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Cherkizovo Q1
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on May 3, 2016

Pilgrim’s entering organic chicken market

Company is converting one of its complexes to produce USDA-certified organic poultry

Pilgrim’s is in the process of entering the organic chicken market, as the company’s CEO announced the company is converting one of its complexes to produce USDA certified organic chicken.

The company has not yet released which complex is being converted, but Pilgrim's CEO Bill Lovette said he expects the conversion to be completed “some time in 2017.”

“We believe this is a game changer for our portfolio and signifies our commitment to satisfy evolving needs of our customers and consumers,” Lovette said during the company’s recent quarterly earnings call.

Organic poultry demand growing

Lovette said there has been “fairly tepid growth” for the demand of traditional chicken over the past few years, but customers of Pilgrim’s have seen an increased demand for antibiotic-free and organic chicken.

Presently, he estimates only about 2 percent of chicken produced is organic, but there is an incredible potential for growth.

“Our key customers in conversations with us as a key supplier have told us that their business continues to grow in organic chicken consumption,” he stated. “In support of our key customers, we decided that the time was right for us to enter this market. We think that we can be the best producer of ... USDA certified organic chicken and we are excited about the prospects of growth. If you look at the two categories of chickens that are growing, its antibiotic-free and organic.”

Pilgrim’s share of antibiotic-free poultry market to grow

Lovette said once the conversion is completed, he expects the company to be responsible for about 20 percent of total organic production in the United States, and possibly slightly more than 20 percent.

Pilgrim’s not only plans to gain a significant share of the U.S. organic poultry market, but also is looking to increase its share of the U.S. antibiotic-free poultry market to more than 25 percent by the end of 2018. He estimates that the company presently has about 10 percent of that share.

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