Del Monte Philippines Inc. (DMPI) has grown to become Asia’s leading pineapple exporter with dominant market share in China and as top three supplier in Japan and Korea.
GlobalData, an analytics and consulting company, reported that DMPI is the largest fresh pineapple exporter to China, accounting for 53 percent of the market in 2020. DMPI is also among the top three fresh pineapple suppliers in Japan, its second-biggest market, and South Korea, where DMPI has 33 percent and 21 percent market shares, respectively.
According to DMPI, its export has been largely due to its ability to deliver premium quality year-round and its preferred pineapple variety MD2.
“Today DMPI is one of the three largest exporters of MD2 pineapple in Asia given the convergence of natural conditions that are uniquely abundant in the Philippines, complemented by extensive human and technological resources, and an enterprising commercial acumen and business leadership which have enabled DMPI to deliver premium quality pineapples through its business partners,” said the company in a statement.
Costa Rica, which is located on the other side of the globe and producer of MD2, is too far to be able to compete with MD2 growers from the Philippines. Other producers of similar quality pineapples in Taiwan have a short seasonal harvest period of only a few months given their climate. The same is true for mainland China.
This resulted in import volume of 182 million kilograms last year where China is DMPI’s primary driver of growth in the North Asian markets. China’s import of fresh pineapples grew at a compounded average growth rate (CAGR) of 18 percent from 2015 to 2020.
This strong export performance has enabled DMPI’s fresh pineapple exports to grow revenues by 37 percent, from P4.2 billion in April 2019 to P5.85 billion ($119.9 million) in April 2021. There is plenty of headroom for growth as the value of fresh pineapple imports into China is expected to grow at 9 percent per year between 2021 and 2026 according to GlobalData.
Already, DMI plans to penetrate more retail outlets in tier 1 cities and move inward to tier 2 and tier 3 cities in China by adding new distributors. The company aims to double by 2025 its fresh pineapple retail distribution network that currently has about 15,000 outlets.
DMPI’s fresh pineapple exports are a significant part of its branded business. Its MD2 variety is sold primarily under the “S&W Sweet 16” brand in China, Japan and South Korea. “Chinese consumers prefer trusted brands such as S&W which consumers are willing to pay a premium for,” said Mr. Liu Zhijie owner of Goodfarmer Foods Holding Group Co., Ltd., one of the leading fresh produce distribution companies and DMPI’s key distributor in China.
“We are very pleased to be a partner of DMPI in expanding the fresh pineapple business in China where per capita consumption of imported pineapples is much lower than in other North Asian markets.”
Likewise, DMPI aims to leverage the strength of its key distributor relationships in the region to expand its presence in Japan and South Korea where it is among the top three exporters. “The high quality of fresh pineapples that we source from DMPI is the reason why they are among the market leaders in Japan. They have established a reputation for quality,” said Tatsuya Ishiguro, President of Union Co. Ltd., one of the largest fresh distribution companies and DMPI’s biggest distributor in Japan.
In order to remain competitive, DMPI will continue to sustain its premium quality, increase its hectarage for MD2 pineapples, improve its operational efficiency, and reinforce its business partnerships to expand its branded business and solidify its market leadership.
DMPI’s pineapple variety MD2 is a premium fruit with a bright golden yellow color, exceptional sweetness, lower acidity, better appearance and longer shelf life. Aside from its premium taste, MD2 has better nutritional content with four times more vitamin C than regular pineapples and is thus much sought after.
It took DMPI a decade to achieve the industrial scale suitable for commercialization, not an easy feat to replicate with high barriers to entry, a confluence of factors which include strategic location, availability of land and planting material, ideal growing conditions, highly-skilled human resources and growing technology.
To begin with, the Philippines, in particular Mindanao, is part of the global “pineapple belt,” the same latitude that includes Hawaii, where MD2 was first developed, and Costa Rica, where the fruit was further propagated on a large scale. Such geographies possess the stringent requirements of soil, elevation and climate which are optimal for growing MD2 all year-round.
DMPI was already one of the largest exporters of the champaca pineapple variety, primarily used for packaged fruit, when it decided to grow MD2 which now accounts for 28 percent of its 26,000-hectare plantation, one of the largest integrated and contiguous pineapple plantations in the world. More than a decade ago, DMPI began hiring the best talent available from Costa Rica, the world’s largest exporter of MD2, which is not easy to propagate. Such expertise found fertile ground and deep roots in Del Monte Philippines given the company’s agricultural expertise and infrastructure. With a 95-year history of growing pineapples, DMPI draws from decades of experience through its generations of growers that handed down and honed the best agronomic practices to sustain the land and the quality of its produce.