Dive Brief:
- Pilgrim's Pride reported a jump of 53% in its second quarter earnings, rising to $233.6 million, up from $152.9 million in the year-ago period, according to a company release.
- The poultry producer saw revenue rise to $2.25 billion from $2.03 billion in the second quarter of 2016.
- “Our Q2 results materially improved from last quarter as well as from a year ago driven by much stronger results at our U.S. operations while Mexico continued to perform very well," Bill Lovette, the company's chief executive, said in a statement. "Demonstrating the diversity of our portfolio of bird sizes; while small bird and tray-pack remained robust during the period, our team captured the strength in the large bird deboning environment, which significantly rebounded after a slower than expected start earlier in the year, driven by stronger exports and very good domestic demand as the grilling season kicked off."
Dive Insight:
Pilgrim's Pride continues to perform well in U.S. markets despite the corruption scandal surrounding its parent company, Brazilian meat giant JBS. The company's latest earnings results reflect healthy growth, and it will be interesting to see how the poultry producer fares as it continues to adapt to industry trends. Last quarter, CEO Bill Lovette said Pilgrim's Pride will soon be a market leader in organic chicken, a lucrative value-added segment.
Pilgrim's Pride does not cater to consumer demand for slow-growing chickens, though many of its competitors are. At the Chicken Marketing Summit last month, Lovette said switching to slow-growing chickens would result in 35% fewer birds and would cost nearly 50% more due to additional needed water, manure and feed.
Still, Lovette urged poultry makers to boost their product transparency in order to eliminate consumer misconception of where their food comes from and how it is processed.
“More than half of U.S. consumers believe that large corporations own farms, when in reality 98% of U.S. farms are family-owned and 88% of those are small family farms,” he said at the summit.
This commitment to transparency, especially in relation to clear "no antibiotics ever" claims, could push Pilgrim's ahead of competitors. Four out of 10 consumers said they would switch to a brand that offered complete product transparency, according to a 2016 Label Insight study, and 94% of consumers said they would be loyal to a transparent brand.
The company's 2016 acquisition of GNP Company, a Midwest-based premium branded chicken provider, should also help Pilgrim's expand its antibiotic-free and organic lines of better-for-you-chicken products.