Meatpacker Tyson Foods has announced plans to close four US facilities, representing around 10% of its chicken slaughter capacity, following a drop in sales.
Operations will cease at the sites in Arkansas, Indiana, and Missouri by the beginning of next year at the latest. The closures are also expected to affect local chicken farmers and feed producers. The news comes just months after Tyson closed two other US chicken plants, leading to the loss of almost 1,700 jobs. The company also announced it would be eliminating 10% of corporate jobs and 15% of senior leadership roles earlier this year.
While the pandemic saw Tyson’s sales increase as meat prices rose, this trend now appears to have been reversed, as the company reported an operational loss of $350 million in the second quarter of 2023. Tyson’s chicken division saw a loss of $314 million in Q2, making it the worst-performing division in the company. In Q3, chicken sales dropped by 4.5% compared to the same period last year.
Tyson is also reportedly planning to sell its Chinese poultry business, though the reason for this has not been disclosed. Furthermore, Brazil’s JBS — said to be the world’s largest meatpacker — also reported falling sales and a net loss in the second quarter of 2023.
Is Tyson diversifying?
As meat sales continue to fall, there are some indications that Tyson may be looking to diversify. Following weak Q2 sales figures — which prompted CEO Donnie King to say it was the first time he had ever “seen chicken, beef, and pork all challenged at the same time” — Tyson launched a new line of plant-based nuggets in June. This was the first time the company had ever introduced a meat alternative under its own brand. At around the same time, Tyson’s plant-based spinoff, Raised and Rooted, also launched a new chicken alternative.
Tyson has previously invested in plant-based brands, and launched a range of meat alternatives in the Asia Pacific region in 2021. The company sold its stake in Beyond Meat in 2019, but may now be looking to revisit its interest in plant-based proteins.
“We’re looking at everything in this environment and in an effort to be the best version of Tyson we can be,” King told investors in May. “That means to be operationally excellent, being our customers’ go-to supplier, growing our value-added portfolio. We’re looking at those smaller, uncompetitive dated assets and [asking] how do you make them competitive? Do you move that capacity somewhere else? We’re looking across the enterprise to evaluate those things.”plant-based beyond meat meat alternative meat chicken poultry beef pork alternative investors