- Foster Farms and Tyson Foods are both investing in expansion through new building and expanding plants, according to Food Business News and Meat + Poultry.
- Foster Farms has invested $30 million to expand a poultry processing plant in Louisiana, including upgrades to the cut-up and deboning areas of the facility. “Foster Farms is expanding its Farmerville operation to allow for future growth and flexibility of customer mix, as well as greater efficiency in its fresh chicken operations,” president and CEO Laura Flanagan told Food Business News.
- Tyson is opening a 75,000 square foot Incubation Technology Center in Springdale, Arkansas. The state-of-the-art facility replaces two other nearby hatcheries. “This state-of-the-art incubation center allows us to centralize some of our operations so we can be more efficient. It was built with the best technology available,” group president of poultry Doug Ramsey told Meat + Poultry. In fact, this is the second facility announcement by Tyson this month.
There’s big business in the protein space. In spite of health concerns and new advances in meat substitutes, meat and poultry will continue to see sales increases. Last year, Rabobank Food & Agribusiness Research and Advisory group reported that meat consumption on the whole posted its largest increase in 40 years.
To meet rising demand, big meat producers will continue to invest in building new plants and expanding and upgrading existing facilities. But maybe even more importantly, manufacturers are pumping capital into state-of-the-art facilities and upgrades to improve operating efficiency.
Increased efficiencies offer several benefits. They keep the cost of goods — and therefore consumer prices — down. It lowers operating costs, which could mean more dollars dropping to the bottom line — a win for companies and shareholders alike. And the more money saved through efficient operations means more available to continue investing — in things like more new facilities, upgrades, marketing and advertising.
Improving conditions and reducing animal cruelty are also motivating some producers to invest in better facilities. This is at least partially the case for Tyson. Its new Incubation Technology Center is intended to promote the health of chicks with the “latest advances in biosecurity, including the use of high-tech ventilation and internal environmental controls to continually circulate fresh air throughout the building,” according to a company statement. Just last month, Perdue Farms also announced plans to dramatically improve conditions at its facilities and slaughterhouses to reduce the suffering of chickens.
Besides Foster Farms, Tyson and Perdue, other meat companies have been spending on new facilities and acquisitions too. Earlier this week, Smithfield Foods said it was investing $100 million to build a new distribution center and expand its existing cold storage capabilities at a North Carolina processing facility. The company has been on the acquisition trail too, buying Kansas City Sausage earlier this month and Clougherty Packing in January.
Cargill has invested in Memphis Meats, the startup behind the world's first cell-cultured meatball and chicken strip. This is the first investment by a traditional meat company in the "clean meat" segment, where companies use cutting-edge cell-replicating technology to grow beef, poultry and fish from living animal tissue. Last year, Tyson acquired a 5% stake in Beyond Meat, which uses non-meat protein sources like soy and pea to create plant-based, meat-like products.
Despite increased consumer demand for plant-based proteins and competitive inroads being made in the alternative meat space, Packaged Facts projects meat and poultry will remain “mainstays and protein powerhouses.” Meat and poultry will, by far, continue to compose the bulk of a market forecast to approach $100 billion in 2021. In contrast, sales of meat substitutes are projected to still be less than $2 billion by 2021.
Is there a risk of having too much meat on the market given all the plant openings? Not by a long shot. According to CB Insights' Feeding the Future report, there won’t be enough food to feed the world’s population by 2050. Investing in production facilities now gives more hope for feeding the future.