Dive Brief:
- Tyson Foods opened one of its most advanced manufacturing plants in the U.S., allowing the meat packer to expand capacity for chicken nuggets and other value-added products through the help of automation.
- The $300 million facility in Danville, Virginia, will produce fully-cooked Tyson brands including Any’tizers snacks and chicken nuggets. The plant, expected to employ 400 people, features automated case packing lines and high-speed robotic case palletizing units.
- The 325,000-square-foot factory is expected to produce 4 million pounds of protein each week when it reaches full capacity, according to a statement from local county officials. Tyson has committed to purchasing and using Virginia grown poultry for the operation, officials added.
Dive Insight:
Tyson's state-of-the-art plant opening comes after a series of facility closures as the meat producer looks to simplify operations and scale production of more profitable value-added products.
The company closed six chicken and two case-ready meat plants this year "to improve our capacity utilization and mix," President and CEO Donnie King said on a fourth quarter earnings call earlier this month, noting prepared foods "was the profit engine for the company last year."
The Daville plant, first announced in 2021, will use robots to turn meat into prepared foods. The plant will also make use of wearable armband devices to improve worker safety and productivity.
Additionally, metal detection, X-ray and vision grading will assist the product inspection process. Earlier this month, Tyson recalled around 30,000 pounds of dinosaur-shaped chicken nuggets after consumers reported finding small pieces of metal in the product.
“The combination of our team and technology at Danville will strengthen our ability to better meet demand for retail and foodservice fully-cooked Tyson brand products,” Wes Morris, Tyson group president of poultry, said in a statement.
The meat producer recently expanded or broke ground on other prepared foods facilities as it leans into the profitable food service segment. The company spent $83 million to expand a cocktail sausage manufacturing plant, and a $355 million bacon production facility in Bowling Green, Kentucky, is expected to be operational later this year. Tyson's CEO told investors this month that there are "a number of operations coming online outside the United States" as well.
However, as sales slow, Tyson is cutting back on future capital expenditures. In its recent earnings call, CFO John Tyson said the company reduced capital investment by $600 million in fiscal year 2023 "as we reacted to market conditions driving lower profitability and impacting our operating cash flow.”
