Posted: June 27th, 2015

Fresh Del Monte is a public agricultural industry that was founded in 1886 at San Francisco in California.

Fresh Del Monte Produce

Fresh Del Monte is a public agricultural industry that was founded in 1886 at San Francisco in California. This industry is a global producer, marketer and distributor of fresh and fresh-cut fruit and vegetables. Fresh Del Monte Produce is also a producer and distributor of prepared fruit and vegetables, juices, beverages, snacks and desserts in Europe, the Middle East and Africa.( Josling, Tim, and T G. Taylor, 53)

Out put

The global business of this industry conducted through subsidiaries, is primarily the worldwide sourcing, transportation and marketing of fresh and fresh-cut produce together with prepared food products e.g., juices, beverages, snacks and others, in Europe, Africa and the Middle East. They distribute their products in North America, Europe, Asia, the Middle East, Africa and South America.

Inputs

The industry source its fresh produce products (bananas, pineapples, melons, tomatoes, grapes, apples, pears, peaches, plums, nectarines, cherries, citrus, avocados, blueberries and kiwi) primarily from Central and South America, Africa, the Philippines, North America and Europe.

Technological processes involved

The management has been developing the company in the last four years in a very aggressive way through the expansion of its network of state-of-the-art US distribution centers, where it is utilizing advanced technologies that enable them to provide their customers with the highest quality fresh produce. They are also offering their customers marketing and merchandising strategies that will assist them in building traffic and enhancing their image.

Their specifications require extensive sampling at all stages of the production and distribution process to ensure high quality as well as to identify any defects. They have repeatedly achieved the industry’s highest recognition for this research and Fresh Del Monte’s adherence to a strict program that focuses on exemplary quality, production and management systems in their facilities.

They have expanded and are still expanding their fresh produce line, initiating cost-reduction programs throughout the company, adding and enhancing their powerful distribution network, expanding their global presence and employing advanced technology to better serve the needs of their customers. (Hui,354).

Market structure

Fresh Del Monte is one of the few vertically integrated produce companies in the industry, allowing them to manage every step in the growing, packing, shipping and distribution of their fresh and fresh-cut produce to the consumers. This gives them leverage that is not present in the market among their competitors.

Demand curve and factors affecting it;

The demand for Del Monte Products is high because of the high quality of its products, large number of potential buyers and less competition from other industries, so the demand curve has shifted to the right. A number of factors may influence the demand for a product, and changes in one or more of those factors may cause a shift in the demand curve. Some of these demand-shifting factors are; customer preference, prices of related goods, income, the number of potential buyers and expectations of a price change.

Supply curve;

The supply curve of Del Monte Products too is shifted to the right because almost all factors affecting supply in this industry favor it positively. For instance, technological advances that increase production efficiency shift the supply curve to the right.

 

Are firms Price taker or can they set price?

Firms should be price setters and not price takers. The price takers deal with commodities but price setter deal with brands. For a commodity, there is no unique feature or difference, Price is supply driven and it is easily substituted but for a brand, there are many advantages e.g., reduced marketing costs due to consumers’ brand awareness and loyalty, price premium because the brand has higher perceived quality, protection against price competition from other products,

Economic profits

According to the chairman of Del Monte Produce, Mr. Abu-Ghazaleh, “Our goal is to continue to achieve worldwide market leadership in this highly competitive business and become the nation’s leading producer of branded fresh fruit and vegetables. Going forward, we anticipate growth between 12%-15% on an annual basis, this is without acquisitions”. This clearly indicates that the firm is making economic profits.

 

Significant events that recently impacted the market equilibrium, and the effect

The company moved into the ‘value-added’ national fresh-cut fruit and vegetable business ‘ an undeveloped and highly fragmented area that holds tremendous growth potential for Fresh Del Monte. The problem with fresh produce companies is that, there is no predictability. There are many uncontrollable factors that have constrained their performance. The company deal in perishables, and these perishables are susceptible to nature’s forces, be it fluctuations in temperature or precipitation.

 

 

Works Cited

Josling, Tim, and T G. Taylor. Banana Wars: The Anatomy of a Trade Dispute. Wallingford, UK: CABI Pub, 2003. Print.

Hui, Y H. Handbook of Food Products Manufacturing. Hoboken, N.J: Wiley-Interscience, 2007. Print.

 

Expert paper writers are just a few clicks away

Place an order in 3 easy steps. Takes less than 5 mins.

Calculate the price of your order

You will get a personal manager and a discount.
We'll send you the first draft for approval by at
Total price:
$0.00
Live Chat+1-631-333-0101EmailWhatsApp