Del Monte Foods today (3 December) revealed that it will increase its marketing spend in the second half of its fiscal year, with a particular focus on fruit.
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Speaking at the company’s first-half earnings conference, chief executive Richard Wolford said the firm was looking to increase marketing support and promotional spend by 55-65% on the previous year to around US$70m.
“This will provide a very strong tailwind as we head into 2011,” Wolford told analysts. “We are increasing our promotional spending particularly in our fruit division as competition has increased. We have a very effective set of creatives supporting our brands, which will positively impact our fiscal 2011.”
Del Monte Foods today posted an increase in income from continuing operations of US$121.2 compared to $40.3m in the previous year. The figure includes pre-tax costs of $17m relating to the company’s recently closed notes offering and tender offer.
Net sales for the first half of fiscal 2010 amounted to $1.77bn, an increase of 8.9%, while operating profit rose to $261.5m from $92.8m in 2008.
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By GlobalDataWolford added that the actions the company plans to take in marketing and promotions, will be further driven by innovation. “We have a very, very strong focus on that and we have a great deal of internal energy in driving innovation in the top line.
“We will have a heavier weight in trade in the next half, because of the general consumer focus on value which is driving aggressive actions across the industry. When we look at competing against larger players, they may have scale but when you get down to the business, it’s a brand issue and each one of our brands plays an important role in those categories.”
Wolford told analysts that the company “feels good” about what it sees in fiscal 2011.
“We will exit fiscal 2010 and enter fiscal 2011 with a very strong position in the market and a very strong position with the consumer with our marketing. We have modified our tactics to make sure that takes place,” he insisted.
Del Monte Foods shares were up 4.01% to $11.40 at 11.10am (ET) today.
