Tyson Foods has agreed to acquire the poultry rendering and blending assets of American Proteins and AMPRO Products in a deal valued at $850 million.  

Tyson expects the deal to strengthen its ability to meet its sustainability goals through greater recycling of animal products for a range of uses including feed, pet food, and aquaculture, while also expanding its presence in the animal feed ingredients sector.

“Rendering plays a key role in growing our business and helping us deliver on our sustainability goals,” said Tom Hayes, president and CEO of Tyson Foods. “Through this important business, no part of the animal goes to waste, and we can recycle valuable ingredients into feed for pets and aquaculture.”

The deal, which would add 700 current American Proteins employees to Tysons’ workforce, will give Tyson four rendering plants located in Georgia and Alabama, and 13 blending facilities spread across the Southeast and Midwest regions of the U.S. – all assets that will add capacity to Tyson’s current animal byproducts business.

“This acquisition is a great complement to our existing business, gives us the ability to render raw materials in a region we don’t currently serve, and better positions us to meet the competitive, fast-growing national and global demand for animal protein,” said Doug Ramsey, group president of poultry for Tyson Foods.

A Foot in Each Field

Tyson Foods’ has read the writing on the consumer wall, and has noted the growing upswing in popularity of plant-based proteins.

In October 2016, Tyson, which is the largest meat company in the U.S. by sales, became the first global meat company to invest in a meat alternative startup when it announced it had acquired a five percent stake in plant-based meat alternative producer Beyond Meat.

In December 2017, Tyson became a repeat investor, partaking in a $55 million Series F for the company along with venture capital firm Cleveland Avenue, which was founded by former McDonalds CEO Don Thompson.

These moves by Tyson carried significant weight in what they signaled to the broader food industry.

“We’re enthusiastic about this investment,” said Monica McGurk, Tyson Foods’ executive vice president of Strategy and New Ventures & president of Foodservice at the time, adding, “which gives us exposure to a fast-growing segment of the protein market. It meets our desire to offer consumers choices and to consider how we can serve an ever-growing and diverse global population…”

Sustainability

For Tyson, business goals are centering around striving for greater sustainability. In April of this year, the company announced a target to reduce greenhouse gas emissions by 30 percent by 2020. Under its program designed to achieve this goal, the company has committed to improving environmental practices on two million acres of farmland – the largest-ever land stewardship commitment made by a U.S.-based protein company.

“The world needs a more sustainable food system, and we believe it’s up to big companies like ours to set the pace with bold goals that help protect the planet while also enabling us to feed a growing world,” said Tyson CEO Hayes. “We look forward to collaborating with grain farmers, environmental groups and others as we implement this new initiative.”

This deal for the rendering and blending assets of American Proteins and AMPRO Products will help Tyson play a role in keeping animal products out of the country’s landfills. Rendering also contributes to carbon emission reduction in North America, according to the National Rendering Association, which states that it is equivalent to eliminating more than 12 million cars from roads each year. Along with the environmental benefits of the deal, Tyson expects the addition of the new business to generate more than $550 million within the first year.

“American Proteins’ management team has built a great business and the production teams have done a wonderful job making animal feed ingredients for years. We admire the company and believe this will be a good cultural fit,” said Ramsey. “Investing in this part of our business is an investment in the future sustainability of our company.”

-Lynda Kiernan