February 9, 2016 Clint Rivers Chief Operating Officer

Clint Rivers
Chief Operating Officer
February 9, 2016
"This is a confidential business communication. Reproduction, distribution, or other use of this communication
by persons not employed by Wayne Farms LLC or its subsidiaries and affiliates is prohibited."
1
Company Overview
•
•
•
•
•
Since 1965
•
$2.2B sales/ 2.5B live lbs.
9,000+ Employees in the U.S.
6th largest chicken producer (5.4% share)
Vertically integrated
Deboned Products: Boneless Breast and Boneless Thigh
Meat for further processed production.
Further Processed Products: Marinated, Breaded, Cooked,
Individually Frozen products
2000
1967
1976
1994
Pendergrass, GA
Decatur, AL
Enterprise, AL
2012
Poultry Div of CGC
named Wayne Farms
Dothan, AL
1965
1970
1978
1998
2006
CGC acquires 51%
of Allied Mills and
enters poultry under
Wayne Farms name
Danville, AR
Dobson, NC
Decatur FP East
Decatur FP West
2
Continental Grain Company
•
Privately held with a commitment to investing back in the
business
–
–
Since 1813
–
Wholly-owned subsidiary of Continental Grain Company
(CGC), which was founded and continually held by the
Fribourg family since 1813.
Continental Grain Company is dedicated to working with its
existing agricultural businesses pursuing strategic
opportunities in protein-based businesses while taking
advantage of new investment opportunities.
Significant holdings in Asia, Latin America, and the U.S.
– 1813: Founded by Simon Fribourg as a grain trading firm based in what is now known as
Arlon, Belgium
– 1940: Relocated to the United States with invasion of France at outbreak of WWII
– 1964: First major U.S. grain sale to Soviet Union…one million tons followed in 1972 with 10
million ton sale
– 1965: Acquired 51% of Allied Mills, entry into poultry with Wayne Farms line of products
– 1979: Opened first foreign-owned feed mill in China, joint venture with Charoen Pokphand
3
Delivering Quality Brands
to the Food Industry
Fresh Poultry
•
•
High quality, farm-fresh, commodity poultry…handdeboned…cook and serve convenience
Premium line available…hand selected, graded and
trimmed.
IF, Par Fried and Fully Cooked Poultry
•
•
Starting with the finest quality fresh poultry
On trend products that appeal to foodservice
patrons
4
Products To Meet Industry Needs
Fresh
IF
Par Fry
Fully Cooked
5
All Plants Canadian (except Laurel) and Mexican Approved
(Not availabilities)
Decatur AL ~ 1976
Fresh Processing ~ P-1235
Live weight: 9.0+
Breast Meat
Whole Wing
Split Wing
Thigh Meat
Tenders
Dobson, NC ~ 1978
Fresh Processing ~ P-445
Live weight: 9.0+
Decatur AL ~ 2006 (West)
Decatur, AL ~ 1998 (East)
Further Processing
(See separate page)
Drummette
Midjoint
Bulk Drums
8/5 Drums
HALAL Available
X-Ray Capable
Albertville, AL ~ 1963
Fresh Processing ~ P-1317
Live weight: 9.0+
Breast Meat
Whole Wing
Split Wing
Tenders
Whole Breast (Back-in)
Categorized Breast Meat (X-Ray)
Super Trim Thigh Meat 98% Fat Free
Leg Meat (Sknls/Skin-on)
5# up WOG
Bulk Drums
Breast Meat (incl. Platinum Harvest)
Whole Wing (incl. Platinum Harvest)
Split Wing (incl. Platinum Harvest)
Thigh Meat (incl. Platinum Harvest)
Printed Bag Breast Meat Net Wt.10#
Plat. Harvest Printed Bag Brst Mt Net
Wt.10#
Super Trim Breast Meat 98% Fat Free
Leg Meat
Bulk Drums
8/5 Drums
HALAL Available
Pendergrass, GA ~ 1967
Fresh Processing & IF ~ P-170
Live weight: 9.0+
Breast Meat
Whole Wing
Split Wing
Thigh Meat
Tenders
Danville, AR ~ 1970
Fresh Processing ~ P-1009
Live weight: 9.0+
Breast Meat (incl. Platinum Harvest)
Whole Wing (incl. Platinum Harvest)
Split Wing (incl. Platinum Harvest)
Thigh Meat (incl. Platinum Harvest)
Tenders (incl. Platinum Harvest)
Leg Meat (incl. Platinum Harvest)
Platinum Harvest Breast Meat (All is X-Ray)
Platinum Harvest Super Trim Breast Meat 98% Fat Free
Drummette
Midjoint
Bulk Drums
8/5 Drums
6# up WOG
HALAL Available
ALL BREAST MEAT IS X-RAY
Laurel, MS ~ 1957
Fresh Processing ~ P-519
Live weight: 9.0+
Breast Meat (incl. Platinum Harvest)
Whole Wing (incl. Platinum Harvest)
Split Wing (incl. Platinum Harvest)
Thigh Meat (incl. Platinum Harvest)
Tenders (incl. Platinum Harvest)
Leg Meat (incl. Platinum Harvest)
Platinum Harvest Super Trim Breast Meat 98% Fat
Free
Slitter Breast
Drummette
Midjoint
Bone In Thigh (limited)
Whole Leg (limited)
8/5 Whole wings (retail UPC bag)
Bulk Drums
8/5 Drums (retail UPC Bag)
6# up WOG
HALAL Available
Dothan, AL ~
Live weight: 9.0+
Front Halves
Whole Legs
Backs
Enterprise, AL ~ 1994
Fresh Processing ~ P-7485
Live weight: ~4.75
Whole Wing
Split Wing
3.5 Up WOG’s
Bulk Leg ¼’s
HALAL Available
Categorized Breast Meat
Graded Breast Meat
Split Tenders
Drummette
Midjoint
Bulk Drums
8/5 Drums
HALAL Available
Union Springs, AL ~ 1961
Fresh Processing ~ P-912
Live weight: 8.0+
Breast Meat
Whole Wing
Split Wing
Thigh Meat
Tenders
Drummette
Midjoint
Leg Meat
Bulk Drums
8/5 Drums
Gizzards
HALAL Available
X-ray Capable
6
Industry Overview
Top 10 Producers
(in mm lbs RTC poultry)
Rank
#1
#2
#3
#4
59
56
#5
#6
#7
48
43
41
#8
#9
#10
24
24
21
168
138
Rank
#11
#12
#13
#14
#15
#16
#17
#18
#19
#20
#21
#22
Source: Watt Poultry.
Company Name
George's
Keystone Foods
Case Foods
Amick Farms/OSI Group
O.K. Industries
Mar-Jac Poultry
Simmons Foods
Fieldale Farms
GNP Company
Claxton Poultry Farms
Harrison Poultry
Allen Harim Foods
mm lbs
19.6
18.4
16.7
15.5
14.7
13.8
13.3
13.0
8.0
7.9
5.5
5.2
Rank
#23
#24
#25
#26
#27
#28
#29
#30
#31
#32
#33
#34
Company Name
Golden-Rod Broilers
Farmers Pride
Holmes Foods
Miller Poultry
Gerber's Poultry
MBA Poultry
Gentry Poultry
Hain Pure Protein
Murray's Chickens/MB Food
Empire Kosher Poultry
Agri Star Meat & Poultry
Eberly Poultry
mm lbs
3.1
2.8
2.2
1.7
1.5
1.3
1.0
1.0
0.8
0.8
0.3
0.1
7
Poultry Industry Production Levels
8
Consumption
20 14
20 15
(p )
20 16
(p )
20 12
20 13
20 10
20 11
20 08
20 09
20 06
20 07
20 04
20 05
20 02
20 03
20 00
20 01
million tons
U.S. Broiler Production and Consumption
19
18
17
16
15
14
13
12
11
10
Production
Source: USDA/FAS
9
19 60
19 65
19 70
19 75
19 80
19 85
19 90
19 95
20 00
20 01
20 02
20 03
20 04
20 05
20 06
20 07
20 08
20 09
20 10
20 11
20 12
20 13
20 14
20 15
(p )
k i l og rams
U.S. Per Capita Broiler Consumption
50
45
40
35
30
25
20
15
10
5
Source: USDA
10
U.S. Consumer Poultry Consumption
2015 Poultry Study
11
12
Percent of Birds by Live Wt. Category
13
U.S. Broiler Exports - A Changing Landscape
ROW
36.1%
Russia
20.5%
ROW
48.6%
Mexico
21.6%
Cuba
4.1%
=
Iraq
4.5%
Hong Kong
4.6%
2009
Mexico
10.4%
China
19.9%
Hong Kong
9.9%
Cuba
3.5%
Angola
4.7%
Taiwan
5.8%
Canada
6.0%
Jan-Nov 2015
In 2009, China and Russia comprised over 40% of U.S. total broiler exports; now they
are no longer among the top export markets.
14
U.S. Broiler Exports Since 2000
5.0
4.5
$5.0
Quantity (left axis, million tons)
Value (right axis, billion US$)
$4.5
$4.0
3.5
$3.5
3.0
$3.0
2.5
$2.5
2.0
$2.0
1.5
$1.5
1.0
$1.0
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
(p )
4.0
Exports in 2015 declined by 16% in volume and 28% in
value from 2014 due largely to the HPAI issue.
Source: USDA/FAS
15
U.S. Turkey Prices ($/lb del)
16
U.S. Shell Eggs ($/dozen)
17
2015: Avian Influenza
•
•
•
AI is introduced into the U.S. by wild
waterfowl migrating from Canada
beginning in the Fall. Waterfowl are
not affected by the virus but carry it
to feeding grounds along four
flyways.
The virus is then picked up by contact
with animals, humans, vehicles, farm
equipment, etc. and deposited within
farm environments where poultry can
become infected.
In 2015, 232 poultry premises were
impacted in 21 states. 7.5 turkeys and
42.1 egg-layer and pullet chickens
were depopulated.
In 2015, 49.6 MM birds were euthanized as a response to the
largest High Path AI outbreak in the poultry industry’s history.
18
2016: Avian Influenza Update
•
2015
– H5N8/H5N2
– Export restrictions (0.5 MM tons of volume
opportunity lost)
•
2016
– First outbreak of HPAI (H7N8) discovered in
Indiana
– 62,109 HPAI birds depopulated in 10km
control zone; 352,394 LPAI birds
– Control zone expanded to ensure no
positive LPAI/HPAI samples
– As of 2/1/16, all sampling returned
negative presence of the virus
Strict adherence to biosecurity protocol is the best defense against a
repeat of 2015
19
20
Megatrends:
“Where does my food come from?”
Consumers are interested yet misinformed
78%
believe chickens are genetically
modified
77%
believe chickens contain added
hormones or steroids
73%
believe antibiotics are present in
chicken meat
68%
believe most chicken raised for
meat are raised in cages
animal welfare
natural
humanely raised
cage free
free range
antibiotic freeresponsibly raised
gmo free
no human antibiotics
local
no hormones
Flock health has never been better
21
Modern Housing
Key to Improved Animal Welfare
Modern Housing
Key to Improved Animal Welfare
22
23
24
Where Does Our Food Come From?
Transparency With Our Customers Is An Ongoing Initiative
25