July 2, 2007

 

Pilgrim's Pride, the rise of a chicken giant

 

 

What has enabled Pilgrim's Pride, a company that started as a feed and seed store after the Second World War to become the top chicken company in the US today?

 

One thing that has enabled the company to distinguish itself from the competition for the past sixty years has been the ability to stay one step ahead of competitors,

 

It also didn't hurt that Lonnie Bo Pilgrim, 79, Pilgrim's Pride chairman of the board, remains active in operations and has appeared in countless advertisements over the years, making the company's brand instantly recognizable for millions of consumers.

 

Pilgrim's Pride's rise in the US industry chicken was marked by a series of acquisitions in recent years which enabled it to grow remarkably, according to News Journal, which traced the company's history from company records.

 

Pilgrim's Pride started as Farmer Feed and Seed in the late 1940s as a feed store managed by two brothers serving 100 area farmers in Pittsburg, Pennsylvania. The farmers would sell the grown chickens to the store which in turn sold them to local customers.

 

The business grew and in the 1960s, the Pilgrim brothers leased their first chicken processing plant in Mount Pleasant.

 

In 1969 the company purchased Market Produce in Fort Worth and the name of the company was changed first to Pilgrims Corp., and then to Pilgrim Industries Inc.

 

By the 1970s, growing and making acquisitions has become a regular fixture of the company. In 1986, the 40-year-old company became a publicly traded company listed on the New York Stock Exchange.

 

In the 1980s a marketing bid by the company for whole boneless chickens and boneless portions changed the way America sold and prepared chickens.

 

By 1996, the company had revenues in excess of US$1 billion but showed no signs of curbing its appetite for expansion, making more acquisitions along the way. One such acquisition was the purchase of WLR foods in 2001, which greatly expanded the company's marketing capability.

 

By 2002, the company was able to build a new 70,000-square-foot prepared foods distribution facility which gave it the ability to store and retrieve 30 million pounds of frozen poultry products.

 

The 2003 purchase of ConAgra's chicken division doubled its revenues from US$2.5 billion a year to US$5 billion.

 

Last year, it was successful the second time round in acquiring Gold Kist, the third largest chicken producer in the US. The acquisition helped Pilgrim's Pride, the then-second largest producer, to the top spot, dethroning Tyson Foods. 

 

Revenues at the company are currently US$7.4 billion annually.