Smithfield Foods, Inc. has acquired 50% of the Kansas City Sausage Co. L.L.C. and its sister company Pine Ridge Farms L.L.C. The company said the effort will be funded with cash on hand and is expected to close in the fourth quarter of Smithfield’s fiscal year. Terms of the agreement were not disclosed.
“Kansas City Sausage is one of our largest live sow customers today,” said C. Larry Pope, president and chief executive officer of Smithfield Foods. “This joint venture will enable us to move raw material up the value chain from commodity live sows to branded packaged meats. We will merge Kansas City Sausage’s low-cost, efficient operations and high-quality products with Smithfield’s strong brands and sales and marketing team to continue to grow our packaged meats business. This combination should allow us to fill existing plant capacity and dramatically increase the joint venture’s sales in a relatively short period of time.”
Mr. Pope added that the venture will allow Smithfield Foods to grow its presence in the breakfast sausage and dinner sausage categories, which he said is a category with an estimated $4 billion in food service and retail sales.
“This is a big opportunity for Smithfield to grow in two categories that have not historically been a focus for the company,” Mr. Pope said.
With sales of approximately $200 million, Kansas City Sausage has operations in Des Moines, Iowa, and Kansas City.
