Smithfield Foods is investing in its growth in a fast-growing category, and that expanded capacity comes in the form of a new facility. The packaged meat and fresh pork provider announced it entered into a definitive agreement to purchase a premier dry sausage production facility from Cargill. The Nashville, Tennessee, location will help fuel the provider’s growth in the value-added packaged meats segment.
"This transaction is a testament to our continued focus on growing our packaged meats business by staying ahead of and delivering on our customers' preferences. Dry sausage is one of our fastest-growing categories, and acquiring this facility from Cargill will better position us to improve sales, drive volume, and increase our capacity to bring high-quality dry sausage products to the foodservice, industrial, and retail sectors," said Steve France, President of Packaged Meats. "We look forward to serving this facility's existing customers and welcoming a new group of team members to Smithfield Foods.”
As a press release detailed, production from the Nashville facility will support Smithfield's existing portfolio of dry sausage brands, including Margherita, Carando, and Armour, adding dry sausage production capacity of 50 million pounds per year. This move strategically enhances Smithfield’s ability to serve growing demand for high-quality pepperoni, deli, charcuterie, and other dry sausage products.
While the terms of the agreement were not disclosed, the transaction is expected to close by the end of July 2024, subject to customary closing conditions. Smithfield will make formal offers of employment to the approximately 160 active Cargill Nashville employees for the same positions they currently hold.
The deal comes at a pivotal time as, according to the release, the U.S. retail/deli dry sausage segment is projected to grow from $4.7 billion in 2023 to $6.9 by 2030; in the foodservice segment, 65 percent of pizzeria operators expect gross annual sales to be up over the next 12 months, with 44 percent expecting sales to be up 5 percent or more.
How will the company continue to tap into this increasingly popular segment? DMN will report on the latest strategies.
