Dole Food Company, Inc.

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Dole Food Company, Inc.

FOUNDED: 1851 as Castle & Cooke

Contact Information:

HEADQUARTERS: 31365 Oak Crest Dr.
Westlake Village, CA 91361
PHONE: (818)879-6600
FAX: (818)879-6618
URL: http://www.dole.com

OVERVIEW

Dole Food Company, Inc. is widely known as a pioneer in providing tropical fruit products to the United States. Since its founding in Hawaii in 1851 as Castle & Cooke, Dole (now headquartered in California) has grown into the world's largest grower and supplier of fresh fruits and vegetables. In addition to tropical fruits such as pineapples and bananas, Dole grows and distributes other fruits from apples to oranges, as well as over 20 vegetables. Dole claims to be the premier North American supplier of grapes, lettuce, celery, cauliflower, and dried fruits and nuts. Other Dole products include canned products, pre-packaged salads, and precut vegetables.

Dole products are sold throughout the United States and in over 90 other countries. Although Dole also operated other types of businesses, in the mid- and late 1990s it decided to refocus on its best-known food products. It sold its juice-producing operations, except for pineapple juice, to The Seagram Company in 1995, and in that year also spun off its real estate and resort operations in Hawaii to a separate company, Castle & Cooke. In 1997 Dole's sales were over $4.3 billion.

COMPANY FINANCES

Dole's sales figures from 1993 through 1997 show constant growth. According to the company's 1997 annual report, its sales were: $3.10 billion in 1993; $3.50 billion in 1994; $3.80 billion in 1995; $3.84 billion in 1996; and $4.30 billion in 1997. During these five years, Dole's net income doubled, from $78 million in 1993 to $160 million in 1997. (This figure doubled even though there was a $97-million loss in 1995 from the discontinued operations.)

HISTORY

The history of Dole Food Company, Inc. is actually the story of two companies whose paths crossed in Hawaii early in the twentieth century. Castle & Cooke had been founded by missionaries in 1851 to provide posts in that part of the world with staple items. Samuel Castle and Amos Cooke had formed an alliance to manage the church's depository. Seven years later they became agents for sugar concerns in Hawaii. As the nineteenth century brought growth and investors to Hawaii, Castle & Cooke eventually became a prosperous land development and real estate company.

Meanwhile, James Drummond Dole came to Hawaii in 1899, after graduating from Harvard. His cousin, Sanford B. Dole, was a politician who became governor of Hawaii, which had been recently acquired as a U.S. territory. He urged James to try to develop a commercial market for pineapple. James took his cousin's advice and bought 60 acres of land near Honolulu. James Dole built a cannery to process his fruit for shipping, and in 1903 his newly formed Hawaiian Pineapple Company successfully shipped and sold 2,000 cases of canned pineapple. Within only a few years, this number had jumped to 25,000 cases.

In its early years, Dole's company sold pineapple largely to the California region, and many people in the United States had never seen or tasted a pineapple. Dole began a national advertising campaign for his canned fruit, hoping to entice new customers by giving the canned fruit appealing brand names like "Ukulele." The company also employed a new advertising concept, publishing recipes in the newly popular "ladies' magazines." By the end of World War I, production had risen to a million cases of pineapple a year, and the Hawaiian Pineapple Company was a world leader in processing pineapple. In 1922 Dole bought the island of Lana'i and established a huge plantation. His company's biggest investor turned out to be Castle & Cooke, now a profitable land development firm that bought one-third of Dole's company.

Dole's company lost millions of dollars in the early 1930s. Castle & Cooke bought a controlling share of the Hawaiian Pineapple Company and, although Dole remained as chairman of the board until 1948, Castle & Cooke was in charge, and was responsible for restoring the company to financial health.

In 1961 Castle & Cooke purchased the remainder of the Hawaiian Pineapple Company. It also began expanding its operations beyond Hawaii, by establishing plantations in the Philippines to continue to supply markets with both pineapple and bananas. The banana business expanded further in 1964 with the purchase of Standard Fruit of New Orleans. Because the Dole brand was already well known to the public from sales of pineapple products, it was also added to new products. Television advertising became a key component of Castle & Cooke's marketing efforts. In the 1970s and 1980s the company emphasized the health benefits of its products. A huge media campaign in the early 1990s encouraged consumers to eat more fruits and vegetables, of course emphasizing pineapples.

However, the 1980s and early 1990s brought added financial difficulties to the company. Castle & Cooke was carrying a huge amount of debt, and it had to struggle through two unsuccessful takeover attempts in the mid-1980s. To protect itself, Castle & Cooke merged with Flexi-Van, a container leasing firm operated by David H. Murdock. Under Murdock's direction, the company was reduced to its most basic ventures: fruit and real estate. In 1991, Castle & Cooke changed its name to the Dole Food Company, Inc. Murdock unexpectedly announced that Dole would end its pineapple growing operations on Lana'i, and instead would develop resort properties there through its Castle & Cooke subsidiary.

In the mid-1990s Dole decided to expand its operations in many directions. In 1994 it acquired a share of Jamaica Fruit Distributors, bought Dromedary (the date company), and acquired Made in Nature, an organic produce and food supplier that at the time was the largest in that sector of the organic foods industry. Dole had hoped to capture a part of the organic food market, which was then posting double-digit growth each year. However, only a little over a year later, Dole decided to make another sharp change of direction. It sold Made in Nature back to its original owners, and spun off its Castle & Cooke real estate and resorts division to its shareholders in order to focus on its food-related businesses. Dole also finalized the sale of its global juice business to Seagram's Tropicana juice division. Dole retained its canned pineapple juice unit, entering into a long-term supply contract arrangement with Tropicana. This arrangement allowed Dole to keep active in the juice market, since pineapple juice is a base ingredient for many blended juices. In 1996 Dole expanded its juice operations once again, by purchasing the controlling share of Pascual Hermanos, Spain's leading citrus fruit and vegetable producer. It also decided to close its California dried fruit facility, which had suffered losses for a prolonged time.

STRATEGY

James Drummond Dole founded his company on a commitment to "quality, quality, and quality," as he said in the company's original statement of principles. Aside from this basic principle, Dole also has been perceptive in its choice of manufacturing and marketing techniques. In its early days Dole took advantage of new technology (fruit canning), which led to its initial success. In the mid-twentieth century, the company turned to another new form of technology, television advertising, to greatly increase its sales. Its advertising campaign of the early 1990s ("How'd You Do Your Dole Today?") capitalized on the growing public awareness of the need to eat more fruits and vegetables. Dole also repeatedly expanded its product line and then cut back to its basic operations in times of difficulty. International expansion also has played a key role in the company's operations, especially in the 1990s.

INFLUENCES

Previous efforts to ship fresh pineapple to the U.S. mainland from Hawaii had failed miserably, since the trip took weeks by boat and there was no way to refrigerate the fruit during the journey. However, James Dole decided to try a different approach, and built a cannery to process his fruit for shipping. In 1903 he successfully shipped and sold 2,000 cases of canned pineapple.

The combination of the Great Depression and the initial failure of a new product, pineapple juice, led to Dole losing millions of dollars in the early 1930s. Ironically, it was the initially unsuccessful pineapple juice that helped the company to recover. With the end of Prohibition, it advertised pineapple juice as a great mixer with liquor.

FAST FACTS: About Dole Food Company, Inc.

Ownership: Dole Food Company, Inc. is a publicly owned company traded on the New York Stock Exchange.

Ticker symbol: DOL

Officers: David H. Murdock, Chmn. & CEO, 74, $1,369,842; David A. DeLorenzo, Pres. & COO, 51, $823,231; Gregory L. Costley, Pres., Dole North America Fruit, 44

Employees: 44,000 worldwide

Principal Subsidiary Companies: Dole Food Company, Inc. operates numerous subsidiaries in Asia, Latin America, and Europe, as well as the United States, grouped as Dole Holdings, Inc., and Castle & Cooke Worldwide Limited. Its real estate and resort operations were spun off in 1995 as Castle & Cooke, Inc., and all of its juice operations (except pineapple juice) were sold to The Seagram Company Ltd. in the same year.

Chief Competitors: Dole Fruit Company, Inc.'s top competitors include: Chiquita Brands; Del Monte; and Tri Valley Growers.

CURRENT TRENDS

Dole has placed an increased emphasis on marketing a wide variety of products that are nutritious, tasty, and convenient. As of 1998 it sold more than 70 varieties of fruits and vegetables, as well as over 100 processed and packaged fruits, juices, and nuts. Dole recognized the consumer trend toward convenient packaged foods that also are healthy. To address this rapidly growing demand, it introduced a line of pre-cut vegetable and salad mixes. Following its rapid series of acquisitions and sales of operations in the mid-1990s, Dole seems to have regrouped itself around its founder James Drummond Dole's original statement of principles, a commitment to "quality, quality, and quality."

PRODUCTS

Produce under the Dole brand includes dried fruits and nuts (almonds, prunes, raisins, and packaged trail mixes); fresh fruits (bananas, pineapples, coconuts, stone and tree fruits, grapefruit, lemons, oranges, tangelos, tangerines, kiwifruit, pears, and raspberries); fresh vegetables (artichokes, asparagus, bell peppers, broccoli, carrots, lettuce, onions, peas, potatoes, and radishes); and packaged foods (canned fruits and vegetables, freshly cut packaged salad mixes, and other freshly-cut salad ingredients). The company also distributes date products under the Dromedary label.

CORPORATE CITIZENSHIP

Dole is a sponsor of the "Shark Shootout," an annual golf tournament held in California and hosted by golfer Greg "The Shark" Norman. Established in 1989, the tournament raises funds for children's charities. Dole also donates funds and products to community health-oriented programs, particularly in the area of nutrition education for children, and to food programs for the needy. It created the first CD-ROM multimedia program designed to teach elementary school students about nutrition, using characters such as Bobby Banana and Pamela Pineapple. In addition to its corporate web site, Dole also maintains a nutrition education web site, accessible at http://www.dole5aday.com.

GLOBAL PRESENCE

As of early 1998 Dole distributed its products in 90 countries. It maintained the position of industry leader within the United States, Canada, Mexico, and Japan. However, in the 1990s significant expansion of the company's international operations took place. Key marketing efforts have been targeted at Europe (particularly eastern Europe), South Korea, Thailand, the Philippines, and the Middle East. In 1997 about 40 percent of Dole's sales (after accounting adjustments) were in North America; the remaining sales were divided almost equally among its Latin American, Asian, and European operations. Critics of the company have included labor and consumer groups that take issue with its international operations.

CHRONOLOGY: Key Dates for Dole Food Company, Inc.

1851:: Founded as Castle & Cooke in Hawaii
1899:: James Drummond Dole comes to Hawaii
1903:: James Dole forms the Hawaiian Pineapple Company
1922:: Dole buys the island of Lanai
1961:: Castle & Cooke purchases the rest of the Hawaiian Pineapple Co.
1964:: Purchases Standard Fruit of New Orleans
1989:: Establishes the "Shark Shootout"
1991:: Castle & Cooke changes its name to Dole Food Company Inc.
1994:: Dole acquires part of Jamaica Fruit Distributors, all of Made in Nature, and Dromedary
1995:: Sells juice-producing operations (except pineapple juice) to Seagram Company; sells Made in Nature
1996:: Purchases Pascual Hermanos
1998:: Dole distributes products in 90 countries

Because Dole maintains such a strong international presence, it is often subject to unanticipated changes in the laws, tariffs, and political conditions of the countries in which it does business. For instance, its banana sales in Europe have been significantly disrupted by the European Union's banana regulations, which were challenged by several countries (the United States, Ecuador, Mexico, Honduras, and Guatemala), but were still in effect in 1998. These regulations set up quotas and tariffs for bananas that are imported into Europe. The World Trade Organization issued a report in 1997 in response to complaints from countries outside of the European Union. It agreed that the regulations unfairly favor banana imports into Europe from countries in Africa and the Caribbean that used to be European colonies.

THE PINECONE FRUIT

The Dole Food Company got its start with pineapples, so it's no surprise that it's the top product sold by and closely associated with the company.

Originating in Central and South America, the pineapple got its name from Spanish explorers who called it "pina," which is Spanish for pinecone—the seed they thought the fruit resembled. The English later added "apple" to the word. In 1493, Christopher Columbus found pineapples in Guadeloupe and brought them back to Queen Isabella of Spain. They became popular in Europe and were even grown in seventeenth-century greenhouses.

Although pineapples grow in many tropical areas worldwide, most people associate pineapples with Hawaii, where they have been grown since the early 1800s. It is believed that Captain Cook may have brought the pineapple to Hawaii, or some were washed ashore from Spanish shipwrecks.

The pineapple is a good source of vitamin C and is also used as a symbol of welcome and hospitality in many areas of the world.

SOURCES OF INFORMATION

Bibliography

blamey, pamela. "seagram buys most dole juice units." supermarket news, 19 june 1995.

carlsen, clifford. "dole plucks marin organics giant; acquisition of made in nature plants seed for golden harvest." san francisco business times, 2 september 1994.

"dole food company." hoover's handbook of american business 1997. austin, tx: the reference press, 1996.

dole food company, inc. annual report. westlake village, ca: dole food company, inc., 1997.

"dole to spin off its real estate and resorts division to its shareholders." knight-ridder/tribune business news, 17 october 1995.

dubovoj, sina. "dole food company, inc." international directory of company histories, vol. 9. detroit, mi: st. james press, 1994.

"tropicana + dole = international no. 1." beverage world, june 1995.

For an annual report:

on the internet at: http://www.dole.comor write: office of the corporate secretary, dole food co., inc., 31365 oak crest dr., westlake village, ca 91361