Fresh produce giant Fresh Del Monte strikes deal to enter high-value specialty ingredients

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Dive Brief:

• Fresh fruit and vegetable giant Fresh Del Monte is buying a majority stake in Avolio, Uganda's leading supplier of bulk crude and edible avocado oil, for an undisclosed amount.
• The Florida company said the purchase fits with its long-term strategy to grow its specialty ingredients and innovation business. In this case, Avolio will enable Fresh Del Monte to convert avocados into premium avocado oil. Avocados are one of the few fruits from which oil can be extracted from the pulp.
• The purchase places Fresh Del Monte in the fast-growing avocado oil segment. The ingredient is expected to grow to a $1.2 billion business by 2032 from $637 million a year ago, according to Fortune Business Insights.

Dive Insight:

Fresh Del Monte is best known for its bananas, pineapples and other fresh produce displayed in the grocery store. While the company remains committed to the business, it recently created a biomass and specialty ingredients division to transform agricultural byproducts to boost the company’s growth, enhance soil health and support human wellness.

“These efforts not only reinforce our environmental stewardship but also position us to compete in higher-margin categories that drive profitable growth and long-term shareholder value,” Fresh Del Monte Chairman and CEO Mohammad Abu-Ghazaleh said in a statement. “Acquiring Avolio is a strategic step aligned with our long-term vision to extract greater value across our supply chain while advancing our commitment to sustainability.”

During its 2024 fiscal year, Fresh Del Monte's net sales fell to $4.28 billion compared with $4.32 billion in the prior-year period. The decrease in net sales was primarily due to lower sales volume and per unit selling prices in bananas as well as the negative impact of exchange rate fluctuations. Bananas were responsible for about a third of the company’s net sales in 2024. 

The purchase of Avolio not only improves Fresh Del Monte’s environmental footprint and provides it with faster-growing channels to increase sales but also helps to further diversify the company’s business and minimize disruption in other parts of its operations.

Fresh Del Monte said Avolio’s extraction technology will be scaled to process 140 metric tons of avocados per day. It added that the technology, coupled with Fresh Del Monte’s extensive supply chain expertise “positions the two companies to lead the market in delivering high-quality, sustainable avocado oil solutions.”