Dive Brief:
- Tyson Foods is opening its first new poultry processing facility in 25 years with a plant in Humboldt, Tennessee, according to a press release.
- The company invested $425 million in the 370,000-square-foot facility, which includes a processing plant, feed mill and hatchery. The plant will produce pre-packaged trays of fresh chicken for retail, and operations could begin as soon as late April. Tyson expects to employ more than 1,500 at the plant by 2023.
- Tyson maintains five other facilities across Tennessee. This is the second economic development project that the poultry giant has pursued in the state following an $84 million expansion of its Union City operation in August 2017.
Dive Insight:
Meat and poultry sales have seen a major boost thanks to the pandemic, skyrocketing nearly 35% between March and July 2020 compared to the same period during the prior year, according to data from the Food Industry Association (FMI) and the Foundation for Meat and Poultry Research and Education. As consumers spent more time cooking at home, their meat purchases changed, with some exploring new types and cuts of meat that they had not considered prior to the pandemic. This translated to $82.5 billion in meat sales for 2020, up 19.2% over previous years.
Fifty-eight percent of consumers plan to keep purchasing a broader range of meat and poultry items, according to the FMI study. During the pandemic, consumers also increased their spending in the frozen food aisle, stocking up on things like frozen meat, in a desire to cut down on trips to the supermarket and stockpile ahead of any shortages.
As restaurants reopen, however, some of the rising tides that boosted meat could sink. A recent report from Numerator that assessed which food segments are most at-risk of falling retail sales as restaurants reopened put meat at the top of the list. The segment is 50% more likely than the average grocery category to decrease in sales as consumers return to dining out. This makes continued innovation even more important if meat companies want to keep consumers' attention.
Tyson is also expanding its case-ready meat production by reopening an idle plant in Columbia, S.C. Last month, the company announced it would invest $55 million over the next three to five years to convert the facility to produce retail ready, portioned packages of sliced fresh beef and pork, as well as ground beef, for grocery and club stores in the eastern U.S. It has also announced plans to expand a Texas bacon facility.
Other meat producers have also recently announced expansion plans. This past October, JBS USA's Pilgrim's Pride said it would invest $75 million to expand a poultry plant in Cold Spring, Minnesota, set to be complete in early 2021.
The production expansions represent a reversal in fortune for meat companies such as Tyson, just one year after the pandemic began. In April 2020, it had been forced to close pork processing facilities in Iowa as COVID-19 cases spiked among employees. The plants would reopen shortly after. More recently, Tyson has ramped up vaccinations, having already vaccinated roughly 65% of workers at its Council Bluff, Iowa, facility and a neighboring plant as of this past March.
