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Cargill buys two beef and pork plants to meet demand for pre-packaged cuts

Brooks Johnson, Star Tribune on

Published in Business News

Cargill employees are increasingly serving as the butchers and meat cutters for thousands of grocery stores.

The Minnesota-based agribusiness recently bought two plants that process pork and beef in a move that expands "case-ready" options for retailers, which include simple cuts or pre-seasoned chops that can be delivered directly to the meat display case.

"By bringing more of our case-ready and value-added protein products to retailers, their employees can spend less time on back-room prep work and more time helping their customers at the meat counter," Hans Kabat, president of Cargill's North American Protein business, said in a statement.

Cargill bought the plants, in Pennsylvania and Rhode Island, from Ahold Delhaize. Terms of the deal were not disclosed.

Ahold Delhaize, headquartered in the Netherlands, owns the largest group of grocery stores on the East Coast with 2,000 stores in 20 states under brands like Giant and Stop & Shop.

"By aligning these facilities with a company that specializes in meat production, we can continue to provide quality products to our brands' customers," JJ Fleeman, CEO of Ahold Delhaize USA, said in a news release.

 

Cargill had already been managing operations at the plants in a partnership stretching back to 2020 at the Pennsylvania plant and since construction began on the Rhode Island facility in 2018. About 1,000 Cargill employees staff the plants.

Cargill, one of the country's four large beef packers, expects production capacity to grow 15% and to expand case-ready offerings beyond the Ahold retailers.

Demand for case-ready meat is growing fast due to retailers' "skilled labor shortages, their need for additional store shelf solutions and the focus on safety within their stores," Cargill told the Star Tribune. The company's research found most shoppers believe it's "as good or better as meat that is cut and packaged in-store."

Nearly 75% of shoppers "sometimes or frequently purchase pre-cut, pre-marinated, or pre-seasoned meat," according to an industry trade group survey released last year. That's up from 60% in 2020.

Consumers are also gravitating more toward smaller cuts to combat inflation; meat prices rose notably in recent years and are expected to moderate in 2024.


©2024 StarTribune. Visit at startribune.com. Distributed by Tribune Content Agency, LLC.

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