Dive Brief:
- Swift Prepared Foods, a subsidiary of JBS USA, is acquiring Sunnyvalley Smoked Meats for $90 million. Sunnyvalley, which produces smoked bacon, turkey and ham for retail and wholesale customers, has gross annual revenues of $150 million and employs over 300 people.
- The purchase, which is subject to closing, includes Sunnyvalley’s Manteca, California, production facility. Bill Andreetta, president and founder of Sunnyvalley, will continue to lead the more than 30-year-old business.
- The acquisition gives Swift Prepared Foods, a subsidiary of JBS USA that specializes in private-label and branded packaged meats, an expanded geographic footprint in the smoked segment, as demand for bacon and other pork products rises during the pandemic.
Dive Insight:
Ever since Plumrose USA rebranded to Swift Prepared Foods this past January, the private-label and branded smoked meats specialist has been building momentum.
The firm, acquired by JBS USA in 2017, operates seven production facilities in Mississippi, Indiana, Iowa and Vermont. This past May, it opened a $70 million ready-to-eat bacon facility in Moberly, Missouri. It is also building an Italian meats production plant in Columbia. The addition of Sunnyvalley gives Swift Prepared Foods a West Coast footprint, at a time when demand for meats — especially bacon — is climbing.
“Today’s announcement is consistent with our company’s long-term strategy to increase our value-added and branded portfolio, and provide even more diverse product offerings to customers and consumers,” said Tom Lopez, president and chief operating officer of Swift Prepared Foods, in a statement on the Sunnyvalley purchase.
Bacon has been among the most sought-after food items during the pandemic as consumers spent more time at home. Many people panic-bought and stockpiled pork products, with Costco reporting a 45% increase in bacon sales during the second quarter of 2020.
At the same time that demand has been growing, bacon has been seeing huge price spikes. Last month, Consumer Price Index data showed that bacon now costs nearly 28% more on average than one year ago, due to supply chain issues.
While it’s a fraught time for the pork industry, it makes sense why Swift Prepared Foods and parent company JBS want a bigger slice of the market. In its second quarter earnings call this year, JBS S.A. CEO Gilberto Tomazoni said the company was looking to diversify its protein lineup, specifically pork products. In the second quarter of this year, JBS USA’s pork revenue hit $10.7 billion, over 25% higher than the same quarter a year prior. It also opened up a new pork distribution facility in Iowa.
“Our long-term strategy is already under way, and it is also visible in our investments for deepening both geographical and portfolio diversification,” Tomazoni said.
The acquisition of Sunnyvalley gives JBS an opportunity to gain share in a bacon segment dominated in the U.S. by Kraft Heinz’s Oscar Mayer, Smithfield, Hormel and Tyson. JBS USA’s main bacon brands include Swift and Plumrose.
Bacon is just one area where JBS has been investing in protein. In March of this year, The Wall Street Journal reported that JBS was in talks to buy Hebrew National hot dogs from Conagra for $700 million, though no further announcement has been made since. And in June, JBS USA announced a $130 million investment in expanding its beef capacity to meet growing demand.
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