Sanderson Farms CEO Joe F. Sanderson Jr. acknowledged that the company was considering repurposing one of its poultry plants to meet consumer demand shift away from the foodservice sector to the retail sector.
Sanderson, speaking during the company’s second quarter earnings call on June 18, said demand for its products “shifted among our customer base during the quarter as orders from food service customers decline dramatically due to home orders and widespread closures of restaurants and other venues where food is consumed away from home,” in response to the COVID-19 pandemic.
“At the same time, orders from our retail grocery store customers surged,” he said.
Sanderson said the company was able to shift production with less big bird deboning for the foodservice sector to more tray pack production for the retail sector.
When asked by Barclays analyst Ben Theurer if the company is considering repurposing an existing plant to accommodate the changes in product demand, Sanderson answered in the affirmative. However, Sanderson added, there are many factors to take into account.
“We have looked at two or three different scenarios about doing that, and we are still contemplating and looking at it. It's not an easy thing to do. Our plants are geographically located for the market the plants were built. Some of you have visited our plants and there is a huge difference in a deboning plant and a tray pack plant. It's doable, but it's not ideal, but we are looking at that,” said Sanderson.
“The plants are built the way they are and where they are for marketing reasons. And if you take one of those plants and convert it, you're going to give up that marketing reason and that's the dilemma and -- but we are looking at that very closely.”
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