Dive Brief:
- JBS said it would spend $100 million to buy and transform an Iowa facility into its largest bacon and sausage plant in the U.S.
- The company acquired a 186,000-square-foot facility in Ankeny previously owned by grocery chain Hy-Vee. JBS will make capital investments to allow the establishment to produce sausage and bacon by mid-2026.
- Brazil-based JBS has invested in its U.S. manufacturing network this year to expand chicken and pork production. The world’s largest meat processor announced in May it planned to build a $135 million sausage plant in Perry, Iowa.
Dive Insight:
Consumers are increasingly turning to pork and chicken over pricier beef, with demand outpacing JBS' production capacity in the U.S. The company has invested heavily to build out both its pork and chicken production.
JBS’s majority-owned Pilgrim's Pride is planning a $400 million plant in Georgia. Combined with the pork facilities in Iowa, the investments will lead to "a significant increase" in capacity, according to Wesley Mendonca Batista Filho, JBS’ chief operating officer.
"Today, we need more capacity to continue to grow. That's our bottleneck for growth in this market," Batista told investors in mid-August. "It's actually production capacity. It's much more production capacity than actually being able to sell."
A cattle shortage in the U.S. has driven up the price of beef, pushing consumers to more affordable options. JBS' pork unit in the U.S. posted a 5% decline during the previous year due to trade restrictions with China, though executives said business fundamentals remained strong.
"When there is low availability of beef and high prices of beef, pork becomes a very good option," Batista said.
JBS currently operates four production facilities in Iowa. The plant in Perry would provide raw materials to the acquired facility in Ankeny, allowing the company to produce fully cooked sausage items in addition to bacon.
The Ankeny plant is expected to create approximately 400 jobs when all phases of the project are finished. JBS is looking to hire former employees who previously worked at the facility for Hy-Vee.
