5 Reasons the Tyson-Hillshire Buyout is a Big [Meat] Deal

civil_eats_logo.jpg.662x0_q100_crop-scale     Published at Civil Eats, September 3, 2014

Although it has been in the works for months, the merger of Tyson Foods and Hillshire Brands went public the week before Labor Day, when the U.S. Justice Department approved the deal. The merger brings together the largest meat processing company in the U.S. (Tyson) and the 11th largest (Hillshire), for $7.7 billion. And even if you buy mainly sustainable and grassfed meat, this merger is worth watching. Here’s why:

1. You’re probably eating Tyson meat without even knowing it.

Tyson was interested in Hillshire in part for its branded products: Jimmy Dean, Ball Park Franks, and Hillshire Farms. The “frozen handheld breakfast sandwich” is one of the company’s specialties. Tyson hasn’t had similar success with its own forays into branded meat products (Day Starts frozen breakfasts, anyone?) and sees the merger as an opportunity to direct meat from its processing empire into an already successful national brand. Until now, Tyson has excelled at selling unbranded meat to restaurants and cafeterias and it is the national leader in “private label” meats–those sold as in-house supermarket brands. So when you eat bacon at a restaurant or chicken salad at the supermarket deli, if it doesn’t feature the name of the farm, there’s a pretty good chance it’s from Tyson.

2. Independent meat producers are an endangered species.

Tyson has become powerful by vertically integrating its operations: It buys up all the component parts of its supply chain, from grain dealers to breeding facilities to slaughterhouses, and incorporates them into the company to gain control over prices and production. As other companies have followed suit, encouraged by market forces and the “get big or get out” policies that prevail across agriculture, independent farmers and their supporting businesses have been bought out. According to the U.S. Department of Agriculture (USDA), the U.S. lost about 70 percent of its hog operations–150,000 farms–between 1993 and 2012 and with them went much agricultural infrastructure. As a result, the few independent farmers producing pastured pork humanely often have to drive 200 miles each way to a slaughterhouse. By buying up so many pieces of the farm supply chain, Tyson has contributed to an environment where many of the producers working outside their system must struggle to survive.

3. Tyson has its eye on the sustainable meat sector.

If you eat “better” quality meat, you might not pay much attention to Tyson. But Tyson is paying attention to you. Organic is the fastest growing sector of the U.S. food economy and even two years after Lay’s advertised its potato chips as local, corporations have not slowed their pursuit of the natural and sustainable markets. And meat is one of the biggest potential growth areas. Most of the nation does not have access to high quality, locally-raised meat in the grocery store, particularly value-added products like sausage and hot dogs. A few towns are beginning to rebuild their local slaughterhouses or sausage companies, but the infrastructure is rare. If the expanded Tyson/Hillshire sets its sights on this vast market and starts putting out greenwashed imitation products, it could block regional efforts to rebuild truly sustainable meat production.

…read the rest at Civil Eats…

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