Del Monte Foods: Chapter 11 After Acquisition Debt and Consumer Shift

Del Monte Foods Corporation II Inc., a 139-year-old producer of canned fruits and vegetables, filed for chapter 11 bankruptcy protection on July 1, 2025. The filing follows the company's 2014 acquisition and comes amid reporting on consumer shifts away from shelf-stable processed foods. With more than $1 billion in liabilities and between 10,000 and 25,000 creditors, Del Monte is pursuing a court-supervised 363 sale backed by $912.5 million in debtor-in-possession financing, with its prepetition lenders positioned as the stalking horse bidder through a credit bid. The case remains active as of January 2026, with Del Monte announcing three successful bidders across its business segments: Fresh Del Monte Produce for vegetable, tomato, and refrigerated fruit assets (including the JOYBA beverage brand), B&G Foods for the broth and stock business (College Inn and Kitchen Basics), and Pacific Coast Producers for shelf-stable fruit assets, including rights to use the Del Monte and S&W brands for shelf-stable packaged fruit in the U.S. (including Puerto Rico) and Mexico. The sale hearing is scheduled for January 28, 2026, with closing expected by the end of the first quarter of 2026.

Brand History

The Del Monte brand's history stretches back to California's early commercial canning industry. In 1886, Oakland-based wholesale grocer Tillman & Bendel created a premium blend of coffee for Hotel Del Monte on the Monterey peninsula, marking the first use of the Del Monte name. The brand expanded in 1891 when Frederick Tillman Sr. founded the Oakland Preserving Company, obtaining a license from the hotel to extend the Del Monte name to canned fruits and vegetables, beginning with peaches and apricots sourced from California's Central Valley orchards. By 1892, Del Monte was used as the brand name for canned produce.

The industry consolidated in the following years. In 1898, the California Fruit Canners Association formed through the merger of 18 West Coast canning companies. By 1907, The Cannery in San Francisco had become the largest fruit and vegetable cannery in the world. The company reorganized as California Packing Corporation (Calpak) in 1916, and the Del Monte brand continued to expand alongside demand for canned goods.

Through various corporate transformations over the following decades, Del Monte became a major U.S. canned foods brand. The brand diversified into tomato products through the 1997 acquisition of Contadina from Nestlé, and added the College Inn broth brand and S&W canned vegetables to create a portfolio spanning core shelf-stable categories.

The 2014 Acquisition. On February 18, 2014, Del Monte Pacific Limited—a food and beverage conglomerate dual-listed on the Singapore Exchange and Philippine Stock Exchange—closed its acquisition of Del Monte Foods' Consumer Products business for $1.675 billion. The deal included the Del Monte, Contadina, College Inn, and S&W brands, along with manufacturing facilities and distribution infrastructure. At the time of acquisition, the portfolio held the number one position in branded canned fruits and vegetables and the number two position in canned tomatoes and broths.

The acquisition was funded through approximately $745 million in equity plus $930 million in long-term financing arranged by Citibank and Morgan Stanley. The transaction left Del Monte with $1.245 billion in secured debt, and industry reporting estimates annual interest payments increased from $66 million in fiscal year 2020 to $125 million by fiscal year 2025.

Brand portfolio. At the time of filing, Del Monte Foods' portfolio encompassed seven distinct brands serving the retail grocery channel. The Del Monte brand includes canned fruits and vegetables. Contadina provides tomato-based products including sauces, paste, and diced tomatoes. College Inn and Kitchen Basics compete in the broth and stock categories. S&W offers canned vegetables and beans. Take Root represents the company's entry into organic products.

The most notable recent addition is Joyba bubble tea, launched in 2021 as what the company described as a first-of-its-kind innovation delivering the boba shop experience through a proprietary cup with integrated straw. Now available in eight flavors at retail stores nationwide, Joyba expands the portfolio beyond canned goods. While Joyba and the broth lines showed sales growth in fiscal 2024, those gains did not offset weaker sales of canned products.

Path to Bankruptcy

Del Monte's chapter 11 filing followed leverage pressures, a 2024 debt restructuring effort and related litigation, declining canned food consumption, a 2023 production build that preceded a sales decline, and steel tariffs that increased can costs.

Acquisition debt burden. The 2014 acquisition left Del Monte with $1.245 billion in secured debt. Industry analysis reported that annual interest payments increased from $66 million in fiscal year 2020 to $125 million by fiscal year 2025.

The 2024 liability management exercise. In 2024, Del Monte attempted a liability management exercise aimed at restructuring approximately $240 million in debt. The transaction used a "drop-down transaction" that transferred key assets outside the reach of certain creditors.

The move triggered immediate legal challenges. A group of lenders objected to the restructuring plan, arguing that the asset transfer improperly subordinated their claims. The litigation was settled in May 2025, and the settlement required Del Monte to accept a loan modification that increased its interest expenses by an additional $4 million annually.

Consumer shift away from canned foods. Consumers have increasingly turned away from canned foods in favor of fresh, frozen, and refrigerated alternatives. According to Euromonitor data cited in industry reports, canned fruit and vegetable sales declined globally between 2019 and 2024. Fresh food has grown in both value and units for the last two consecutive years, while canned goods have declined in units over the same period. Industry commentary has linked the shift to perceptions about processed foods.

Sarah Foss, global head of legal and restructuring at Debtwire, said consumer preferences have shifted away from preservative-laden canned food in favor of healthier alternatives.

Operational decisions and market pressures. The company reported operational decisions tied to demand forecasts as market conditions shifted. In 2023, Del Monte anticipated higher sales volumes and racked up additional debt to fund increased production capacity. When sales instead fell in the following fiscal year, the company was left with outsized production commitments, elevated costs, and the need for increased promotional spending to move inventory.

Grocery inflation drove consumers to seek cheaper store brands, increasing competition in categories where private label products compete on price. The company also reported a decline in its private label business.

Tariff exposure. In June 2025, President Trump's 50% tariff on imported steel took effect. For a company that packages its products in metal cans, the tariff was expected to push up the prices it pays for cans.

The 363 Sale Process

Del Monte's restructuring strategy centers on a court-supervised sale process designed to transfer the business to new ownership while preserving operations and employment. The company obtained interim approval for debtor-in-possession financing immediately upon filing, enabling continued operations through the 2025 pack season when agricultural products are harvested and processed for the coming year.

DIP financing structure. The $912.5 million DIP financing package consists of two facilities designed to address the company's distinct capital needs.

The DIP ABL Facility provides $500 million in superpriority senior secured revolving commitments, carrying interest at SOFR plus 5.50%. This facility replaced the prepetition asset-based lending facility upon closing and provides the liquidity necessary for ongoing operations, including the substantial working capital requirements associated with purchasing agricultural inventory during pack season.

The DIP Term Loan Facility totals $412.5 million, structured as a combination of new money lending and a roll-up of prepetition debt. Of the total, $165 million represents new funding—actual cash infused into the estate to support operations and the sale process. The remaining $247.5 million consists of a roll-up of the prepetition Super-Senior First-Out Loans, converting that prepetition obligation into DIP debt with superpriority administrative expense status.

The term loan carries interest at SOFR plus 9.50%, structured as 1.00% cash pay and 8.50% payment-in-kind, meaning most of the interest accrues rather than requiring current cash payments.

Roll-up structure. The $247.5 million roll-up component of the DIP term loan converts prepetition claims into postpetition DIP debt, elevating their priority ahead of other prepetition creditors. For the lenders providing the DIP financing, the roll-up gives their prepetition claims superpriority administrative expense status.

Both facilities mature nine months after the petition date, establishing a timeline for the sale process. The DIP motion was filed on July 2, 2025, with interim approval granted the same day. Final DIP approval came on August 12, 2025, after a contested hearing process.

Interim funding. At the interim stage, the court authorized $100 million in new money borrowing and $150 million in roll-up loans, along with approximately $211.2 million in DIP ABL loans deemed funded to refinance amounts outstanding under the prepetition ABL facility.

Bidding procedures and stalking horse. The sale process follows a structured timeline established by the bidding procedures order entered on August 13, 2025.

The Ad Hoc Term Lender Group—the same secured creditors providing the DIP term loan—serves as the stalking horse bidder through a credit bid. The bidding procedures provide that no break-up fees, expense reimbursement, or topping fees are permitted.

Credit bid dynamics. The credit bid structure means the lenders can bid up to the face value of their secured claims without requiring cash funding. Section 363(k) of the Bankruptcy Code generally permits secured creditors to credit bid the amount of their claims at any sale of their collateral. For the Ad Hoc Term Lender Group, the credit bid establishes a floor that potential third-party bidders must exceed. A credit bid sale can limit cash proceeds for junior creditors if the secured debt exceeds the business's enterprise value, because the lenders can exchange debt for ownership rather than provide cash for distributions.

A partial sale order was entered on August 20, 2025, approving the sale of certain assets. The broader sale process remained active into January 2026, when Del Monte Foods announced three successful bidders for substantially all of its businesses. Fresh Del Monte Produce was selected for the vegetable, tomato, and refrigerated fruit assets (including JOYBA and global Del Monte brand ownership subject to existing licensing), B&G Foods for the broth and stock business (College Inn and Kitchen Basics), and Pacific Coast Producers for the shelf-stable fruit business with rights to use the Del Monte and S&W brands for shelf-stable packaged ambient fruit and ambient fruit sauces in the U.S. (including Puerto Rico) and Mexico. The sale hearing is scheduled for January 28, 2026, with closing expected by the end of the first quarter of 2026.

Creditor Dynamics and Contested Matters

The Del Monte bankruptcy has generated litigation as various stakeholder groups contest treatment of their claims and contracts. Agricultural suppliers, minority secured lenders, and the unsecured creditors' committee have all challenged aspects of the sale process and contract assumptions.

Agricultural supplier disputes. Del Monte's business depends on relationships with agricultural suppliers who provide the raw produce—peaches, tomatoes, corn, peas, and other crops—that the company processes and cans. These suppliers commit to growing specific crops months or years in advance, making contract certainty important to their operations. Agricultural suppliers plant crops specifically contracted to Del Monte—crops that cannot be easily sold elsewhere if the contracts are rejected.

The bankruptcy has generated contested matters involving these relationships. Pacific Coast Producers and Morning Star Packing Company, two significant agricultural suppliers, filed a motion to compel on July 17, 2025—two weeks after the petition date—challenging the company's treatment of their supply contracts. With the 2025 pack season underway, the motion sought clarity on whether Del Monte would honor purchase commitments for crops already in the ground.

The disputes highlight tension between a debtor's need for flexibility to reject contracts and suppliers' need for planning. Agricultural suppliers cannot pause production while awaiting contract decisions—crops mature on fixed seasonal schedules. A rejected contract leaves a supplier with no buyer for highly perishable goods, while delayed assumption decisions prevent suppliers from planning future crop cycles.

Seneca Foods Corporation, another major supplier, filed its own motion to compel on October 27, 2025, invoking Bankruptcy Code sections 105(a) and 365(d)(2) to force a decision on its contracts. Section 365(d)(2) requires debtors to assume or reject unexpired leases of nonresidential real property within specified timeframes, and Seneca sought to apply similar urgency requirements to its supply agreements. Multiple additional parties filed objections to cure amounts and contract assignments in November 2025, creating a series of supply chain disputes that must be resolved for any sale to close.

Pack season criticality. Court filings identified the 2025 pack season as critical to preserving the company's going-concern value. The pack season typically runs from late summer through fall, when fruits and vegetables reach peak ripeness and must be processed quickly. Del Monte's canneries operate at high utilization during this period.

Minority secured lender opposition. An Ad Hoc Group of Minority Secured Lenders—separate from the term lender group serving as stalking horse—filed a motion on December 5, 2025, seeking an order adding them to the case to protect their interests. The court denied the minority lenders' motion on December 17, 2025.

Contract assumption objections. Beyond the supplier disputes, the estate faces a wave of objections to cure amounts and contract assignments filed in November 2025. These objections—documented in more than a dozen docket entries—represent counterparties challenging the amounts the debtors propose to pay to cure prepetition defaults as a condition to assuming contracts, or objecting to the proposed assignment of contracts to a purchaser. Resolving these objections is a prerequisite to closing a sale.

Official Committee of Unsecured Creditors

The U.S. Trustee appointed an Official Committee of Unsecured Creditors to represent the interests of trade creditors, vendors, and other unsecured claimants in the case. The UCC has taken an active role in monitoring the sale process and negotiating for recoveries for its constituency.

UCC professionals. The committee retained professional advisors to support its participation in the case.

Morrison & Foerster serves as lead counsel. The committee's investment banker, Miller Buckfire, provides valuation and transaction advice.

UCC activity. The committee has participated in sale process negotiations and filed objections to certain aspects of the sale motion. The committee is also participating in the mediation proceedings before Chief Judge Gravelle and has engaged in disputes with the debtors over contract assumptions.

Interim fee applications filed in December 2025 show the scope of professional activity. Morrison & Foerster requested compensation of $5,213,002.50 for work performed from July through October 2025. Committee financial advisor and investment banker fees are documented in separate fee applications.

Debtors' Professional Retentions

The debtors retained restructuring professionals to guide the sale process and chapter 11 administration.

Herbert Smith Freehills, formed through the 2022 merger of Herbert Smith Freehills and Kramer Levin, serves as lead restructuring counsel, coordinating the overall chapter 11 strategy and sale process.

Cole Schotz serves as New Jersey bankruptcy co-counsel.

PJT Partners is marketing the business and managing the sale process. The firm's role includes identifying potential bidders, negotiating transaction terms, and advising on valuation.

Alvarez & Marsal provides both financial advisory services and chief restructuring officer support to stabilize the business during the sale process.

The inclusion of Sycip Gorres Velayo & Co., a Philippines-based audit firm, reflects Del Monte Pacific Limited's ownership structure. The Philippines-listed parent company requires audit support that spans both U.S. and Asian operations.

Industry Context: Canned Foods

Del Monte's bankruptcy occurs amid broader industry trends in canned foods. Reporting on the case points to debt burden and declining canned food consumption.

Market dynamics. The global canned food market was valued at approximately $112.47 billion in 2024 and is projected to reach $158.70 billion by 2033, reflecting a compound annual growth rate of 3.9%. Market research identifies a growing consumer desire for fresh foods as an impediment to growth in developed markets, even as canned goods remain essential in regions with less developed cold chain infrastructure.

Industry analysts note that canned fruit and vegetable sales have declined globally between 2019 and 2024, even as fresh produce has grown in both value and units. The trend is most pronounced in developed markets where consumers have access to year-round fresh produce through modern supply chains and refrigeration.

The private label squeeze. Del Monte faces competition from private label products in canned goods. Major retailers including Walmart, Kroger, and Costco have expanded their store brand offerings, often pricing them 20-40% below national brands like Del Monte. When consumers do purchase canned goods, they increasingly reach for cheaper store brands rather than paying a premium for branded products.

Canned fruits and vegetables are often perceived as commodity products with limited differentiation. A can of Del Monte peaches is similar to a store brand equivalent in processing and sourcing, and the price gap can influence purchasing decisions. The brand premium has eroded as private label quality improved and price-conscious consumers saw less reason to pay more.

Consumer perception challenges. Industry observers note that consumers have become skeptical of processed and canned food, associating these products with preservatives, high sodium content, and reduced nutritional value. Del Monte's filing has been characterized as a watershed moment for the canned food industry.

The company launched Joyba bubble tea in 2021 and expanded its broth portfolio. While Joyba and broth products showed sales growth in fiscal 2024, these gains did not offset declines in canned fruits and vegetables that remain the company's largest revenue categories.

Distinction from Fresh Del Monte. An important clarification for industry observers: Del Monte Foods is not affiliated with Fresh Del Monte Produce, a separate publicly traded company that distributes fresh fruits and vegetables globally. The two companies share historical origins but have been distinct entities for decades. Fresh Del Monte Produce is unaffected by the Del Monte Foods bankruptcy filing.

Similarly, Del Monte Pacific Limited's international operations—including Del Monte Philippines—are not included in the U.S. chapter 11 proceedings. Only Del Monte Foods Corporation II Inc. and certain U.S. affiliates and subsidiaries filed for bankruptcy protection.

Leadership and Governance

Greg Longstreet has served as President and CEO of Del Monte Foods since 2017, with more than 30 years of food industry leadership experience. His background includes senior positions at Hormel Foods Corporation and Dole Food Company, and he previously served as President and CEO of both Farmer John Foods and CytoSport Inc., both Hormel subsidiaries.

Under Longstreet's leadership, the company pursued innovation initiatives including the Joyba bubble tea launch and expansion of the broth portfolio. In announcing the bankruptcy filing, Longstreet stated that after evaluating all available options, management determined a court-supervised sale process is the most effective way to accelerate the company's turnaround and create a stronger Del Monte Foods.

The company's board includes representatives of the parent company, Del Monte Pacific Limited, reflecting the ownership structure that has governed the U.S. business since the 2014 acquisition.

Key Timeline

Frequently Asked Questions

When did Del Monte Foods file for chapter 11 bankruptcy, and why?

Del Monte Foods filed chapter 11 in July 2025 after the 2014 acquisition by Del Monte Pacific Limited left the company with $1.245 billion in secured debt. As interest rates rose through the early 2020s, annual interest payments nearly doubled from $66 million to $125 million. Combined with declining consumer demand for canned foods, a 2024 debt restructuring effort, and new steel tariffs increasing production costs, the company filed for court protection.

Is Del Monte Foods still operating during bankruptcy?

Yes. The company continues normal operations, including the 2025 pack season when agricultural products are harvested and processed. The $912.5 million DIP financing provides liquidity to fund ongoing operations, pay suppliers, and maintain the workforce of approximately 2,780 employees.

Who is the stalking horse bidder?

The Ad Hoc Term Lender Group—prepetition secured creditors who also provided the DIP term loan—serves as the stalking horse bidder through a credit bid. This means they can bid the face value of their secured claims without requiring cash. The bidding procedures do not provide break-up fees, expense reimbursement, or topping fees.

What brands are included in the sale?

The sale process encompasses Del Monte Foods' entire portfolio: Del Monte canned fruits and vegetables, Contadina tomato products, College Inn and Kitchen Basics broths, S&W canned vegetables, Joyba bubble tea, and Take Root organics.

Is Fresh Del Monte Produce affected by this bankruptcy?

No. Fresh Del Monte Produce is a completely separate company that is not affiliated with Del Monte Foods. Despite sharing historical origins and brand elements, the two companies have been distinct entities for decades. Fresh Del Monte Produce, which distributes fresh fruits and vegetables, is unaffected by this filing.

Why are agricultural suppliers suing?

Pacific Coast Producers, Morning Star Packing Company, and Seneca Foods have filed motions regarding their supply contracts. Agricultural suppliers commit to growing specific crops months in advance and require certainty about whether their contracts will be assumed or rejected. The disputes reflect tension between the estate's need for flexibility and suppliers' need for operational planning.

What happened to the 2024 debt restructuring attempt?

Del Monte attempted a liability management exercise in 2024 that included a "drop-down transaction" transferring assets. Lenders challenged the transaction in court. The litigation settled in May 2025, and the resolution increased the company's interest expenses by $4 million annually.

How does the DIP financing work?

The $912.5 million DIP facility has two components: a $500 million ABL revolver for working capital and a $412.5 million term loan. Of the term loan, only $165 million is new money—the remaining $247.5 million is a "roll-up" converting prepetition secured debt into superpriority DIP debt. Interest on the term loan is primarily paid-in-kind at SOFR plus 9.50%.

Is Del Monte Pacific Limited affected by the U.S. bankruptcy?

Yes, as the parent company and equity owner of the U.S. debtors. However, Del Monte Pacific's international operations—including Del Monte Philippines—are not included in the chapter 11 proceedings. Only the U.S. entities filed for bankruptcy.

What is the expected timeline for resolution?

The case remains active with mediation ongoing before Chief Judge Gravelle and a settlement motion pending court approval. The court approved a January 12, 2026 Yakima facility sale, and the case timetable now depends on resolving intercreditor disputes, sale-related objections, and contract assumption issues. The DIP facilities mature nine months from the petition date, establishing a deadline for case resolution.

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