- Sanderson Farms is cutting chicken processing during the next four weeks in Moultrie, Georgia after it told 415 healthy workers to stay home with pay, Reuters said. The employees reportedly live in Dougherty County, which is a "hotbed" of coronavirus cases, the wire service reported, citing Sanderson Farm's CEO.
- After sending workers home, the poultry giant said it would reduce output to 1 million birds a week from 1.3 million in Moultrie. Georgia is the country's largest poultry-producing state.
- The decision to send healthy workers home comes as Sanderson Farms said April 2 that 15 employees tested positive for COVID-19 and another 36 people were awaiting test results, according to Meat + Poultry. Sanderson Farms reported its first employee with the virus on March 23.
As coronavirus spreads throughout the United States, it has infiltrated nearly all facets of the country's landscape, including corporate America. In addition to Sanderson Farms, Tyson Foods workers, employees at Coca-Cola bottling plants in Washington State and California and another worker at Nestlé's Purina distribution center in Pennsylvania tested positive for the virus.
Many large CPG companies have taken steps to improve working conditions for their employees by putting in place social distancing efforts, doing extra cleaning and checking the temperatures of people before they enter the facility. PepsiCo, Nestlé, Mondelez International and Unilever are also giving extra pay and other benefits to their staff working during the outbreak.
But for Sanderson Farms, which has seen the virus have a deeper impact on its employee base, the decision to curtail production in Georgia after sending more than 400 workers home is likely a reflection of the impact of coronavirus in the area.
It also may be harder for employees in a meat or poultry processing plant to work further apart, increasing the chance that the virus spreads more easily. Sanderson Farms could be looking to protect its workforce in the area where COVID-19 is especially pronounced.
Dougherty County in Georgia has more than 500 known cases of the illness caused by coronavirus and the most deaths of any county in the state, Reuters reported. There have been at least 29 coronavirus-related deaths in the county.
The U.S. is the world's largest chicken producer, processing more than 9 billion birds in 2018, according to data from the National Chicken Council. Georgia is the top broiler producer with roughly 1.4 billion, or 15% of the total, followed by Arkansas at 1.1 billion.
Each week, Sanderson Farms processes more than 10.6 million chickens per week, or more than 3.7 billion pounds of poultry for human consumption annually, the company said on its website.
The decision to send workers home also may have been impacted by supply and demand. Chicken and meat processors are producing more packaged chicken found in grocery stores getting snapped up by consumers as restaurants and other foodservice establishments that typically use larger birds shutter or drastically cut back on service.
Sales of fresh chicken jumped 46% in the last four weeks ended March 28, while fully cooked chicken was up about 28%, according to Nielsen data. Whether the spike in consumption at supermarkets has been enough to offset lost sales on the foodservice side of Sanderson Farms' business will be determined in upcoming earnings. If demand has declined, it may make sense for Sanderson Farms to cutback on its operations where the virus is spreading quickly while protecting the health of employees they may need later on.
As coronavirus continues to spread, additional food and beverage companies will undoubtedly see more of their employees impacted by the disease. CPGs will have to prepare for how they will respond if the pandemic impacts them and whether there are steps they can take in the near term to protect works, even if it means sending healthy employees used to working in a plant home.