Sausage in motion
Feb. 18, 2014
Last year was another big-news year for the US sausage industry. Besides the never-ending stream of new sausage introductions entering the marketplace in 2013, many sausage companies added to their assets last year while others opted to tighten up their operations.
Smithfield Foods Inc. acquired a 50 percent interest in Kansas City Sausage Company LLC (KCS), for $35.0 million in cash in May 2013 (fiscal 2014). Smithfield intends to merge KCS’s operations and products with its brands and sales and marketing team to continue to grow its packaged meats business. The venture operates in Des Moines, Iowa – where KCS’s parent company, Pine Ridge Farms is based, and Kansas City, Mo. In Des Moines, the venture will produce premium raw materials for sausage, as well as value-added products, including boneless hams and hides. The Kansas City plant is a modern sausage-processing facility designed for optimum efficiency.
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“With our strong, ongoing focus on building our packaged meats business, and with 15 percent of the US sow population, this joint venture is a logical fit for Smithfield,” said C. Larry Pope, president and CEO of Smithfield. “It will provide a growth platform in two key packaged meats categories – breakfast sausage and dinner sausage – and will allow us to expand our product offerings to our customers. These categories represent over $4 billion in retail and foodservice sales annually. This is a big opportunity for Smithfield to grow in two categories that have not historically been a focus for the company. Kansas City Sausage is one of our largest live-sow customers today.”
KCS, a leading US sausage producer and sow processor, has sales of approximately $200 million. The company has operations in Des Moines, Iowa, and Kansas City, Mo. The Des Moines operation produces premium raw materials for sausage and value-added products such as boneless hams and hides.
Late last December, KCS announced it was acquiring the assets of Martin’s Abattoir & Wholesale Meats and its sister companies – Coastal Protein Products Inc. and Coastal Protein Inc. The transaction is expected to close in the first quarter of 2014.
Acquiring Martin’s Abattoir gives KCS the ability to expand harvest and sausage operations in North Carolina while taking advantage of an abundant sow base. Martin’s Abattoir will continue to supply sausage and raw materials to the industry.
Last October, Rochelle Park, NJ-based Premio Foods Inc. completed its acquisition of Brooksville, Fla.-based La Bella Sausage LLC. Premio Foods expects this move to strengthen its product expansion capabilities and bring new customers and locations to the business. Premio also plans to add new jobs to accommodate increased production. Premio Foods is a family owned-and-operated business specializing in pork and chicken sausage production. La Bella Sausage is a leading producer of fresh and fresh-frozen meat and poultry products. Production is managed from two facilities in Brooksville.
Bob Evans closes plant
While consolidation dominated headlines in parts of the sausage-processing segment, Bob Evans Farms Inc. (BEF) closed its sausage production plant in Richardson, Texas, on Sept. 27. The company cited rising prices for sows for the closure.
“To allow BEF Foods to better manage production capacity within our foods business, we have closed our plant in Richardson, Texas,” said Mike Townsley, president of BEF Foods Inc. “This closure allows us to address continuing challenges in food production, particularly record-high prices for sows.” The company also operates production plants in Xenia, Ohio and Hillsdale, Mich.
In March 2013, Columbus, Ohio-based Bob Evans Farms Inc. announced it sold its headquarters building in Columbus, Ohio, and two Ohio-based production facilities to New Mill Capital LLC, a Los Angeles-based private equity firm. The company is moving its headquarters to New Albany, Ohio.
The food production facilities sold to New Mill Capital are in Springfield and Bidwell, Ohio. The 43,700-sq.-ft. Bidwell plant manufactures cooked sausage patties and links. The 38,200-sq.-ft. Springfield plant manufactures sausage, soups and gravies.
“New Mill Capital has a vast amount of experience repurposing properties such as the ones we have purchased from Bob Evans,” said Gregory Schain, executive vice president for New Mill Capital.
Also in September, Kent, Wash.-based Isernio’s Sausage Company announced it was moving into a new, technology-rich processing plant and office space. The plant covers 27,750 sq. ft. and includes a 6,200-sq.-ft. temperature-controlled production area, a 4,420-sq.-ft. refrigerated/frozen storage area and more than 5,000 sq. ft. of office and test kitchen space.
“As more consumers have discovered our premium sausage, especially the health benefits of our lean chicken sausage, we needed the space to produce our fresh products daily and meet that demand,” said Frank Isernio, president of the company.
Last July, private-investment firm Altamont Capital Partners acquired Richard’s Cajun Foods and Blue Ribbon from Atlantic Premium Brands Ltd. Lafayette, La.-based Richard’s is a leading manufacturer of smoked sausages, ready-to-eat meals and traditional Cajun products sold in Louisiana. Blue Ribbon is a Southeast Texas-based brand of bacon and sausage. Under Altamont Capital’s ownership, the two companies will form Tall Tree Foods Holdings Inc., a new holding company. Altamont tapped Tim Bruer to lead the new company.
Altamont Capital Partners is a San Francisco Bay Area-based private-investment firm with approximately $500 million of capital under management. Atlantic Premium Brands is a food holding company specializing in acquiring, growing and divesting specialty meat, food and beverage businesses. It principally is owned by a group of private investors.
Last May, Union City, Tenn.-based Williams Sausage Co. announced plans to invest $3 million to expand its manufacturing facility. The expansion will add 150 employees to its current workforce of 414, according to local news reports.
Early last year, Chicago-based Peer Foods Group Inc. acquired Emge Foods LLC, an Indiana-based processed meats company specializing in retail sausage, branded hams, bacon, hot dogs and other items. The acquisition allows Peer Foods to expand its portfolio and gives Peer Foods increased manufacturing capacity in Indiana. Emge Foods products are available nationally.