Read on Twitter
The news that @DoleFoodCorp and @TotalProduceIRL are to merge is a really big deal for the global fresh produce business. So what better way to analyse its significance than a hastily composed thread, with added gifs to make it more, ahem, entertaining… /1
The first thing to note is… the new company (Dole) is going to be ENORMOUS. Just look at the numbers for Dole Food and TP combined: sales of almost $10 billion, assets worth $4.5bn, and total profit last year at nearly $380 million. Wow. /2
Some other numbers… TP is present in 26 countries, and has: 160 facilities (production, manufacturing, ripening, cold storage, packing & grading, distribution); 300+ product lines; customers in retail, wholesale and foodservice – primarily Europe and North America. /3
Dole is present in 4 countries, with 90+ facilities (production, manufacturing, packhouses, port operations, R&D), 105,000 acres of mainly farmland, 15 refrigerated ships, approx 16,400 reefer containers. Oh, and its brand is widely recognised among consumers. /4
To put that in perspective, Europe’s next-largest fresh produce generalist, Belgian firm Greenyard, chalked up sales of less than half that figure last year, and profit of less than a third. Another EU giant, Gruppo Orsero, has revenue of c.$1bn, about one-tenth of new Dole’s. /5
In the US itself, @DelMonteFresh generated sales of US4.5bn in 2019 (its 2020 figures are out next week) and operating income of US114m. Closer in terms of scale, but still not even half. @Chiquita, before it was sold to Cutrale-Safra had annual takings of around US$3bn. /6
As an aside, this underlines how well @ZespriCorporate is doing with its kiwifruit. Despite only selling one relatively niche category of fruit, it generated revenue of $2.24bn in 2020. Imagine if Dole could squeeze a quarter of its sales from that item alone. /7
And to put new Dole’s scale in an unnecessary but tenuously relevant context, $10bn would buy you roughly 55 billion bananas if you bought them all at Aldi. Although obviously they would then give you a discount. 
/8
/8
But seriously, this new Dole is a very big company indeed.
But not seriously, if Greenyard is Kevin de Bruyne, then new Dole is a cross between Roy Keane and Pele (I know, I know… but he is from the Americas, so work with me). /9
But not seriously, if Greenyard is Kevin de Bruyne, then new Dole is a cross between Roy Keane and Pele (I know, I know… but he is from the Americas, so work with me). /9
Back to serious analysis, this Dole Food-TP deal brings the prospect of a truly global fresh produce company much closer to a reality. Dole is big in North America and has a good footprint in Asia, while Total Produce is to Europe what Bono is to stadium rock music. /10
It’s true, we’ve almost been here before when it comes to creating a big European-North American produce business with those extra economies of scale. You may of course remember that Greenyard itself was poised to buy Dole Food back in late 2017. /11
Three years before , Cutrale’s shock purchase of Chiquita meant disappointment for @FyffesIrl, which wanted to seal its own $1bn merger with the US group. (Now I think of it, a Cutrale-Fyffes merger would really have suited my Keane-Pele analogy. But I digress again.) /12
In the end, the Greenyard-Dole Food merger fell through. It was a deal rumoured to be worth around $2.5bn including debt. Dole-TP is different for two main reasons. Also, the market context is a bit different, which I'll explain too. (Don't worry, nearly finished) /13
Firstly, TP-Dole is more than twice the size of that abandoned Greenyard-Dole merger, which would have created a global fruit and veg supplier-distributor with sales of around €4.25bn heading into 2018. /14
And secondly, it’s a merger of two publicly listed companies, so different in terms of how it's being funded. Plus new Dole's financial results will be published for all to see. /15
As for market context, well… it strikes me that having a global network is worth much more post-Covid than it was previously. Produce buyers cannot travel as much as they did before, so reliable service provision back along the chain is going to be worth more in future. /16
One last thought… This appears to be the final chapter in chairman David Murdock’s ownership of Dole Food. During his 36yr tenure, he privatised the group (2003), took it public (2009), privatised it again (2013), then sought a $100m IPO (2017) before selling 45% to TP. /17
TL;DR – The Dole-Total Produce merger creates a massive global supplier more than twice the size of any other comparable company in the fresh produce business.
Thanks for reading. Time for a lie down…
Thanks for reading. Time for a lie down…
