Processing feature: Show me the money

How the UK’s major poultry processors are ploughing huge sums into new plants, equipment and technology

Construction is underway at Eye, Suffolk of a new £54 million poultry processing plant. The Crown Chicken plant, which is due to open in 2019, is the first new poultry processing plant of its size to be built from scratch since the 1980s, according to Matthew Ward, Crown’s agricultural director, and is a sign of growing demand for poultry meat in the UK.

Consumers are eating more poultry than ever before. Moy Park, which produces one third of all poultry eaten in the UK, announced earlier this year it had reached the milestone of processing six million birds a week, a sign of the UK’s ever-increasing appetite for chicken.

Poultry makes up half of all the meat eaten in the UK, and consumption is continually increasing, due to its versality, health credentials and value for money. The volume of poultry sold increased 1.9% during the 12 weeks ending 13 August, according to Kantar Worldpanel data.

And this growing demand is enabling processors to expand their facilities, invest in new machinery and technology, and in many cases create new jobs.

Bernard Matthews, which was bought by 2 Sisters’ founder Ranjit Boparan in 2016, has just announced it is creating more jobs at its Great Witchingham site in Norfolk after winning a big cooked chicken contract with a major retailer.

“It is likely because of the scale of this new opportunity that we’re going to have to be innovative in the way we work and extend operations so we can fulfil orders,” said Chris Just, managing director of Bernard Matthews. “This is an exciting development for the business and demonstrates that Bernard Matthews has turned the corner. What’s great is that we have the ability to expand our capabilities and offer a cooked poultry product which is in such great demand.”

Changing demand

Despite this, It’s not the easiest time for poultry processing businesses. There are big concerns over sourcing enough workers to keep plants going after Brexit, because so many staff are currently EU nationals. The weak pound is also putting pressure on profit margins. Average prices of poultry at retail fell -1.7% to £3.97 per kilo in the 12 weeks to 13 August.

In addition, consumers’ eating habits are changing, with a long-term decline in roasts and easy-to-cook cuts growing in popularity. Legs were the best performing part of the chicken market during the summer, with volumes up +5.2% and value up +3.6%. Chicken breast sales also grew strongly during the same period, up 2.6% in volume.

All this means processors are having to be smart in their investments and chose equipment that will help them rise to the challenge of a potentially depleted labour pool while producing the type of poultry products consumers are now demanding.

Cranswick, which owns Crown Chicken, is not the only major food manufacturer investing in new facilities. Poultry integrators 2 Sisters, Cargill, and Moy Park have also announced multi-million pound investments in poultry processing to meet growing demand.

Changing tastes

Moy Park’s ongoing strategic investment programme is focused on enhancing operations across its agriculture and processing facilities and last year it invested over £40 million as part of this strategy – boosting production to a record 6 million birds per week in response to growing customer demand, for the first time in its 75-year history.

Recently, the firm, which is Northern Ireland’s biggest private sector employer, announced an investment of over £18 million across a number of sites in Lincolnshire. At the Anwick facility, Moy Park has completed a £6 million investment which saw a refresh of the factory’s layout and installation of state-of-the-art equipment, including robotic and automation technology.

A £12 million investment is also underway at the nearby Grantham facility which will see the installation of new, high-tech mixing and processing equipment as well as the creation of Moy Park’s first fully contained ‘free from’ factory within the Grantham site.

Many consumers are taking health and healthy eating more seriously, and the growth of free-from categories is one area which exemplifies this – even in prepared poultry products. Whilst only small numbers of consumers actually suffer from a food allergy, far greater numbers are changing their eating behaviour for health reasons; 5% of consumers suffer from gluten intolerance, but 30% say that they have eaten a gluten free product in the last six months.

This level of interest is continuing to drive double digit growth in the market and, with interest in gluten free highest amongst younger shoppers, this is a trend which Moy Park says it expects to continue to develop for many years.

Room for expansion

Cranswick, which is the parent company of Crown Chicken, isn’t limiting its investment to a new plant in Suffolk. A new £28 million continental foods facility in Bury, Lancashire is progressing to plan, and there will also be a £13 million investment to upscale existing milling and hatchery facilities in Suffolk, complementing the new processing plant.  

Adam Couch, Cranswick’s chief executive said in the firm’s most recent financial results it had invested a record £29 million in infrastructure during the first half of the year. He described the new plant at Eye as a “class-leading facility” and said it would “double our existing capacity with further room for expansion.

“The facility will incorporate the highest animal welfare standards and latest generation production techniques and equipment to drive operational efficiency gains.  We also plan to upscale our feed mill and hatchery operations to maintain our fully integrated supply chain model.”

Government investment

In Scotland, 2 Sisters has announced a major investment, partly funded by public money.  A major upgrade of 2 Sisters Coupar Angus plant is being made following funding from the Government-backed Food Processing Marketing and Co-operation Grant Scheme.

More than 250 new jobs will be created as a result and the business can now double the cutting capacity in the portions department. The move aligns with the food group’s strategic aim of developing more efficient, shorter supply chains which ultimately cut down on food waste, logistical and distribution costs.

2 Sisters will be investing around £3.5 million, which will be topped up by the grant to total £5 million. The funding will go towards the development of existing colleagues, the purchase of new equipment required to increase capacity and the recruitment of an additional 250 staff.

“We are committed to providing fresh, quality produce to our customers and creating a shorter supply chain enables us to do just that,” said Keith Packer, managing director of 2 Sisters UK Poultry. “We have always said we will invest when it is the right thing to do for the business, but the timing and conditions have to be right. This is a great example of that.

“I am delighted that we have secured the support from the Scottish Government as this represents security and growth for our business and local community in Perthshire.”

Another example of public funding came last year in Wales, when Maelor Foods opened a new £20m poultry processing plant in Wrexham that created around 150 jobs.

The state-of-the-art facility received £3.15 million in funding through the Food Business Investment Scheme through the Welsh Government Rural Communities – Rural Development Programme 2014-2020, which is funded by the European Agricultural Fund for Rural Development and the Welsh Government.

The plant was developed on the 42-acre site of the former First Milk site following an extensive refurbishment and building programme. It is now processing around 122 tonnes of poultry per day.

Job creation

Elsewhere, Cargill is expanding its chicken manufacturing plant in Wolverhampton with the installation of a second production line which will create 80 new food manufacturing jobs for the local community.

“We have built a sustainable chicken supply chain with our trusted partners to provide our Wolverhampton site with whole chicken breast fillets to make breaded and battered products for our loyal food service customers,” said Jon Lauritzen, commercial director. “Our further investment of £35million will ensure we maintain our reputation as a ‘best in class’ facility.”

To support an already extensive recruitment drive at the Cargill Wolverhampton plant, Cargill is working with Job Centre Plus and Wolverhampton City College as well as further community partners to educate and engage the local community in relation to what a career in food manufacturing can offer. 

The Wolverhampton site will also be launching an ambitious and comprehensive learning and development programme, through the utilisation of its healthy apprenticeship levy fund and with the support of the National Skills Academy for Food & Drink later this year. This enables the site to continue to further its commitment to develop and upskill its employees.

Eggs

It’s not just poultry processors ploughing millions into new facilities. Egg packers and processors are spending big too.

Framptons, the £43m turnover, Shepton Mallet based manufacturer of egg products and processor of liquid products is to invest after securing £7 million.

The funding came from Leumi ABL, which agreed to provide a £7m Asset Based Lending funding line.

The funds enable Framptons, which was bought by the current team in a management buy-out in 2014, to invest in further new product development for foodservice customers and for specific capital expenditure projects.

And LJ Fairburn, the independent egg producer and packer, which won Poultry Business of the Year at the inaugural National Egg & Poultry Awards 2018, has recently invested £2 million in robotics and new Moba graders at its packing plant in Lincolnshire.

“People can’t physically pack eggs quick enough to keep up with capacity so the robotics just help us increase efficiencies, and they make everything run a lot more efficiently in the packing centre,” says Sarah-Louise Fairburn. “And because we’ve got such an increased growth in demand from customers, we need that. “Literally every penny we’re making it’s going straight back into the business and that’s the way it’s going to continue.”

Automation has been particularly important because the business handles so many different types of egg – 84 in total – from Taste the Difference Golden Yolk for Sainsbury’s to Asda Extra Special, organic, blue eggs, and dozens of other lines for different retailers.

All these examples are encouraging signs of commitment to developing the UK poultry industry in order to remain one of the most competitive and advanced markets in the world. Although there are big challenges in the 12 months ahead, when the Crown Chicken plant starts up its equipment for the first time in autumn 2019, it will give a clear message to the whole supply chain that the poultry industry is open for business.

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