From the pages of Jim Prevor’s Perishable Pundit
With relentless pressure on margins in all commodity produce driven by the ever-increasing power of large buyers, the necessity of innovation has never been greater. Fresh Del Monte has invested in innovation, whether varietal — its Del Monte Gold Pineapple was the single greatest leverage tool in the produce industry for a while — or structural — methodically building a network of regional processors. Now Fresh Del Monte decided, in one fell swoop, to buy an innovation factory and scale up its product line to be able to face retailers across a broader spectrum. We speak, of course, of the announcement that Fresh Del Monte will purchase Mann Packing.
From a business perspective, it is hard to think of a more synergistic acquisition. The storied Del Monte brand had its roots in vegetables, with canned green beans and the like creating billions of multi-generational impressions that have sunk into the collective sub-conscious of the nation and the world. Yet the fresh company had its strength in fruit — pineapples and bananas notably, but also fresh-fruit processing. Now, in one fell swoop, Fresh Del Monte has a division that is a leader in fresh-cut vegetables.
No business strategies have been announced, and for the moment, there will be no changes for customers. The Mann management team stays, and the company will operate just as before. But one doesn’t have to have inside information to imagine the Del Monte brand starting to appear on fresh-cut vegetable packs and other innovative products that Mann is known for.
The deal also points to the evolution in the business that is favoring multi-product companies. Once one company starts to broaden its range, others find the necessity to do the same; otherwise competitors, profiting on other lines, can eviscerate margins on the one competitive category and kill a business. Broad diversity of product, geography and customer type makes a company invulnerable to this strategy. So, Del Monte is acquiring not just a source for new product ideas and not just a new business line, but a strategically more defensible position in the industry.
The whole deal reminds us of something that has often been dismissed in recent times: The enormous value of experience. Deals like this involve many people doing many things but, despite its good sense, the deal might never have happened if Fresh Del Monte had not hired Emmanuel Lazopoulous, now Senior Vice President of North America Sales, Marketing and Product Management.
Emmanuel joined Fresh Del Monte back in 2005 to run its Fresh-Cut operation. His career, though, includes time as the Managing Director of NewStar Fresh Foods, as Vice President of DNA Plant Technology and as Vice President of Dole Fresh Vegetables — in other words, he spent a lot of time in Salinas.
There are many companies that are buying other companies today — there is private equity and venture capital funds, for example. But for a family business like Mann, finding a home that will lead to success for grower partners, for employees, for the living embodiment of generations of sweat and tears, these are not trivial matters.
Over and over again, we have heard the same story: a team of super-smart, super-educated private equity analysts march into a business to review the numbers and do the analytics but also say they have no interest in touring the plant, so they turn off the very people they need to get excited about a potential combination. It is no stretch to imagine that decades of familiarity raised the comfort level and facilitated the deal.
There has been an enormous drain of produce experience from important produce companies and their retail customers. But deals like this remind us that though the loss may not always be evident or be easily quantified, it is real. One opportunity, one moment, one connection, can cover a lifetime of salary.
Selling a successful family business is always filled with both excitement and trepidation, hope and a tinge of melancholy. But family businesses are always challenged by the mere passage of time. With each successive generation, ownership gets more diffused, difficult decisions have to be made about how to deal with the differing financial interests of those family members who work in the company and those who do not; estate taxes must be paid with each generation, and shareholders, once bound by love, respect, history, familiarity and propinquity — so often become strangers. If the right situation presents itself at the right time, a sale solves many problems and actually sets the business up for continued growth.
This particular story is a great drama. It includes great loss, but also stands as testament to the extraordinary resilience of the human spirit and the extraordinary importance of the individual.
It has a heroine… Lorri Koster, née Nucci, Chairman and CEO of Mann Packing Co., shepherded Mann through this process. She ran this ball down the field and carried it over the line. But she was not the football player in the family.
The plans once made called for her brother, Joe, to head up the company. We were with Joe when he died and wrote about that here. When these settled plans were disrupted, nine out of ten companies would have never recovered. But the Nucci’s and the Ramsey’s circled the wagons. Lorri’s father, Don Nucci, and Bill Ramsey jumped in, but Don died shortly thereafter.
Lorri, though, always connected to the family business, had left full time employment to try other things, including a stint at a produce dot com, setting up her own marketing agency, buying a local magazine and, we are proud to say, spending some time working with Pundit sister publication, PRODUCE BUSINESS magazine.
But in the aftermath of the passing of both her brother and her father, this baseball Mom, with support of her sisters DeeDee and Gina, would come to guide Mann Packing to its present prosperity. To take a reputation for ethical business conduct, combine it with innovation, position it as Moms selling to Moms and complete the transformation of what was once the largest commodity broccoli shipper in the country into a kind of produce skunkworks that boosts sales and consumption with the quality of ideas well-executed.
We’ve written before of our time with Lorri introducing Broccoli Cole slaw, and we know that she and her brother even back then were whispering thoughts about what one day might be the right moment to get investors or to sell. And we can just see her father Don and brother Joe looking down on the Lorri and cheering her on.
Fresh Del Monte is a good home for Mann. The company knows growers, has facilities that can be jointly leveraged — say regional vegetable processing — it won’t run from a food safety issue, and both companies combined can leverage transportation and procurement.
This story, though, tells us that buildings and equipment are just the public manifestation of the story. It is the character of people that matters more than anything. Emmanuel had to be seen as a man of good character and integrity; if not, having been in Salinas would have been a negative. Lorri had to undertake responsibilities when others might not have done so. She had to persevere under tragic circumstances when others would have not been able to. Amidst darkness, she had to broadcast a light that would inspire others to follow —and she did.
In business, everyone will look for opportunities to trade and engage with the new, larger, Fresh Del Monte, but the profit to be derived by watching this deal is the lesson that experience matters, that perseverance matters and the character matters —above all.