Del Monte’s Bankruptcy Filing Reflects Cans, Costs and a Changing Grocery Aisle

After 139 years on U.S. grocery shelves, legacy canned-food brand Del Monte Foods has filed for Chapter 11 bankruptcy protection, citing a mix of long-term structural pressures and more recent cost shocks.

In a July 2025 announcement, the Walnut Creek, California–based company said it had entered into a restructuring support agreement with key lenders, and secured $912.5 million in debtor-in-possession financing to allow it to keep operating while pursuing a sale of its assets under court supervision.

Shrinking Demand for Canned Food
At the heart of Del Monte’s struggles lies a severe drop in demand for its core canned-fruits and vegetables business. The company, which also owns brands such as Contadina (tomato products), Kitchen Basics and College Inn (broths), and Joyba (bubble tea) saw some growth in non-canned categories during 2024, but not enough to offset the slump in canned-food sales.

According to restructuring advisers, consumer tastes have shifted sharply away from “preservative-laden canned food” toward fresher alternatives. Meanwhile, inflation in grocery prices has pushed more shoppers toward lower-cost private-label products, intensifying the pain for mid-priced legacy brands like Del Monte. (The Economic Times)

Tariffs Drive Up Metal Packaging Costs
Even as demand shrank, Del Monte, like many canned-food makers was hit with sharply rising input costs. A key factor: new U.S. import tariffs on steel and aluminum that took effect in June 2025, increasing the cost of metal for cans. Company documents reveal that can-making and metal packaging alone added more than US$100 million in additional costs year-on-year, as part of a broader surge in inflation and supply-chain pressures. For a canned-food producer already suffering from flat or falling volumes, this kind of cost increase drastically shrinks margins. (delmontepacific.com)

Debt, Inventory & Financial Strain
Compounding the problem: Del Monte entered bankruptcy heavily leveraged. According to recent filings, the company carried approximately $1.3 billion in debt. (delmontepacific.com)

On top of that, demand spikes during the COVID-19 pandemic had led Del Monte to build up inventory; when demand normalized, the company was stuck with surplus stock. The costs of warehousing, discounting and write-offs further weighed on the bottom line. (100% American & Latino)

A Strategic Sale — and a Broader Industry Signal
In its bankruptcy filing, Del Monte says a court-supervised sale process is “the most effective way” to salvage the business and reposition it under new ownership. (PR Newswire)

Some observers see the move as more than just the end of a legacy — it may herald a broader reckoning in shelf-stable, center-of-aisle packaged food categories. As one trade outlet put it, Del Monte’s collapse highlights how vulnerable traditional canned-food producers are to volatile metal prices and rapidly shifting consumer tastes. If a buyer emerges and a leaner, restructured Del Monte re-emerges, the company will need to diversify beyond staples that once defined it. Analysts suggest future success will rely on expanding into fresh-food, beverages or more highly processed but trendy grocery items — categories where growth remains. (Retail Insider, Business Standard)

Why Tariffs Are More Than a Side Note
It might be tempting to view the tariffs on imported steel and aluminum as just another macroeconomic headwind, but for a canned-food producer whose packaging is almost entirely metal-based, they may have been a tipping point. The roughly 50% tariff effectively reshaped Del Monte’s cost structure overnight. Combined with falling demand, rising interest costs, and excess inventory burdens, the tariff-driven spike in can prices helped convert long-term structural challenges into an immediate solvency crisis. In short: Del Monte’s bankruptcy underscores how tariffs — when layered on top of industry transformation and prior financial weakness — can accelerate collapse in legacy goods businesses. For grocery retailers and packaged-food suppliers, the Del Monte filing may offer a warning shot: cost inflation and evolving consumer preferences can quickly make even iconic brands vulnerable.