A new name appeared in the U.K. poultry industry this year: Avara Foods, a joint venture between the chicken, turkey and duck businesses of Faccenda Foods and Cargill U.K.’s fresh chicken business.
The 50/50 shared ownership business processes more than 4 million birds per week and is thought to be the U.K.’s third-largest producer of chicken.
Avara brings together Faccenda’s laying and breeding farms, hatcheries, two feed mills, grow-out facilities and six poultry processing facilities employing 3,600 people, along with its duck and turkey business, with Cargill’s laying and breeder farms, hatcheries, a feed mill, grow-out facilities and its three poultry processing facilities employing 2,500 staff.
Faccenda Foods Managing Director Andy Dawkins is the new company’s chief executive, while fresh chicken director with Cargill Meats Europe Chris Hall is Avara’s chief commercial officer.
Commenting on the creation of the new company, Dawkins said: “Launching Avara Foods brings together two successful businesses with high standards, shared values and strong reputations for building sustainable partnerships with customers, growers and suppliers. Our first step is to make sure that there is a smooth transition as we bring together the two businesses as Avara Foods, and establish a solid platform for growth.”
Building on investments
Over the past five years, the two companies have invested significantly through their respective supply chains, with a combined value of GBP75 million (US$107 million) on processing infrastructure. Now, however, forming Avara is seen as being the best way to expand growth in the local market, drawing on the two partners’ complementary customers and offerings.
Dawkins said: “If you look at how the retail sector has consolidated in recent years, and how this has been matched by the supply side, now is an obvious time to bring together two high-performing and well-regarded businesses.”
For Faccenda, the joint venture is the latest in a series of changes over recent years. The family-owned company, which reported sales of GBP523 million (US$735 million) last year, started as a single chicken farm in 1962 and has grown into a major U.K. food business.
In 2012, it bought the turkey producer Cranberry Foods and in 2015 added duck to its portfolio through the acquisition of Cherry Valley Foods, making it the country’s only supplier of chicken, duck and turkey.
Similarly, Cargill has been making significant investments in its U.K. poultry business, including expanding its processing facilities and its base of growers.
In late 2013, the company announced a GBP35 million (US$50 million) expansion and modernization program, which included not only capacity expansion, but also the modernization and upgrading of facilities. Most investment was concentrated at its Hereford site and focused on creating “one of the most efficient and competitive processing plants in Europe.”
Growth, not savings
The new company is about growth, Dawkins said, not cost savings, with Avara Foods bringing together two successful businesses with high standards, shared values and strong reputations for building sustainable partnerships with customers, growers and suppliers.
“Our aim as Avara Foods is to grow -- there’s no doubt about that. But our focus right now is ensuring that high standards are not missed – be it quality, delivery or customer service. Over time, we will integrate the businesses further and learn from each other. That process has already started and it's exciting to see what it leads to," Dawkins said. “Internally, if we can establish a culture that all our people relate to and feel part of, then we’ll have overcome the single biggest challenge in integrating any two businesses. What’s been great so far is that, culturally, we are already closely aligned.”
The new company is thought to have a particularly strong position in fresh and added-value product supplied to retail, with a 20-30 percent market share and to hold a similar position for these product categories supplied to the catering market.
Where its relationship with growers is concerned, there is a belief that the merged business will provide stability and security for growers for years to come, and the strong relationship with the growing community will be built upon.
It is a stand-alone business, and outside of the new joint venture, Cargill is continuing to process and sell cooked poultry products as well as operate its poultry import, trading and distribution business, along with its European poultry businesses in France, Russia and the Netherlands. Faccenda has retained its shareholding in Dartmouth Foods, entered into in 2016 for cooked poultry products.
Plans to merge the two businesses into Avara were first announced in late September 2017 and approved by the U.K.’s Competition and Markets Authority in December.
Investments at Cargill U.K.’s fresh chicken business have included a state-of-the-art chiller, in operation since 2015, which can handle up to 10,000 birds per hour. | Cargill
Cargill UK’s poultry plant expands capacity, efficiency
