Tyson investing $300M in fully cooked chicken plant

Dive Brief:

• Tyson is investing $300 million in a new plant to ramp up production of fully cooked chicken products. The facility, being built in Danville, Virginia, is set to open in spring 2023 and will employ nearly 400 new workers.
• The 325,000-square-foot facility will produce two of the brand’s most popular pre-cooked frozen offerings: Any’tizer chicken bites and chicken nuggets.
• In April, the meat giant announced it would be investing $425 million in its first new poultry processing plant in 25 years with a facility in Tennessee. The decision to build the new plants comes amid a surge in demand for chicken that has made Tyson and its competitors eager to expand production and innovation.

Dive Insight:

Tyson said that the decision to open a new plant, set to be located in southern Virginia near the North Carolina border, comes amid “increasing demand” of its products. President of Prepared Foods Noelle Mara said that Tyson is “uniquely positioned” to meet the demand as sales of protein-based foods like chicken continue to surge. The company currently operates 185 chicken facilities in the U.S. and 35 prepared foods facilities.

The boom of popularity in meat and poultry began at the start of the pandemic, with sales skyrocketing 35% between March and July 2020, according to data from the Food Industry Association. Since then, the poultry craze has continued. 

In its third quarter, Tyson’s chicken sales were up 12% to $3.5 billion, according to the company’ last earnings call. CEO Donnie King noted the “continued share performance of our value-added products like Tyson chicken nuggets, crispy strips and air fried.” The company has also focused on innovation and added to its portfolio this year, launching ready-to-eat chicken sausage Breakfast Nuggets and Skillets under its Jimmy Dean brand, as well as prepared meals to cook in crockpots and ovens.

Competitors of Tyson have also been ramping up poultry production in the face of growing demand. Pilgrim’s Pride, which Brazilian meat giant JBS plans to fully acquire, announced this past October a $75 million expansion of its chicken processing facility in Cold Spring, Minn. Sanderson Farms, which is set to be acquired by Cargill and Continental Grain for $4.53 billion, has been planning a new poultry processing plant, although it warned in May it might delay building the facility because of high construction costs.

While poultry sales have been strong, Tyson has faced some issues this year. Last month, it launched a recall of nearly 9 million pounds of its frozen, fully cooked chicken sold across the U.S. after it was determined that some could have been infected with listeria. And many meat processors including Tyson have been dealing with worker shortages throughout the pandemic. This has caused Tyson to implement some changes to keep up with growing demand, such as scheduling workers fewer days with longer shifts.

Despite these issues, Tyson making yet another huge investment in a new poultry plant highlights its confidence in continued growing demand for chicken in the years ahead.