monte Pacific Limited, sales in the
Philippines were US$350.9 million for the 16 months ending April 2015 and US$303.0 million
for FY 2015, a record for the Group in this market. FY2015 sales were 6% higher in US dollar
terms and 10% higher n Peso terms versus US$186.7 million in CY2013.
C. Marketing Mix
Product Offerings
I.

Beverages
A. Del Monte Tipco
1. Tipco 100% by Del Monte Cranberry Juice

II.

2. Tipco 100% by Del Monte Pomegranate Juice

3. Tipco 100% by Del Monte Broccoli Juice
4. Tipco 100% by Del Monte Mixed Vegetable Juice
5. Tipco 100% by Del Monte Orange Medley Juice
6. Tipco 100% by Del Monte Aloe Vera Juice
7. Tipco 100% by Del Monte Red Grape Juice
8. Tipco 100% by Del Monte Cherry Berry Juice
B. Del Monte Pineapple Juice
1.Del Monte 100% Pineapple Juice Drink
2.Del Monte Bone Smart 100% Pineapple Juice
3.Del Monte Bone Smart Orange Juice
4.Del Monte 100% Pineapple Juice with ACE
5.Del Monte 100% Pineapple Juice Fiber Enriched
6.Del Monte 100% Pineapple Juice Heart Smart
7.Del Monte Orange Juice Drink Heart Smart
8.Del Monte Sweetened Pineapple Juice Drink
9.Del Monte Sweetened Orange Juice Drink
10.
Del Monte Sweetened Mango Juice Drink
11.
Del Monte Sweetened Four Seasons Juice Drink
12.
Del Monte Pineapple Orange Juice Drink
13.
Del Monte Pineapple Crush Juice Drink
C. Del Monte Fit N Right
1.Del Monte Fit n Right Pineapple Juice Drink
2.Del Monte Fit n Right Pineapple Orange Juice Drink
3.Del Monte Fit n Right Four Seasons Juice Drink
4.Del Monte Fit n Right Apple Juice Drink
5.Del Monte Fit n Right Orange Juice Drink
6.Del Monte Fit n Right Watermelon Juice Drink
7.Del Monte Fit n Right Pineapple Juice Drink
8.Del Monte Fit n Right Pineapple Juice Drink
D. Del Monte Fruitastic
1.Del Monte Fruitastic Pineapple Juice Drink
2.Del Monte Fruitastic Orange Juice Drink
3.Del Monte Fruitastic Four Seasons Juice Drink
Culinary
A. Condiments
1.Del Monte Original Blend Ketchup
2.Del Monte Sweet Blend Ketchup
3.Del Monte Hot 'n Spicy Ketchup
4.Del Monte Sweet Chili
5.Del Monte Red Cane Vinegar
6.Del Monte Spaghetti
7.Del Monte Spaghetti Merienda Pack
8.Del Monte Salad Macaroni
9.Del Monte Elbow Macaroni
B. Sauces
1.Del Monte Quick n Easy Products
a) Del Monte Quick 'n Easy Mechado Sauce
b) Del Monte Quick 'n Easy Caldereta Sauce
c) Del Monte Quick 'n Easy Menudo Sauce
d) Del Monte Quick 'n Easy Afritada Sauce
e) Del Monte Quick 'n Easy Sweet and Sour Mix
f) Del Monte Quick 'n Easy KareKare Mix
g) Del Monte Quick 'n Easy Curry Mix
h) Del Monte Quick 'n Easy Gata Mix
i) Del Monte Quick 'n Easy BBQ Marinad

j) Del Monte Quick 'n Easy Breading Mix

k) Del Monte Quick 'n Easy Sweet Pizza Sauce
l) Del Monte Quick 'n Easy Italian Pizza Sauce
2.Del Monte Original Style Tomato Sauce
3.Del Monte Tomato Sauce with MMK
4.Del Monte Tomato Paste
5.Del Monte Filipino Style Tomato Sauce
6.Del Monte Italian Style Spaghetti Sauce
7.Del Monte Sweet Style Spaghetti Sauce
8.Del Monte Filipino Style Spaghetti Sauce
9.Del Monte Cheese Magic Sauce
10.
Del Monte Tomato & Cheese Gourmet Pasta Sauce
11.
Del Monte Beef & Mushroom Pasta Sauce
12.
Del Monte Original Style Tomato Sauce (200g)
13.
Del Monte Restaurant Style Fried Chicken Mix
III.

Fruits
A. Mixed Fruits
1.Del Monte Fiesta Fruit Cocktail
2.Del Monte Fruit Snacks - Tropical Mix
3.Del Monte Fruit Snacks - Pine Orange
B. Pineapples
1.Del Monte Sliced Pineapple
2.Del Monte Pineapple Tidbits
3.Del Monte Pineapple Chunks
4.Del Monte Crushed Pineapple

Image courtesy of: delmontepacific.com

Place of Distribution
Current Distribution Network: (Distribution Channel Structure)

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Current Distribution Network: Explanation

Del Monte Philippines, Inc.s system of getting its goods available to the consumers has a very wide
scope. The company makes sure that its products are available wherever the demand and the
competition are.
Based on the diagram above, the transfer of goods starts from the manufacturer, wholesalers,
retailers, and ends with the consumers. The company must make sure that its products are available
wherever the demand may be in order to promote perfect retail value.
Del Monte Philippines, Inc. includes Big Box Stores, Convenience Stores, Drug Store/
Pharmacies, Full-line Discount Stores/ Mass Merchandisers, Supermarkets and Hypermarkets, Grocery
Stores, and even Merchant Wholesalers as its channel members. From the company, the goods are
distributed to all these channel members who then sell through retailing. These channel members, also
known as retailers, make the Del Monte Philippines, Inc. products available to the end-users - the
consumers. Through different agreements made by Del Monte Philippines, Inc. and its channel members,
retailers are able to sell products at agreed upon prices. Usually, the convenience stores offer the most
expensive price to the market.

A good distribution channel paves way to company growth in terms of sales and profits and
product availability. It is one of the main factors that a company must consider in accordance to the
pursuit of having a good position in the market. A good relationship between manufacturer and retailers is
also required to avoid conflicts and to promote synergy between each other. Without a proper and
planned distribution channel, a company may find it difficult to make its products available to consumers,
which can result to loss of profit and poor turnovers.
Price
Del Monte Philippines, Inc. provides high quality products that accommodate the needs and
wants of the consumers. People who are actively engaged in buying and consuming the products of Del
Monte could be assured that the process of producing all its products is International Standardization
Organization certified. This creates a strong indication that the value of DMPIs products is reflected on
their price. It is reasonable for the company to come up with how they put prices on their products
because of the fact that they are basing it on the expenses that they incurred and the assumed profit that
they could possibly get.

Promotion
Del Monte Philippines, Inc. products are promoted through traditional way of marketing (i.g.
television,

posters,

and

magazines).

The products are

mostly promoted

through

television

advertisements, and are advertised by personalities who are highly influential to people. DMPI also
exposes its products through product display in different participating outlets.
DMPI uses content marketing in order to share all the important content of the product in order to
acquire or retain customer. It is an approach focused on creating and distributing valuable, relevant, and
consistent content to attract and retain a clearly-defined audience and, ultimately, to drive profitable
customer action.