Del Monte is seeing positive strides after purchasing Mann Packing Co. ( File photo )

Coral Gables, Fla.-based Fresh Del Monte Produce did roughly $1.11 billion in net sales in the first quarter, an increase of about 7% from the same period in 2017.

Chairman and CEO Mohammad Abu-Ghazaleh said on a May 1 earnings report conference call that he was pleased with the results but growth might have been even stronger.

“Several headwinds hindered our progress and adversely affected our performance throughout the quarter, including extreme winter weather events in North America and Central America that resulted in port closures, obstructed shipping and inland transportation and disrupted market activity,” Abu-Ghazaleh said. “We also encountered higher U.S. transportation costs, a reflection of the reduced capacity in the trucking industry, along with higher fuel costs.”

Banana sales for the quarter were $453.2 million, up about 2% from a year ago.

The “other fresh produce” segment added $573.9 million, up about 13% from last year. Within that group, fresh-cut sales increased 28% to $180.4 million, avocado sales increased 19% to $84.0 million, and vegetable sales increased from $6.7 million to $18.9 million.

The purchase of Salinas, Calif.-based Mann Packing has been a key factor, even before synergies between the company and Del Monte have been realized.

“The newly acquired company contributed $51 million in one month to our increase in net sales, driving strong growth in our fresh-cut product line as well as increased sales volume and selling prices in our vegetable product line,” Abu-Ghazaleh said. “The integration is going extremely well and we look forward to further positioning ourselves as the innovative leader in the vegetable category in North America.”

He added that Del Monte plans to introduce more value-added vegetable and prepared food products in the coming months, and the company is also open to acquisitions or joint ventures with organizations geared toward convenience, such as in the areas of e-commerce and meal kits.

Abu-Ghazaleh also noted the company has been investing in its avocado business, including the construction of packing facilities in Mexico. Del Monte is also working with growers in California and has planted some trees in Florida as well.

“We are very confident about our avocado business and going forward building our leading position there,” Abu-Ghazaleh said.

A large long-term investment coming up for the company is the purchase of six new fuel-efficient reefer container vessels, which will be delivered beginning in 2020.

Abu-Ghazaleh said the ships can last 50 years if maintained well, making them a smart alternative to leasing, which is an expensive undertaking.

“In a couple of years there will be new regulations and rules about fuel efficiency and fuel consumption,” Abu-Ghazaleh said. “The present ships that we have — all the market has — don’t meet these standards, and to convert them to these standards would take several million dollars for each ship.”

The six new ships will be for shipping to the East Coast.