Sales of packaged salads continue to improve, according to Dole Food Co. Inc. president David DeLorenzo.
Sales of packaged salads continue to improve, according to Dole Food Co. Inc. president David DeLorenzo.

Expressing surprise at the interest from potential buyers, the president of Dole Food Co. Inc. says one possibility to boost stockholders’ returns would be to separate its packaged foods division and combine it with Dole operations in Asia.

President David DeLorenzo discussed the Asia option with stockholders, analysts and media during a conference call for the Westlake Village, Calif-based company’s second-quarter earnings report. The second quarter ended June 18.Dole fresh fruit sales drop; Asia spinoff considered

Talk of a spinoff became public during Dole’s first-quarter conference call. During both quarterly reports Dole officials stressed “enhancing shareholder value” as the primary motivation to split up the company.

Dole’s second-quarter earnings fell 21% compared to 2011, with the company’s biggest top-line generator — fresh fruit — logging an 18% sales decline. DeLorenzo and other Dole officials said that was primarily because of lower prices for bananas in North America.

Fresh vegetable sales, however, increased 11% during the second quarter compared to 2011. Packaged foods sales increased 7%.

Dole fresh fruit sales drop; Asia spinoff consideredPackaged salads are still in the good news column of Dole’s balance sheet. DeLorenzo said returns were up and costs were down for the packaged salads. To read the company second-quarter statement, visit:

Some of the low numbers for the second quarter can be attributed to one-time rollout advertising costs for the company’s Fruit Smoothie Shakers and Frozen Fruit Singles fruit cups, DeLorenzo said. The rollout is complete, so promotion costs should decline.

Financial analysts on the second-quarter conference call repeatedly asked about the status of Dole’s strategic review, announced during the first-quarter call.

DeLorenzo said Dole hired Deutsche Bank Securities Inc. and Wells Fargo Securities LLC to help review “strategic alternatives.” He said he is confident decisions will be made by the end of this year, though he said the review team is still in information-gathering mode.

Combining the packaged foods division with Dole’s Asia operations into a stand-alone entity could be done with an Asia-based company, DeLorenzo said. Another option would be to initiate a joint venture with third parties through an initial public offering.

“We have generated a lot of interest in Asia,” DeLorenzo said. “It is a high growth area for all our businesses. It is more stable than North America and Europe, possibly because it is more demand driven. …. It would make sense in many ways. About 90% of our packaged foods assets are in Asia and many of the products for them are sourced out of Asia.”