Fresh Del Monte CEO: We see a lot more normalcy in the market
The chief of Fresh Del Monte Produce says that that fruit and vegetable markets are returning to normal following a period of disruption caused by the Covid-19 pandemic.
On a Wednesday earnings call for the first quarter, chairman and CEO Mohammad Abu-Ghazaleh also spoke about how he expects the company to emerge from the crisis stronger than before, the recently "catastrophic" pineapple market, and plans to increase its share of the North American avocado market.
Fresh Del Monte reported a year-on-year decline in income for the first quarter after its sales were across all markets. The almost-entire loss of foodservice channels over recent weeks also impacted the company's financial performance.
Turmoil in the pineapple market
While the banana market has remained relatively stable, Abu-Ghazaleh explained that the pineapple market has been particularly challenging over recent weeks, with retailers favoring other fruits in their stores.
"What happened with the pineapples in particular during the last, I would say six weeks, has been catastrophic, because what we saw is that we were expecting to have the Easter period where ... pineapples sales usually climb up drastically," he said.
"But, unfortunately, with what is going on right now in the market, supermarkets, retailers didn’t want even to promote pineapples, didn’t want even to put pineapples on their shelves, because they said that this is not an essential item."
"And what we saw is that there was an avalanche of volumes coming into the market with not much buyers. And that’s the fact and it has really impacted us during the first quarter and the first couple of weeks of this month."
Markets returning to normal
However, Abu-Ghazaleh said that now the situation for pineapples - and for produce in general - is returning to normal.
"As we speak today, I see a much better market going forward. We see a lot more normalcy in the market. We see the pineapple coming back to normal behavior, and we see a very promising signs even from the foodservice that the volumes and the demand is picking up," he said.
"We can see this even during this week that things are changing. And I believe that we are in a very strong position, and let me be very clear on that."
Fresh Del Monte will come out of this crisis "stronger than before, because for us, during this crisis we have seen all the weak spots," he said.
"We have so many things going on in the next few months that will substantially strengthen our business," he said.
Fresh Del Monte "very confident" in future of avocado business
On Fresh Del Monte's avocado business, Abu-Ghazaleh said that for many years the company has been buying entirely from third-party packers, but earlier this year it opened a "state-of-the-art" packhouse in Mexico.
"Now we are packing almost everything in our plant. So I think this will reflect also on our cost, our quality and our service to our customers. So we are very confident," he said.
"Going forward, I think that our market share and our presence in the market will be very significant through the new kind of streamlining our business, avocado business, in North America, Europe and Asia.
"And it’s not only this plant that we built there. It’s not only for North America. But it serves Europe; it serves Asia, MENA, and North America, of course, the biggest market. But we are very confident and very enthusiastic about the future for the avocados going forward really."