When Vivian Imerman, chairman and chief executive of canned fruit giant Del Monte, was a young man in his native Johannesburg he would spend his spare time with his friend Jack Fragis, who is now the company’s finance director.
Fragis says that if Imerman had a passion for anything, it was business. “We used to go and watch the rugby together. Vivian would talk about business and you’d think shut up and concentrate on the rugby for goodness sake,” he says.
Revelations in this week’s News of the World about Imerman’s personal life indicate his passions may go deeper than just business. But running Del Monte clearly takes up a lot of his time, and has done since he engineered a reverse takeover of the company in 1992.
Since that time, South Africa’s Apartheid system has collapsed, sanctions have been lifted and the European consumer boycott of South African produce has ended. Even so, Del Monte has struggled in Europe. In 1997, operating income for Del Monte Europe & International slumped to 7.9m (79mR) before exceptional items (namely a 45m restructuring) from 1996 operating income of 18.9m (189mR).
In a bid to lift the company – which has an international turnover of some 350m – out of this decline, Imerman has just agreed an $80m (50m) deal with Italian canner Cragnotti & Partners Capital Investment – owners of Cirio, a leading European brand of dairy and tomato products. Cragnotti has bought a 30.46 per cent share of Del Monte Royal Holdings from Anglo American Corporation (MW July 16).
Imerman claims the Cragnotti deal can bring down manufacturing costs and provide a useful base for European expansion. It is likely that Cirio products will be rebranded Del Monte and sold in the UK. This could lead to UK supermarket shelves bearing a range of Del Monte canned green vegetables within the next couple of years.
A deal-maker all his business life, Imerman says: “There are synergies in distribution and the plan is to leverage the Del Monte brand into new product development areas and to take advantage of the low-cost production and product range.”
The Del Monte brand has a high level of awareness among UK consumers – the company claims it is recognised by 96 per cent of shoppers in the UK (Millward Brown). This clout with consumers pales into insignificance against the might of the own-label market in the canned and bottled fruit sector. However, own label sales dropped 6.5 per cent to 76m for the year to June 14 1998 from 81m for the year to June 1997. Del Monte’s own sales slipped by 6.2 per cent to 26m from 28m the year (IRI Infoscan) but it is still streets ahead of the other brands. Rivals John West Foods, Princes, Dole and Haywards Food have combined total sales of 18m.
One industry insider says: “Del Monte is a much bigger brand than it is a business. For some time the company has been owned by people who are not marketers. Products cost about three times as much as own label in the UK and the Del Monte brand is not strong enough to overcome that.”
Product innovations from Del Monte have floundered over the past few years. It tried to get into the soft drinks market by testing Batik in 1996 and innovations such as Fruit Burst.
From a 5m-6m ad budget in 1993, Del Monte’s spend nose-dived to just 1.7m in the UK in 1997 (ACNielsen-MEAL). But the company has upped its spend to 2.5m in the UK alone this year for its first pan-European advertising campaign, which launched in March.
In the campaign, the grey bearded “man from Del Monte” has been replaced with a younger tanned version who still wears the colonial white suit and Panama hat. But the famous “the man from Del Monte says yes” line has been dropped in favour of the strapline of “You can tell its Del Monte”. The ads were created by Young & Rubicam, which was appointed to handle corporate brand advertising in 1993.
Del Monte has taken a fresh view of its marketing since calling in management consultants Bain & Co to carry out a review in 1996/7 and
Imerman based a 45m company-wide restruct-ure on the findings. This included plans to consolidate its UK and European marketing and sales operation.
Imerman says: “The study by Bain & Co showed that our marketing and advertising covered too many areas. We decided to concentrate our marketing efforts on our core products – pineapple and deciduous fruits like peaches, apricots and pears.”
Bain & Co is back at the company again carrying out a full study of the businesses with results expected in three to four months which will determine which brands will be launched in the UK.
A self-confessed entrepreneur and proud of it, Imerman has business in his blood. He states simply: “I am a classic entrepreneur.”
Entrepreneurial skills came into play when Imerman worked for his father’s business Lovasz – a chemical broking business. He travelled round factories with a “truck and a black guy” buying used chemicals from one factory and selling them onto the next at a profit.
“I have quite a cosmopolitan background and a natural flair for business. But it is bred into you – the harder you work the luckier you become,” says Imerman.
The high-point of his career was a deal which has been hailed as a “remarkable achievement” for Imerman. At the age of 37 he placed shares from food giant Royal Beech-Nut – which he had earlier acquired from Nabisco – with institutions to raise the necessary capital and joined forces with Anglo American to engineer a reverse takeover of Del Monte Foods International in 1992.
The deal was a triumph for Imerman because he managed to retain overall managerial control. It was unusual also in that Del Monte’s earnings were four times those of Royal.
Imerman is divorced with three children and lives in a house near Regent’s Park in London. He was listed as the 13th richest person in South Africa in the Financial Mail in the early Nineties. He still owns a third of the Del Monte group.
Observers say the Cragnotti deal should help Del Monte reach critical mass in Europe, and give it the expansion it needs.
One analyst says: “The logic of the deal seems to be there. Del Monte has found a European controlling operation to oversee the expansion of its business and harness it in a more focused way.”
Imerman thrives on big-time wheeling and dealing and he is determined to make more acquisitions and build the company organically. Fragis coins an American colloquialism: “He sees tuna where others only see sardines.”
But Imerman may be forced to cast his net wider as far as UK consumers – with their preference for either fresh fruit or cheaper own-label canned fruit – are concerned.