Bharti Enterprises plans exit from Del Monte Foods joint venture in India

Del Monte Foods has remained a small venture and is unable to compete with larger packaged foods businesses, said an executive of Bharti Enterprises

Bharti Enterprises is looking to exit Del Monte Foods, its 50:50 joint venture with Singapore-listed packaged foods company Del Monte Pacific Ltd, reported the Economic Times (ET), citing executives. The venture was set up to sell juice, fruit drinks, olive oil, pasta, mayonnaise, ketchup and dried and canned fruits in India.

"Bharti group has mandated bankers to identify potential buyers to sell its stake in Del Monte Foods. Foods is a non-core business for Bharti, which wants to focus on its core businesses such as telecom and broadband under Airtel," one of the executives mentioned told ET.

"Besides, Del Monte has remained a small venture and is unable to compete with larger packaged foods businesses," he added.

According to data from the business intelligence portal Tofler, Del Monte Foods reported a revenue of Rs 536.36 crore in the financial year 2023. The company incurred losses amounting to Rs 15.2 crore during the same period.

In 2004, Bharti Enterprises and the global investment group E L Rothschild established FieldFresh Foods as an equal joint venture to produce and export fresh vegetables and fruits. In 2007, Del Monte Pacific Ltd, a company listed in Singapore, acquired a 40.1 per cent stake in FieldFresh Foods for $20.8 million. Bharti maintained a 50 per cent stake in the company, while Rothschild remained a minority partner.

In 2021, FieldFresh Foods underwent a rebranding to become Del Monte Foods Pvt Ltd. The company stated that this change was aimed at providing a "sharper focus on branded processed foods and retail businesses".

The retail segment constitutes over half of Del Monte's business in India, with the remaining share directed towards business-to-business or institutional customers. This latter includes products such as ketchup, dried fruits, and juice drinks, which are supplied to quick-service restaurants, airlines, and other institutional channels.

"It is not yet clear if Del Monte Pacific plans to scale down its India operations and sell its products only through imports, or whether it wants to collaborate with other partners in India after Bharti's expected exit in the joint venture," the executive told ET.

Del Monte Pacific group holds exclusive rights to distribute Del Monte processed products and beverages in the Indian subcontinent and the Philippines, as per its website. The company is listed on both the Singapore and Philippine stock exchanges.

In India, players in the mayonnaise and condiments segment include Dr Oetker and Veeba, apart from Del Monte.