Del Monte Philippines Inc. is looking at more ways to further expand the distribution of its fresh MD2 pineapple into China, Japan and South Korea as the Philippine industrial-agro giant maximizes the potential of the variant in North Asia.
MD2 is the preferred variety of pineapple in the fresh market as 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.
The company, which is in the middle of a P44.13- billion initial public offering plans to penetrate more retail outlets in tier 1 cities and move inward to tier 2 and tier 3 cities in China, working to double its retail distribution network 2025 from the present 15,000 outlets.
The company 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, while expanding the hectarage for MD2 pineapples in Mindanao.
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.
With the MD2 pineapple, Del Monte Philippines has become one of the three largest exporters of the variant in Asia.
The Philippines produced 2.7 million metric tons of pineapples a year, data from the Department of Agriculture showed.
Del Monte Philippines was one of the largest exporters of the champaca pineapple variety, primarily used for packaged fruit, when it decided to grow MD2 more than a decade ago.
The variant now accounts for 28 percent of its 26,000-hectare plantation, one of the largest integrated and contiguous pineapple plantations in the world.
Taking guidance from experts from Costa Rica, the world’s largest exporter of MD2, Del Monte Philippines successfully cultivated the variety in Mindanao given its agricultural expertise and infrastructure.
GlobalData, an analytics and consulting company, reports that the company is the largest fresh pineapple exporter to China, accounting for 53 percent of the market in 2020, and is 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.
With an import volume of 182 million kg in 2020, China is DMPI’s primary driver of growth in the North Asian markets, and China’s import of fresh pineapples grew at a compounded average growth rate (CAGR) of 18 percent from 2015 to 2020.
“This has enabled Del Monte Philippines’ 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,” Del Monte Philippine said.
