Dole 2001 Annual

Dole Food Company, Inc.
Annual Report 2001

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

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

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

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

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-


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5

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


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 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 Fruit Bowls – Mandarin
Dole Hearts of Romaine Soelia Dried Figs
Leatherleaf
Juice Drink
Orange Segments
Mix Salad Blend Soelia Hazelnuts
Limonium
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
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
Lettuce Salad Blend Dole Coconuts
Yarrow
Dole Rambutan with
Segments
Dole (Verona) Field Greens Dole Cranberries
Pineapple Snack Cup
Salad Blend Dole Grapefruit
Segments, Easy Open
Dole Very Veggie™ Salad Blend Dole Grapes
Dole Honeydew Melon


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’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.


11

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.


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 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.


15

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.


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 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.


19

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.


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 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.


23

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.


Dole 2001 Annual

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