Dole Food Company, Inc.
     Annual Report 2001
Dole Worldwide Operations




                                                                    v
                      ...
Dole Financial Highlights

                                                                                               ...
The year 2001 will forever be imprinted on our minds and the minds of the
              world. The aftermath of the devast...
Dole Food Company Board of Directors
(Seated, right to left): David H. Murdock, Lawrence A. Kern
(Standing, right to left)...
In February 2001, Lawrence (Larry) A. Kern was        standing borrowings under the company’s $400
              appointed...
Encyclopedia of Foods: A Guide to Healthy Nutrition

  This book was prepared by medical and nutrition experts from the Ma...
Operational Review
              The year of 2001 was a year of change, challenge and achievement for the Dole
           ...
We recently finished the strategic and operational                                  charges from these programs were made ...
Dole Worldwide Product List
                                                                                              ...
Dole Fresh Fruit
Dole North America customers purchase more than eight million pounds of
Dole fresh fruit every day. Dole ...
Dole’s pineapple category grew in North America                               citrus imports enable us to offer an additio...
11
Dole Food Company, Inc. Annual Report 2001
Fact from Encyclopedia of Foods
                                                  Fruit is a valuable source of fiber, vit...
Dole Europe’s ripening and distribution activity           Latin America
reached almost $1 billion in revenue for 2001. Of...
Dole Fresh Vegetables
               In 2001, consumers purchased more Dole salads than any other brand. Dole’s
          ...
15
Dole Food Company, Inc. Annual Report 2001
Fact from Encyclopedia of Foods
                                                  Vegetables contribute significant amount...
the DOLE brand, the actual packaging is printed         In reference to food safety, The American Institute
with trilingua...
Dole Packaged Foods
               FRUIT BOWLS continued to achieve excellent market performance with a 40%
              ...
19
Dole Food Company, Inc. Annual Report 2001
Fact from Encyclopedia of Foods
                                                  When it comes to eating at home, your me...
expansion is being supported with television and           is less. In the last year, Dole has gained significant
radio ad...
Dole Fresh Flowers
               We anticipate enhanced distribution efficiencies in 2002 from our new 328,000
          ...
23
Dole Food Company, Inc. Annual Report 2001
Miami Facility Facts
                                                  Miami is the U.S. gateway for the floral industry, ...
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Dole 2001 Annual

  1. 1. Dole Food Company, Inc. Annual Report 2001
  2. 2. Dole Worldwide Operations v vv v v v v v v v v x Sourcing s Ripening/Distribution v Markets q Corporate x Food Operating Divisions Europe and Africa Belgium • Cameroon • Canary Islands • France • Germany • Ghana • Greece • Italy • Ivory Coast • Kenya Namibia • Netherlands • South Africa • Spain • Tunisia • Turkey • United Kingdom • Zimbabwe Latin America and Caribbean Bermuda • Chile • Colombia • Costa Rica • Ecuador • Guadeloupe • Guatemala • Honduras Jamaica • Martinique • Mexico • Peru Asia China • Japan • New Zealand • Philippines • Thailand North America Canada • United States: Arizona, California, Florida, Hawaii, Ohio, Washington Food Marketing Divisions Europe and Middle East Albania • Algeria • Austria • Azerbaijan • Bahrain • Belarus • Belgium Bosnia • Bulgaria • Croatia • Czech Republic • Denmark • Estonia • Egypt • Finland • France • Georgia • Germany Greece • Hungary • Iceland • India • Ireland • Israel • Italy • Jordan • Kazakhstan • Kuwait • Latvia • Lebanon • Lithuania Luxembourg • Malta • Morocco • Netherlands • Norway • Oman • Poland • Portugal • Qatar • Romania • Russia Saudi Arabia • Senegal • Slovakia • Spain • Sweden • Switzerland • Syria • Tajikistan • Tunisia • Turkey • Ukraine United Arab Emirates • United Kingdom • Uzbekistan Latin America and Caribbean Argentina • Chile • Colombia • Costa Rica • Dominican Republic • Ecuador • Guatemala Honduras • Mexico • Peru • Puerto Rico • Uruguay Asia China • Hong Kong • Japan • New Zealand • Philippines • South Korea • Thailand North America Canada • United States
  3. 3. Dole Financial Highlights 2001 2000 1999 1998 1997 (in millions, except per-share data) Revenue $ 4,449 $ 4,502 $ 4,543 $ 3,938 $ 3,852 Income (loss) from continuing operations $ (37) $ 36 $ 17 $ 1 $ 144 Income from discontinued operations 187 32 32 11 16 Net income 150 68 49 12 160 Diluted net income (loss) per common share Continuing operations $ (0.66) $ (0.65) $ 0.29 $ 0.02 $ 2.39 Discontinued operations 3.33 0.56 0.56 0.18 0.26 Net income 2.67 1.21 0.85 0.20 2.65 Diluted average common shares outstanding 56 56 57 60 60 Total assets $ 2,747 $ 2,801 $ 2,994 $ 2,864 $ 2,414 Capitalization Short-term debt $ 27 $ 45 $ 38 $ 36 $ 12 Long-term debt 816 1,135 1,285 1,116 755 Minority Interests 32 35 40 36 23 Common shareholders’ equity 736 555 532 622 666 Total Capitalization 1,611 1,770 1,895 1,810 1,456 Book value per common share $ 13.17 $ 9.93 $ 9.53 $ 10.49 $ 11.10 Common stock price: End of year 26.75 16.38 16.25 30.00 45.75 High 27.30 20.50 33.81 57.13 49.63 Low 14.72 11.94 13.81 28.31 33.38 Annual cash dividends per common share 0.40 0.40 0.40 0.40 0.40 NOTE: Loss from continuing operations for 2001 includes pre-tax charges of $133 million and a pre-tax non-operating gain of $8 million related to the sale of available-for-sale securities. Income from continuing operations for 2000 includes a pre-tax charge of $46 million, net insurance proceeds of $43 million and a pre-tax gain of $9 million related to assets sold. Income from continuing operations for 1999 includes a pre-tax charge of $48 million and net insurance proceeds of $20 million. Income from continuing operations for 1998 includes pre-tax charges of $98 million, net of $23 million of insurance proceeds. In 2001, Dole divested its Honduran Beverage operations. Operating results of this business have been accounted for as a discontinued operation. Income from discontinued operations in 2001 includes a net gain of $169 million on the disposition of this business. Income from discontinued operations in 1999 and 1998 includes net insurance proceeds of $8 million and a pre-tax charge of $22 million, respectively. 336 4,543 4,502 4,449 736 305 3,938 666 3,852 282 622 266 258 555 532 97 98 99 00 01 97 98 99 00 01 97 98 99 00 01 Revenue Cash Flow Shareholders’ Equity (in millions) (EBITDA* in millions) (in millions) s EBIT s Depreciation & Amortization *Continuing operations before one-time charges in 2001, 2000, 1999 and 1998, net insurance proceeds in 2000, 1999 and 1998, and net gains on assets sold in 2001 and 2000. 1 Dole Food Company, Inc. Annual Report 2001
  4. 4. The year 2001 will forever be imprinted on our minds and the minds of the world. The aftermath of the devastating terrorist attacks on the Pentagon and World Trade Center has heightened our sense of patriotism for all Americans who have so proudly united in support of our great nation. At Dole, our heart- felt compassion goes out to the families, friends and associates of those lost on September 11. To Our Shareholders: million from the divestiture of our Honduran Beverage business. These amounts also reflect The year 2001 marks Dole net income from discontinued operations (the Food Company’s 150th year Honduran Beverage business). On a continuing in business. The humble operations basis, full year 2001 net income was business partnership formed $79.4 million, or $1.41 per share. This represents by two missionaries in 1851, David H. Murdock an increase in net income from continuing opera- commenced as a general store Chairman of the Board and Chief Executive Officer tions of over 90% when compared to 2000 net in Hawaii, has become a income from continuing operations of $41.3 worldwide leader in the food industry with more million or 74 cents per share. than 59,000 employees in more than 90 countries. Full year 2001 earnings before interest, taxes, This past year, Dole embarked upon efforts to sig- depreciation and amortization (“EBITDA”) from nificantly reduce costs at all levels and to dispose continuing operations totaled $305 million com- of non-core and/or under-performing businesses. pared to $266 million for 2000. At the end of the The latter initiatives had begun in prior years, but year, net debt was $481.9 million, which is approx- 2001 was the year when significant accomplish- imately $670 million below net debt at the end of ments were made in these efforts and we fully 2000. The reduction in 2001 has come primarily expect that 2002 will be the year in which these from improved operating cash flows, enhanced efforts are completed. working capital management, and proceeds from Financial Results asset sales, primarily the Honduran Beverage oper- Revenues for 2001 of $4.5 billion were virtually ations. As a result, interest expense from continu- flat with 2000. Net income was $150.4 million or ing operations was reduced to $70.7 million versus $2.67 per share. These amounts reflect business $90.5 million for 2000. Capital spending for con- reconfiguration charges taken in the second and tinuing operations totaled $120 million versus third quarters totaling $122.1 million; a net gain $111 million for 2000. This included approximately on sale of marketable securities in the second $27.1 million for Dole’s new fresh-cut flowers quarter of $5.6 million; and a net gain of $168.6 distribution facility in Miami, Florida. 2 Dole Food Company, Inc. Annual Report 2001
  5. 5. Dole Food Company Board of Directors (Seated, right to left): David H. Murdock, Lawrence A. Kern (Standing, right to left): Zoltan Merszei, Lawrence M. Johnson, David A. DeLorenzo, E. Rolland Dickson, M.D., Mike Curb, Richard M. Ferry Divestiture of Honduran New Miami Facility Beverage Operations In December 2001, Dole’s Florida-based fresh-cut On November 28, 2001, Dole consummated the flowers distribution operation moved into a new divestiture of its 97% stake in the Cerveceria 328,000 square foot building. Approximately Hondureña S.A. beverage operations located in 200,000 square feet of this state-of-the-art facility Honduras through a stock exchange transaction is refrigerated. with a subsidiary of South African Breweries plc. Management Changes Subsequent to the stock exchange transaction, Dole Our 150-year history and strong foundation affords received $537 million of cash, which resulted in a Dole the ability of being able to draw from an net gain to the company of $168.6 million. The net experienced and competent management base. proceeds were immediately used to pay down debt. In 2001, we were able to promote and reposition The disposition of this business was in line with from within our ranks several members of senior Dole’s strategy of divesting itself of non-core assets. and middle management. We wish our long time Cerveceria Hondureña asso- ciates much success with South African Breweries. 3 Dole Food Company, Inc. Annual Report 2001
  6. 6. In February 2001, Lawrence (Larry) A. Kern was standing borrowings under the company’s $400 appointed President and Chief Operating Officer. million, five-year revolving credit facility were He was previously President of Dole’s highly repaid, primarily with proceeds from the disposi- successful Fresh Vegetables business where he tion of the Honduran Beverage business. As a pioneered its transformation from a commodity result, at year-end 2001, Dole’s reduced outstanding vegetables operation to a balanced business with a borrowings only consist of $775 million of long- strong value-added revenue base complemented term bonds and limited foreign borrowings. by a right-sized commodity vegetables operation. Outlook Eric M. Schwartz succeeded Mr. Kern as President Having completed major cost-cutting initiatives in of Dole Worldwide Fresh Vegetables. He was previ- 2001 coupled with the divestiture of major non- ously Senior Vice President of Operations at this core and under-performing assets during the year, division. Richard A. Harrah was appointed Dole will focus on expanding its core businesses in President of Dole’s Latin American production key markets. In 2002, management will continue operations. He was previously Vice President of to dedicate efforts to completing the divestiture of Operations at Dole Fresh Flowers. Prior to joining a few remaining non-core and under-performing Dole, he had extensive experience in the banana businesses but these efforts are largely behind us. industry, serving in senior executive capacities in As there can be no substitute for being the low the food industry. Scott Greenwood was appointed cost provider to our markets, we will maintain our President of Dole’s Fresh Flowers division. He focus on achieving a reduced cost structure. We was previously Vice President of Sales for Dole will also seek new opportunities both internally Packaged Foods. Michael J. Cavallero was promoted and externally to expand our product offerings to President of Dole North American Tropical and grow our revenue base. We begin 2002 with Fresh Fruit, previously serving that division as confidence in our abilities to profitably grow our Vice President of Sales and Marketing. core businesses while maintaining genuine con- During 2001, David DeLorenzo retired as Vice cern for the well-being of our people and the Chairman, having served the company in various consumer. Our realigned management team is executive capacities for 31 years. His knowledge, prepared for these challenges. loyalty, dedication and integrity were instrumental We would like to express our gratitude to our in making Dole a global leader in the industry. employees, shareholders and customers for their Mr. DeLorenzo will continue to serve as a member continued support and confidence. of the Board of Directors. Sincerely, Financing Activities In August 2001, Dole renewed its 364-day revolv- David H. Murdock ing credit facility for $200 million. Agents in the facility are Bank of America and the Bank of Nova Scotia. There have been no borrowings under this Chairman and Chief Executive Officer facility. Toward the end of 2001, all of the out- 4 Dole Food Company, Inc. Annual Report 2001
  7. 7. Encyclopedia of Foods: A Guide to Healthy Nutrition This book was prepared by medical and nutrition experts from the Mayo Clinic, University of California Los Angeles and the Dole Food Company, Inc. The Encyclopedia of An invaluable resource for linking food and Foods: A Guide to health, key features include: Healthy Nutrition • Narrative of the food groups – fruits, vegetables, is a beautifully grains, high-protein foods, dairy foods, herbs, photographed and spices, beverages, fats, oils and sweeteners. illustrated 500-page • Overview of the basic principles of nutrition, book that is part of recommendations for nutrient intake, the role Dole’s ongoing effort of each nutrient and the US Dietary Guidelines to promote healthy, for Americans and how it translates into healthy nutritious foods and food selections. lifestyles. The definitive resource on what to eat for maximum health, the Encyclopedia provides • Creative ways to select, plan and prepare health- an overview of the principles of nutrition. The ful meals, including two weeks of nutritionally foods that we eat play a major role in the prevention balanced menus and ways to modify favorite and treatment of coronary artery disease, cancer, family recipes to be healthful and delicious. stroke and diabetes, the four leading causes of • Information on supplements, antioxidants, death in the United States. The role of nutrition in phytochemicals, functional foods and new other common medical conditions such as obesity, food technology. high blood pressure and osteoporosis is discussed. To order on-line, please go to www.dole.com. The Encyclopedia stresses and illustrates the The Encyclopedia of Foods: A Guide to Healthy importance of the Food Guide Pyramid, health Nutrition is available for $19.95, plus $3.00 implications of the various food groups as well as shipping and handling per book. nutrient contents, history and recommended uses. Exercise for Health Healthy Prepared Meals Fiber and Vitamin Sources Food-Health Connection 5 Dole Food Company, Inc. Annual Report 2001
  8. 8. Operational Review The year of 2001 was a year of change, challenge and achievement for the Dole Food Company as we transformed into a more sales and marketing driven company. We look to our key customers and vendors to be our strategic business partners. During the year 2001, operat- of asset sales and business shutdowns, which ing management made sig- accounted for approximately $140 million of nificant strides in transform- revenues in 2000 that were not realized in 2001. ing the Dole Food Company The weak euro and yen to US dollar exchange rates from a production driven negatively impacted revenues by approximately company into a sales and $85 million. Additional offsets included reductions Lawrence A. Kern market driven one. This was in our banana volumes to unprofitable markets in President and Chief Operating Officer accomplished by undertaking Eastern Europe and lower year-over-year pricing in a review of our current customer base and focusing our commodity vegetables business. only on those that were deemed to be strategically Earnings before interest and taxes (“EBIT”) from important and profitable business partners. This continuing operations was $187 million, versus effort was further supported by a review of our $141 million for 2000. Improved EBIT in the markets and the businesses in those markets, company’s fresh fruit segment, primarily due to which resulted in our initiating steps to exit higher banana and fresh pineapple profits in markets and businesses determined to be non-core North America and Europe, was slightly offset by or under-performing. In addition, we focused on losses in the California deciduous and Northwest dramatically reducing our costs worldwide. apples businesses, which the company is exiting. As a result of these initiatives, total worldwide EBIT was also higher in the company’s fresh veg- revenues of $4.45 billion for 2001 were essentially etables segment as a result of category growth for even with 2000. Revenues for 2001 were signifi- packaged salads which offset lower commodity cantly higher in most of our core businesses pri- vegetables pricing, and in the packaged foods marily as a result of higher volumes and prices for segment as a result of increased FRUIT BOWL North American bananas, higher volumes and and FRUIT-N-GEL BOWL sales volumes and prices for our Premium Select pineapple in North lower production costs. Earnings were lower in America and Europe, increased volumes for our the fresh-cut flowers segment, due to unfavorable North American packaged salads business consis- market conditions, which resulted in lower sales tent with category growth, and increased volumes volumes. Consulting fees relative to the cost BOWLS ® and FRUIT-N-GEL of our FRUIT savings programs implemented during the year BOWLS™ in North America. However, these served as a one-time partial offset to EBIT growth. increases were offset by the impact on revenues 6 Dole Food Company, Inc. Annual Report 2001
  9. 9. We recently finished the strategic and operational charges from these programs were made in the reviews of our North American banana and fresh- fourth quarter and we expect that there will be no cut flowers businesses, and have begun to imple- further significant charges associated with these ment changes. We completed the reviews of our programs in the future. European, Latin American and Asian banana Of the $93 million in 2001 profit improvement, operations some time ago, and implementation of approximately $25 million dropped through to process enhancements are well on their way. Our pre-tax income. The offsets of approximately strategic sourcing and logistics and distribution $68 million were mainly from the impact of lower analyses are also complete and implementation is pricing for commodity vegetables, reduced sales nearing completion. To date, we have identified volumes for fresh-cut flowers, the effect of foreign 100% of our goal of $200 million of annual currency exchange, primarily from the yen, the improvements to future operating results that absence of earnings from the Honduran Beverage should be realized on a steady state basis by 2003. business and consulting costs associated with the These programs contributed approximately $93 strategic and operational reviews of our businesses. million of pre-tax operating earnings, before off- The non-recurring portion of these offsets was sets, during 2001. These programs also resulted in approximately $13 million. Therefore, excluding $28 million of one-time pre-tax charges to income the non-recurring offsets, about 40 percent of the in the second quarter and $105 million of pre-tax profit improvements added to pre-tax profit for 2001. charges in the third quarter of 2001. No additional Dole is the world’s largest producer and marketer of high-quality fresh fruit, fresh vegetables and fresh-cut flowers, and markets a growing line of packaged foods. 7 Dole Food Company, Inc. Annual Report 2001
  10. 10. Dole Worldwide Product List Dole Red Papaya Chunks Dole Mango Cubes Dole Kiwi Dole Fresh Vegetables Pascual Hermanos in Light Syrup Snack Cup Dole Mangoes Dole Artichokes Dole Santa (Grape) Tomatoes Dole Tomato Sauce Dole Mango Juice Drink Dole Morado Banana Dole Asparagus Dole Cherry Tomatoes Dole Tropical Fruit Cocktail Dole Mango Slices in Dole Native Banana Dole Bell Peppers Dole On-Vine Tomatoes in Juice and Syrup Blended Juice or Syrup Dole Nectarines Dole Broccoli Dole Plum Tomatoes Dole Tropical Fruit Cocktail Dole Mushroom Dole Oranges Dole Brussels Sprouts Dole Little Gem Baby Lettuce in Syrup with Passion Dole Nata de Coco in Syrup Dole Organic Bananas Dole Butter Lettuce Dole Rucola Salad Fruit Juice Dole Nata de Coco Dole Peaches Dole Carrots Dole Mini Leaf Salad Dole Tropical Fruit Juice Box with Jackfruit Snack Cup Dole Pears Dole Cauliflower Dole Spring Onions Dole Tropical Fruit Salad Dole Papaya in Syrup Dole Pineapple Dole Celery Dole Tropical Fruit Salad, Dole Peach Halves in Syrup Dole Fresh-Cut Dole Cilantro Dole Dried Fruit & Nut Easy Open Dole Peach Slices - Easy Open Pineapple Chunks Dole Dry Onions Dole Dates Chopped in Dole Tropical-Pineapple Dole Peach Snack Cup Dole Fresh-Cut Dole Green Leaf Lettuce Resealable Bags Juice Blend Dole Peaches in Juice Pineapple Spears Dole Green Onions Dole CinnaRaisins® in Dole White Asparagus and Syrup Dole Fresh-Cut Dole Iceberg Lettuce Resealable Bags Dole Yellow Papaya Chunks Dole Pear Snack Cup Pineapple Cylinders Dole Idaho Potatoes Dole Golden Seedless Raisins in Syrup Dole Pears in Juice and Syrup Dole Plantains Dole Radishes Dole Dates Pitted in Seasons Pineapple Juice Dole Pine Orange Banana Dole Plums Dole Red Leaf Lettuce Resealable Bags Seasons Tropical Fruit Mix Juice Dole Pomegranates Dole Romaine Lettuce Dole Pitted Prunes Canister Dole Pineapple Chunks Dole Strawberries Dole Sugar Peas Dole Pitted Prunes in Dole Fresh Flowers in Juice or Syrup Dole Super Sweet Banana Resealable Bags Achillea Dole Pineapple Concentrate Dole Yucca Dole Fresh-Cut Vegetables Dole Seedless Raisins Canister Alstroemeria Dole Pineapple Cubes Dole All American Salad Kit Dole Seedless Raisins in Aster Butterfly in Syrup Dole Packaged Foods Dole American Salad Blend Resealable Bags Aster Matsumoto Dole Pineapple Fun Shapes® Dole Aloe Vera (Solid) Dole Chopped Romaine Salad Dole Seedless Raisins Aster Montecasino – Cosmic Dole Apricot Halves Dole Classic Cole Slaw Mini Snacks Bouvardia Dole Pineapple Fun Shapes Dole Apricot Snack Cup Dole Classic Greek Salad Kit Dole Seedless Raisins Bupleurum – Sea Creatures Dole Apricots in Juice Dole Classic Iceberg Salad Six Packs Campanulas Dole Pineapple Grapefruit or Syrup Dole Classic Romaine Salad Carnations Juice Drink Dole Crushed Pineapple Dole Caesar Salad Kit Saman Chinese Carnations Dole Pineapple Juice in Juice or Syrup Dole Light Caesar Salad Kit Dole Golden Raisins Cremons Dole Frozen Pineapple Juice Dole Dates Dole Creamy Garlic Caesar Dole Mixed Fruit & Nut Delphinium Dole Pineapple Juice Drink Dole Deciduous Fruit Salad Kit Dole Pitted Prunes Farm Bouquets Dole Pineapple Lychee Cocktail in Juice and Syrup Dole Romano Salad Kit Dole Soft Apricots Football Mums Juice Drink Dole Fruit Bowls® – Peaches Dole Sunflower Ranch Eat Me Dried Apricots Freesia Dole Pineapple Mandarin Dole Fruit Bowls – Mixed Salad Kit Eat Me Dried Figs Gerbera Orange Banana Juice Fruit Dole European Salad Blend Eat Me Pitted Prunes Gerspider Dole Pineapple Orange Juice Dole Fruit Bowls – Pineapple Dole French Salad Blend Eat Me Whole Dates Godetias Dole Pineapple Orange Dole Fruit Bowls – Tropical Dole Greener Selection® Soelia Almonds Gypsophila Juice Box Fruit Salad Soelia Dried Apricots Kangaroo Paws Dole Pineapple Orange Dole Fruit Bowls – Mandarin Dole Hearts of Romaine Soelia Dried Figs Leatherleaf Juice Drink Orange Segments Mix Salad Blend Soelia Hazelnuts Limonium Dole Pineapple Orange Dole Fruit Festival Snack Cup Dole Italian Salad Blend Soelia JA Whole Dates Lisianthus Raspberry Juice Box Dole Fruit-N-Gel Bowls™ Dole Just Lettuce™ Salad Soelia Pine Nuts Micro Pompons Dole Pineapple Orange Pineapple in Lime Gel Dole Leafy Romaine Soelia Pistachios Million Stars Gypsophila Strawberry Juice Dole Fruit-N-Gel Bowls Salad Blend Soelia Pitted Dates Miniature Carnations Dole Pineapple Slices Mandarin Orange in Dole Mediterranean Soelia Pitted Prunes Monk’s Hood in Juice or Syrup Orange Gel Salad Blend Soelia Prunes Mums Dole Pineapple Snack Cup Dole Fruit-N-Gel Bowls Dole Mediterranean Salad Kit Soelia Soft Apricots Pompons Dole Pineapple Snack Peaches in Strawberry Gel Dole Organic Baby Lettuces Soelia Soft Figs Roses (Hybrid Tea) Wedges, Easy Open Dole FruiTango™ Mandarin Dole Organic Baby Spinach Soelia Walnuts Roses (Micro) Dole Pineapple Strawberry Dole FruiTango Pineapple Dole Organic Hearts of Soelia Whole Nuts Rover Mums - Fall only Juice Drink Dole FruiTango Strawberry Romaine Mix Snapdragons Dole Pineapple Tidbits Dole FruiTango Tropical Dole Organic Spring Mix Dole Fresh Fruit Solidago for Pizza Dole Guava Halves with Herbs Dole Apples Solidaster Dole Pineapple Tidbits Dole Guava in Syrup Dole Peeled Mini-Carrots Dole Apricots Spider Mums in Juice Dole Longans in Syrup Dole Shredded Carrots Dole Avocado Spray Roses Dole Pouch – Pineapple Dole Longans Snack Cup Dole Shredded Lettuce Dole Bananas Statice Tidbits in Syrup Dole Lychees in Syrup Dole Shredded Red Cabbage Dole Banana Puree Stock Dole Prunes Dole Lychees Snack Cup Dole Spring Mix Salad Blend Dole Cantaloupe Sunflowers Dole Raisins Dole Mandarin Orange Dole Triple Cheese Salad Kit Dole Cherries Sweetheart Roses Dole Rambutan in Syrup Fruit Cups Dole (Tuscany) Butter Dole Clementines Tree Fern Dole Rambutan Snack Cup Dole Mandarin Orange Lettuce Salad Blend Dole Coconuts Yarrow Dole Rambutan with Segments Dole (Verona) Field Greens Dole Cranberries Pineapple Snack Cup Dole Mandarin Orange Salad Blend Dole Grapefruit Segments, Easy Open Dole Very Veggie™ Salad Blend Dole Grapes Dole Honeydew Melon 8 Dole Food Company, Inc. Annual Report 2001
  11. 11. Dole Fresh Fruit Dole North America customers purchase more than eight million pounds of Dole fresh fruit every day. Dole is the industry leader in growing, sourcing, shipping and distribution of high-quality consistent product. North America Although our food service airline business was some- what affected by the September 11 tragedy, we were During 2001, still able to expand our bananas into new outlets. We Dole bananas, feel our success in the food service arena has much to already the num- do with our innovative packaging designs that meet ber one banana the needs of food service accounts. brand in North America, continued to grow in market share. Our We continued to develop relationships with school experienced and knowledgeable sales team worked districts across the country, emphasizing Dole’s to solidify strong relationships with retail customers commitment to nutrition education and the 5 A and emphasized building new partnerships with Day message. While our new version of Dole’s wholesalers. In the produce industry in North 5 A Day nutrition education CD-ROM was get- America today, wholesale partners are key to our ting into classrooms, we were getting more Dole distribution and expansion into independent bananas onto school breakfast and lunch menus. markets and chains that do not have their own ripening facilities. In marketing, we continued to grow our brand through promotions like the Dole Banana Shuffle, In early 2001, we expanded our fresh fruit product tie-ins with major national brands and a sweep- line by introducing organic bananas under the stakes that sent the winners on a trip to the Williams DOLE brand. The introduction proved successful, World Classic Golf Tournament. In advertising, our as we have found that organic produce is a grow- focus is to reach consumers with a nutrition message ing category throughout North America. that also portrays our products as fun. Product Innovations Organic Bananas and Premium Select Pineapple – In 2001, Dole Fresh Fruit introduced DOLE branded organic bananas in North America. DOLE PREMIUM SELECT® Pineapples were introduced into the North American market after years of hard work by Dole’s research and development teams, whose exacting quality standards resulted in cultivation, growth and shipping practices, which have pro- vided Dole customers with the finest extra sweet pineapples available. 9 Dole Food Company, Inc. Annual Report 2001
  12. 12. Dole’s pineapple category grew in North America citrus imports enable us to offer an additional line over the past year. In Hawaii, Dole refocused on its of products to our customers through the summer core business of pineapples while other less prof- months. These programs nicely parallel with and itable product lines were eliminated to redirect add depth to our Chilean business and complement all resources toward expanding the category. Our our existing product line. We foresee continued other tropical product categories, such as melons growth opportunities in this area. as well as cranberries, continue to grow. Europe Dole’s North American deciduous program Dole Europe dramatically improved its revenue achieved record revenues and solidified the number and profit performance during 2001 through a one position in the market for the 2001 season. restructuring of its banana business that eliminated Dole improved its stone fruit market share one-third of its overhead, consolidated shipping considerably over the previous year, ranking as services and concentrated activities on servicing the market leader in Chilean stone fruit imports. supermarkets directly. This program complements Dole’s Chilean grape Dole Europe also introduced new banana packaging program, which is also number one in North presentations for “Baby Bananas” and “Gourmet America. Dole continues to import a full line of Bananas” as well as single finger displays for con- apples and pears from Chile and completed a very venience stores. Banana production and marketing successful introduction of DOLE branded avoca- has also been expanded to consider the growing dos into North America. demand for organically grown bananas. With these Dole’s South African import program is relatively new banana presentations, Dole Europe is working small but has an optimistic outlook for growth in with its retail partners to broaden product offer- the deciduous and citrus categories. South Africa ings in order to appeal to the increasing demands offers a full line of table grapes, including varieties of our consumers. that are new to our overall program. South African The Dole Colombia and Dole Chile (not pictured) are the largest all-refrigerated container vessels in the world. 10 Dole Food Company, Inc. Annual Report 2001
  13. 13. 11 Dole Food Company, Inc. Annual Report 2001
  14. 14. Fact from Encyclopedia of Foods Fruit is a valuable source of fiber, vitamin C, some of the B vitamins, vitamin A, and other antioxidants and phytonutri- ents. A diet that contains ample amounts of fruits and veg- etables is associated with a reduced risk for cancer. There is no evidence that mineral or vitamin supplements are better than obtaining nutrients though whole foods. 12 Dole Food Company, Inc. Annual Report 2001
  15. 15. Dole Europe’s ripening and distribution activity Latin America reached almost $1 billion in revenue for 2001. Of Banana industry volumes were down year over particular note, we have expanded our German year by about 5% due to cooler than normal distribution to the Berlin area to better service weather in South America, which contributed to rapidly expanding retailers in the new German overall better pricing in North America and capital, which may be the center of an expanded Europe. As part of Dole’s cost reduction and profit European Union. improvement strategy, it exited unprofitable mar- kets and, accordingly, adjusted its volume to meet A major concern to European consumers is food its core market requirements. Through increased safety. Following concerns about various contamina- ship utilization and higher productivity from its tion incidents, retailers are demanding strict suppli- own farms, delivered costs significantly improved er accountability. Dole is a leader in full traceability in 2001. Dole bananas are grown on 15,000 of its supply chain. For example, Dole South Africa hectares of Company owned farms and about has been recognized by some leading European 29,000 hectares of independent producers’ farms. retailers as a reliable supplier with systems in place to trace produce from the supermarket shelf back Dole’s new organic banana farm in Ecuador, to the tree or vine where it grew. Dole Europe is Nuevo Esperanza (New Hope), came into full expanding this capability throughout its businesses. production bringing to North America the highest Complete accountability for each product will pro- quality organic bananas available in the market. vide consumers with the comfort they desire. An independent grower program was also started in Peru to provide additional volume of high Dole Europe’s mission is one of service to its retail quality organic bananas. customers and satisfaction of consumer demand. Dole has expanded its Premium Select pineapple Asia operations in Latin America and now sources In Asia, Dole faced tough challenges due to weak from fully operational farms in Costa Rica, economic conditions in its primary markets and Ecuador and Honduras. the strength of the US dollar. In addition, the All of Dole’s Latin American farming operations Asian banana industry suffered from over-supply. became fully certified under an Environmental In order to address this situation, Dole Asia com- Management System to ISO 14001 international pleted a restructuring of its operations including standards. Certifications oversee compliance of reducing volumes from company as well as inde- applicable laws on worker safety and environmen- pendent grower farms, and downsizing adminis- tal protection by our farms and those of our inde- trative overhead. These steps have allowed Dole pendent growers. Asia to re-focus on its strategy of innovative agri- cultural excellence aligned with customer require- Over 22,000 Dole employees throughout Latin ments for high quality fresh fruits and vegetables. America are dedicated to bringing to market the Dole Asia is confident that the significant expan- highest quality and safest fresh fruit possible. sion of niche and value-added products form a solid foundation for future profitable growth. 13 Dole Food Company, Inc. Annual Report 2001
  16. 16. Dole Fresh Vegetables In 2001, consumers purchased more Dole salads than any other brand. Dole’s unit market share of the category was 37.3%. On average, consumers in the United States buy 1,166,000 bags of Dole salads every day. Earnings from Dole Fresh Vegetables also continued to lead the operations in fresh-cut salad category in new product introduc- tions. JUST LETTUCE™, a product containing a Dole’s fresh veg- etables segment mix of both iceberg and romaine lettuces, and were up due to Hearts of Romaine Mix, have quickly become two cost reduction of the most popular salads in the premium salad efforts and continued growth in revenues of the segments. New product development continues packaged salads business. Dole’s retail packaged to be a key driver in the growth of the segment, salads not only maintained a leading market accounting for over twenty percent of Dole’s share position, but growth exceeded that of this value-added volume growth year over year. category segment in the food industry. Dole Fresh In the international markets, Dole also began Vegetables continued to expand production and operation of its second green field production site distribution capabilities by completing significant in Scandinavia. Helsingborg, Sweden, is the home expansion projects in the Springfield, Ohio plant, of the second fresh-cut plant now in operation where a 30,000 square foot addition was added, which provides DOLE branded retail salad prod- and the Yuma, Arizona facilities, where a 70,000 ucts to the Sweden, Finland, and Denmark mar- square foot addition is being added. Dole’s Yuma kets. The plants were designed with the same production facility will transition from a five- stringent food safety requirements that were the month seasonal operation to a year-round produc- cornerstone of the North American facilities tion operation in the fall of 2002 to accommodate design. Making multiple markets possible under the growth. Hot New Products Salad Packages - Dole Fresh Vegetables led the category in new product intro- ductions in 2001. JUST LETTUCE, introduced in January, is a new variety of Premium Classics consisting of iceberg and romaine. It has become one of the most popular salads in the category. Hearts of Romaine Mix was rolled out in June, and quickly became one of our leading Salad Blends. 14 Dole Food Company, Inc. Annual Report 2001
  17. 17. 15 Dole Food Company, Inc. Annual Report 2001
  18. 18. Fact from Encyclopedia of Foods Vegetables contribute significant amounts of vitamins, minerals, soluble and insoluble fiber, and other phytonutri- ents to our diets. The goal is to have at least three servings of vegetables every day. Variety and different colors and kinds of vegetables are important. 16 Dole Food Company, Inc. Annual Report 2001
  19. 19. the DOLE brand, the actual packaging is printed In reference to food safety, The American Institute with trilingual instruction and labeling. Dole also of Baking, one of the nation’s leading independent announced and has made plans for the divestiture third party auditors for food safety practices, has of Pascual Hermanos, which is a commodity busi- again rated both Dole value-added year-round ness located in Spain. With the exception of a production facilities in California and Ohio as small citrus business, the divestiture plan calls for “Superior”, which is the highest rating possible. Pascual Hermanos to be sold as an operating entity. The Soledad plant initiated and completed a fif- teen-month study with the Food and Drug Offsetting improved results from packaged salads Administration on HACCP practices (Hazard in North America were divestiture costs relating Analysis of Critical Control Points for food safety) to the sale and or closure of non-performing for the processing of pre-cut vegetables. Originally businesses in the deciduous segment and lower developed by NASA, a HACCP program identifies commodity vegetable prices in North America. and eliminates any vectors of risk in a production Dole Fresh Vegetables ceased operations at its process so that food safety is proactive instead of Washington apple business. Most of the assets reactive. Examples that make up a HACCP pro- of the apple business have either been sold or gram include metal detectors on all production are currently under escrow. Dole Fresh Vegetables lines, stainless steel construction of equipment for has also divested most of the assets associated ease of cleaning, and a comprehensive and docu- with the California Deciduous business. mented daily sanitation program. The outcome of the study was that, through information sharing Although commodity pricing was very strong, and hands-on training with Dole Fresh Vegetables results were below the record levels realized in Quality Assurance personnel and FDA auditors, 2000. Cost reduction efforts in the commodity there is a better understanding of the unique business were aggressive and helped in part to pre-cut vegetable production process from both offset cost increases in land rents, fertilizers, and a company and a regulatory standpoint. energy costs. Energy cost increases and supply presented a significant challenge in 2001 and continue to be at the forefront of challenges ahead in the coming years. Fresh Vegetables’ commodity program was suc- cessful in obtaining marketing agreements leverag- ing the DOLE brand in other commodities such as potatoes. Dole Fresh Vegetables continues to offer premium quality commodity vegetables to the produce market, and is continuing to seek part- nerships that will expand our vegetable presence Dole prides itself on offering its customers and consumers the highest on the produce shelf. quality and widest variety of produce available in the market today. Its worldwide team of growers, packers, processors, shippers and employees is committed to consistently providing premium products, while protecting the environment in which its products are grown and processed. 17 Dole Food Company, Inc. Annual Report 2001
  20. 20. Dole Packaged Foods FRUIT BOWLS continued to achieve excellent market performance with a 40% market share for the year. Canned Pineapple and Pineapple Juice maintained historical market shares of 52% and 46%, respectively. Operating results canned pineapple is focused on teaching consumers in Dole’s pack- how to eat more nutritiously by using this product aged foods busi- in their everyday meals and snacks. Looking for- ness increased, ward to 2002, the Thai pineapple industry, which primarily due to supplies about one third of the world’s canned higher volumes pineapple, is moving into a short supply cycle. of new products and lower production costs in the However, with dual sourcing capability (Phil- company’s Asian processing plants. Our FRUIT ippines and Thailand), Dole is well supplied and BOWLS continued to achieve excellent market well positioned to gain market share. For canned performance with a 40% market share for the year. pineapple juice, the marketing effort is aimed at This was partly due to the successful launch of delivering the message that Dole is 100% juice Mandarin FRUIT BOWLS, which is now the and therefore a better-for-you alternative. number two item in this category, right behind To further boost Dole’s presence in the marketplace, Peaches. Additionally, the performance of our new a new product called 100% Juice FRUITANGO™ FRUIT-N-GEL BOWLS surpassed our expecta- is being expanded into retail markets. This is a line tions as well as exceeded those of our retailers. of single-serve, tropical juice blends in a “slim” Despite worldwide excess supply of pineapple and eight-ounce can, with four flavors: Pineapple, concentrate in 2001, and price competition, Dole Strawberry, Mandarin and Tropical. This product maintained its overall revenue and market posi- tested extremely well in the club store channel, tion in these businesses. The marketing effort for and has since been expanded nationally. The retail Hot New Products Fruit-N-Gel Bowls and FruiTango – The trend towards healthy snacking has created a huge opportunity for Dole FRUIT BOWLS. In an effort to keep up with this demand, Dole has quadrupled FRUIT BOWL capacity in the past two years. We are now able to produce almost 500 million Bowls annually, enough to provide two packages for every school age person in America. 18 Dole Food Company, Inc. Annual Report 2001
  21. 21. 19 Dole Food Company, Inc. Annual Report 2001
  22. 22. Fact from Encyclopedia of Foods When it comes to eating at home, your meals can only be as good as the food you have in your kitchen. Be sure you have plenty of fruits, vegetables, and whole grains on hand so you can translate your plan for healthful eating into enjoyable and nutritious meals. 20 Dole Food Company, Inc. Annual Report 2001
  23. 23. expansion is being supported with television and is less. In the last year, Dole has gained significant radio advertising, as well as in-store and local market new distribution in the drug, convenience store programs. This product is also getting a good and mass merchandiser channels, and has become reception in the convenience store channel. an increasingly dominant presence in the club store snack cup business. Given the success of the FRUIT BOWLS franchise, six new items will be launched in the spring of Aside from FRUIT BOWLS, new product develop- 2002. Four of the items are single-serve and come ment efforts are underway for other value-added with a fork, for on-the-go consumption. These are packaging formats. A multi-serve, resealable plastic larger than the regular FRUIT BOWLS because bottle is being tested in a limited number of retail they are targeted specifically towards adults. The channels, and a multi-serve pouch is being tested four flavors are: Peaches, Pineapple, Mandarin in the foodservice sector. This packaging is intended Orange and Tropical Fruit. These products are to deliver fruit to the end user in more convenient expected to be particularly popular in convenience and user-friendly ways, so as to increase overall stores. The other two items are reduced sugar fruit consumption. FRUIT-N-GEL BOWLS. These two products have one-third less calories than regular FRUIT-N-GEL BOWLS and come in the four-pack, four-ounce cup format. The two flavors are: Pears in Kiwi- Berry Gel, and Papaya in Peach Gel. These product launches are supported by television advertising, consumer promotion and public relations pro- grams. In addition, significant resources have been applied towards developing the next generation of FRUIT BOWLS products. With continued increasing demand for FRUIT BOWLS, Dole is making additional investments Modern technology and a dedicated team of more than 6,000 employees at Dole’s Thailand canneries assure consistent quality and taste. in its Asian canneries. These investments will go toward state-of-the-art production equipment that will ensure Dole’s position as industry innovator and low cost producer. Dole is now packing as many plastic cups as traditional cans. With a broader line of convenience-oriented prod- ucts, Dole is gaining expanded distribution in non-grocery channels. This is important because they are growing faster than the grocery channel, some of the largest U.S. retailers are in these channels and the costs of gaining new distribution in them 21 Dole Food Company, Inc. Annual Report 2001
  24. 24. Dole Fresh Flowers We anticipate enhanced distribution efficiencies in 2002 from our new 328,000 square foot facility in Miami, Florida. Previously housed in seven separate buildings, operations are now consolidated. We were some- unique merchandising room showcases Dole’s 820 what disappoint- varieties of fresh-cut flowers, including 170 vari- ed with the per- eties of roses, to prospective customers. Also, a formance of our modern technical laboratory allows for continual fresh-cut flowers floral research and development. The consolida- segment during tion of operations from up to seven buildings at the year, where we continued to experience inte- peak holiday periods into one state-of-the-art gration challenges and unfavorable market condi- facility will streamline the handling of flowers tions. These have slowed our progress in reposi- from production to distribution to receipt by our tioning this business. We are looking forward to customers. This will significantly improve cold- enhanced distribution efficiencies from our chain management and tighten inventory control Miami, Florida-based operations, which were and handling of product resulting in reduced recently relocated into a new combined world- shrink costs and improved flower quality. wide divisional headquarters facility. Within the facility, over 200,000 square feet is This new 328,000 square foot facility centralizes refrigerated by a glycol ammonia system. This production, warehousing and shipping opera- system can control the variability in temperature tions, in addition to housing sales, marketing within one-half degree, which has been proven and administrative offices. Located on 17 acres to increase the vase life of fresh-cut flowers. This in International Corporate Park, the new facility expansive refrigerated space allows for no inter- began operations on December 17, 2001 with ruption in the cold chain, ensuring top quality 300 employees, and will operate year-round. A products to the customer. A receiving area of Our Top Sellers Dole Fresh Flowers is the largest rose importer of Colombia’s flowers and the only importer with guaranteed daily deliveries by air. Immediately after har- vesting, DOLE flowers are flown to the new Miami facility where tempera- tures are maintained within one-half degree of required levels in all warehouse and production operations. Maintaining the cold chain enables Dole to deliver the freshest and healthiest flowers to the market. 22 Dole Food Company, Inc. Annual Report 2001
  25. 25. 23 Dole Food Company, Inc. Annual Report 2001
  26. 26. Miami Facility Facts Miami is the U.S. gateway for the floral industry, since the majority of flowers for commercial use are grown in South America. Dole Fresh Flowers grows its product on nearly 20 farms throughout Colombia, Ecuador and Mexico. Nearly three mil- lion stems of flowers pass through Dole’s new Miami facility every day during the holiday season. 24 Dole Food Company, Inc. Annual Report 2001

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