- Tyson Foods acquired Tecumseh Poultry, owner of the air-chilled Smart Chicken brand, for an undisclosed amount, according to a company release.
- Tecumseh's portfolio includes air-chilled fresh and deli-style chicken, as well as chicken sausage. The company will operate separately from Tyson as a wholly owned subsidiary of the poultry giant.
- "More and more consumers want options for fresh, organic food that fits their lifestyles," Tyson's Poultry CMO Eric Schwartz said in the release. "The Smart Chicken Brand is a leader in this key organic category, and the category's growth makes this acquisition a strategic fit for Tyson Foods."
Tyson is doubling down on its protein portfolio, and buying an organic poultry producer seems like a surefire path to growth for America's biggest meat packer. Sales of organic fresh chicken rose 8.6% between 2016 and 2017, growing more than four times faster than conventional poultry, according to Nielsen's Perishables data cited by Tyson.
Tyson could also market the Smart Chicken brand's air-chilling process as a value-add. The majority of the industry uses water-chilling to cool down chicken during processing. While the USDA has approved both of these methods as safe, Tecumseh claims that putting poultry in a water bath hurts the product's taste and texture. The company argues that air-chilling yields a superior product that isn't waterlogged or exposed to unnecessary chemicals. These production details would likely be attractive to shoppers interested in organic protein, and could bolster Tyson's health halo.
This acquisition may be the first of several for Tyson this year. In January, CEO Tom Hayes said despite recent M&A activity and investments, the meat company is looking for deals that could bring "more capacity in a growing category." And organic is certainly growing — and fast. Competitor Pilgrim's Pride, the second largest American poultry processor, switched one of its plants to organic in 2016 and bought the parent company of the Just Bare organic chicken brand for $350 million.
Whether or not Tyson's Tecumseh grab is enough to keep Pilgrim's and other major players from encroaching on its organic market share — which also includes NatureRaise Farms and Aidells brands — remains to be seen.
Organic meat isn't the only trendy area where Tyson is getting active in M&A. CEO Tom Hayes told Food Dive in February that an acquisition of plant-based meat company Beyond Meat — in which Tyson recently increased its holdings — is on the table. The company's VC arm, Tyson Ventures, also recently took a minority position in cell-cultured meat startup Memphis Meats.
Getting its foot in the door in these new but fast-growing segments seems to be a savvy move for the protein producer. Like organic, these categories could quickly evolve from niche to mainstream money makers.