Italian meat processor added to JBS’s offering
Grupo King’s, an Italian producer of deli meat, is being acquired by JBS SA for €82 million, or $92.5 million. After the deal closes, Grupo King’s will become a part of JBS’s Rigamonti division.
Grupo King is present in the markets of over 20 nations, including the US. JBS stated that the acquisition fits perfectly with its plan to expand into the US, Europe, and other areas because it now had a portfolio, production, and distribution structure for Italian specialty meats such salami, speck, mortadella, prosciutto, and bresaola.
In the United States, where its affiliate Swift Prepared Foods is constructing a new Italian speciality plant in Columbia, Missouri, JBS also anticipates increasing synergy. In 2022, the facility is anticipated to be operational.
Gilberto Tomazoni, the CEO of JBS, stated, “This acquisition follows the strategic direction of growing in products of very high added value.” “We are leveraging the commercial strategy in the United States, where we are investing $200 million in an Italian specialty factory, and it places us among the leaders of the Italian salumeria.” There is a lot of room for expansion for the King’s and Príncipe brands in both Europe and the US.
For the quarter ended Dec. 30, 2023, the Prepared Foods unit had sales of $2.54 billion and flat when compared with the year prior. Volume of product sold rose 2.5%. Segment operating income fell to $243 million from $258 million the year before.
King noted that during the pandemic Tyson Foods lost a significant amount of foodservice business, because it could not support the category and the company had to give up some business. Hindering the recovery have been contracts former customers signed with competitors.
“… The nature of those contracts can be quite lengthy,” he said. “And we’re starting to get back in when those open up and get some volume.”
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An analyst on the call asked how recovery in foodservice may affect the company’s margin differential between branded, private label and foodservice, and King said the capacity being used already exists.
“So, if you think about it from that perspective, this overhead in these assets has been a drag on our business to some degree,” he said. “We’ve gotten new volume to put into those assets. So that’s one piece of it.