MEAT+POULTRY - July 2015 - 10

BUSINESS NOTES

HORMEL ACQUIRES APPLEGATE FARMS
According to Hormel Foods Corp.'s CEO and President
Jeffrey Ettinger, the company has long considered ways
to build a natural and organic value-added prepared meats
category from the ground up. Instead, Austin, Minn.based Hormel went shopping for the segment to add to
its business and on May 26 announced the purchase of
Applegate Farms LLC, the No. 1 brand in the natural and
organic value-added prepared
meats category, for $775 million.
Applegate's annual sales for 2015
are estimated to be approximately
$340 million.
"Clearly, with a 25-year head
start and deep expertise and
credibility in this space, this
transaction provides us a much
more meaningful position in the
natural and organic space," Ettinger
Jeffrey Ettinger
said during a May 27 teleconference
detailing the transaction. "The
acquisition will provide our refrigerated foods segment
an entrance into the high-growth category of premium,
natural and organic meats."
Applegate was founded by Stephen McDonnell,
the Bridgewater, NJ-based company's long-time CEO.
McDonnell said it was his mission when he founded the
company 28 years ago to change the way people think
about meat. McDonnell will remain as a consultant.
Ettinger said a growing number of consumers want
natural and organic products. "Our core motivation is to
be where the consumers are," he added.
Applegate will operate as a standalone subsidiary in
Hormel's Refrigerated Foods segment and its employee
base of about 100 will not be affected. Ettinger said
Hormel will relocate a few of its employees to Bridgewater
to work for the brand.
Applegate has strategic relationships with a diverse
set of manufacturers and processors who draw from
approximately 1,800 family farms, Ettinger said. "It's our
goal to keep this supply chain intact," he added.
Applegate has more than 150 products, including hot
dogs, bacon and deli meat.
While Applegate is not in foodservice, that could
change under Hormel.
"We created our foodservice group 20 years ago,"
Ettinger said. "It has been steadily growing at double-digit
rates for a number of years now."
Jody Feragen, Hormel's executive vice president
and COO, said the company expects sales generated by
Applegate to grow significantly faster than Hormel's stated
company goal of 5 percent topline growth.

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The deal, expected to close in 60 days, was financed
with cash and debt, Feragen added.
Ettinger said Applegate buyers "can rest assured there
will not be any changes to the way Applegate meats are
raised and produced."

MONOGRAM FOODS EXPANDS IN VIRGINIA
Monogram Foods, Martinsville, Va., is the latest food
company to announce expansion plans. The company
commissioned a warehousing and distribution facility at its
manufacturing plant in Martinsville at a cost of $7.2 million.
Karl Schledwitz, chairman and CEO said: "This will be
our fourth expansion at the Martinsville facility since we
acquired the plant in 2009. We are pleased that Monogram
is positioned to create quality jobs in the state of Virginia."
Funding for the facility is provided by a $200,000
grant from the Governor's Opportunity Fund with
an additional $365,000 coming from The Virginia
Tobacco Indemnification and Community Revitalization
Commission. The company expects the project to add 101
new jobs at the plant.
The company previously announced a $36.5 million
expansion at Martinsville. The warehouse and distribution
facility is the second capital improvement project
announced in six months.
Monogram Foods is a leading producer of meat snacks.

JBS TO ACQUIRE EUROPEAN POULTRY
PROCESSOR, CLOSES PLANT
JBS SA, one of the world's largest meat processors, has
entered into an agreement with Marfrig Global Foods,
Sao Paulo, to acquire Moy Park Holdings Europe Ltd. for
approximately $1.5 billion. Moy Park is a poultry processor
with operations in the United Kingdom and Europe.
"This transaction represents an important step in JBS'
strategy to grow its portfolio of prepared and convenient
products with high value added," the company said.
"In addition, this acquisition increases the company's
geographic diversification with an expansion of its
operations in Europe."
Moy Park is one of Europe's largest poultry processors
and it is the largest producer of organic and free range
chicken in the United Kingdom. The company has 13
processing plants and is based in Northern Ireland.
In other JBS news, despite a huge jump in operating
income that led to an increase in net profit for JBS in the
first quarter, the company announced on June 3 that it had
closed a plant in Brazil's Rondonia state due to lack of
cattle ready for slaughter.
It's the second plant that JBS has closed this year. On

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MEAT+POULTRY - July 2015

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