“Staying Competitive and Implementing Food Processing By-Product Reuse Practices”

1. “Staying Competitive and Implementing Food Processing By-Product Reuse Practices” Presented by Jim Mortensen Del Monte Foods Modesto Plant

2. General Overview • Del Monte Food’s Modesto plant processes apricots, peaches, pears and fruit cocktail packed in cans, jars and plastic. • Del Monte Food’s Modesto plant: • employs 600 full time employees • employs 2,000 part time employees • expends $58 million in earnings and benefits. • Raw product costs exceed $87 million for over 150,000 tons of fresh fruit. • Packaging materials cost approximately $78 million. • The Modesto plant can produce 6 million containers per day at peak production. • Del Monte Food’s expends over $222 million per year in the region for goods, services and employment.

3. Processing Fruits and Vegetables • Raw product is received and unloaded, washed and introduced into the plant. • The fresh fruit is then washed, sized, cut, sorted, pitted, peeled, diced, sliced, filled into containers topped with syrup, sealed, cooked, labeled, cased, and palletized for shipment or storage. • Manufacturing 400,000 cases of product per day produces about 510 tons per day of by-product in the form of peach pits, fruit pieces, peels and fruit puree. • The by-product is taken to a spread and disc operation, spread on the fields, allowed to dry and disced into the soil.

4. Competition • As international subsidizes continue to rise, international market competition continues to put pressure on the United States food processors to stay competitive. • As new countries become more and more competitive, our plants continue to follow strict environmental guidelines that are not in place in other production countries. • Skilled labor at Del Monte Foods costs up to $30 per hour (including benefits) while an equivalent wage in third world country operation is $2 per day.

5. Competition Continued • Quality of product and productivity of processing are all that separate domestic from new international competitors. • Central Valley growers lead the world in farm management practices and innovation that produces superior agricultural commodities. • California processors use cutting edge technology and innovation to produce high quality products and high productivity rates. • Recycling food processing by-product back to farm for use as a soil amendment is one of the many innovations that growers and food processors have developed collaboratively.

6. Food Processing By-Product Recycling • A Program that Works! • Since the inception of the Stanislaus County Food Processing Residue Use program, Del Monte Foods has recycled by-product to local farms to be reused as feed supplement or as soil amendment. • As a fruit cannery up to 510 tons per day of fruit by-products are taken to a spread and disc operation to be used as a soil amendment or dried to be used as fuel. • There are no existing viable alternatives to the current food processing by-product recycling program given that the material is too wet for the landfill.

7. Conclusion From a Del Monte Food perspective this program is critical to our operation and keeping our company competitive.