Smithfield Foods: An Interesting Profile of a Growing Meat Company

Together with its subsidiaries, Smithfield Foods Inc. produces and markets fresh meat as well as packaged meat products within the US and internationally as well. It is a wholly subsidiary of WH Group of China and operates via five segments, which are Fresh Pork, Hog Production, Packaged Meats, International and Corporate. It is the world’s largest hog producer and pork processer and provides a number of fresh pork products such as loins, butts, ribs, picnics and also leaners like beef, hog and poultry products. Packaged meats are also produced, which includes bacon, boiled and smoked hams, hot dogs, sausage, deli, luncheon meats and canned meats.

Beginning

Joseph W, Luter and his son found the company in 1936 and it was known as the Smithfield Packing Company in Smithfield, Virginia. Not only does the company owns about 500 farms in the United States, there are almost 2,000 independent contract farms all around the country where the Smithfield pigs are grown. Other than the United States, the company has its facilities in Romania, Mexico, Poland, the UK and Germany. In 2016, the number of employees that were working for the company globally were around 50,200 and reported an annual revenue worth $14 billion. In 2000, Smithfield’s meat processing plant in Tar Heel, North Carolina was deemed as the world’s largest.

This facility is spread over 973,000 square foot and it processes about 32,000 pigs a day. Smithfield Foods was purchased by the WH group in 2014, which was then known as the Shuanghui Group. They paid $4.72 billion, which was more than the company’s market value. It was the largest acquisition of an American company by a Chinese one to date. After the acquisition of about 146,000 acres of land that belonged to Smithfield, the WH group, which has its headquarters in Luohe, Henan province, it became one of the largest overseas owners of farmland in the US.

How the Company Grew

The real growth of Smithfield Foods had begun in 1981 when it acquired Gwaltney of Smithfield. Between 1981 and 2008, the company continued to purchase over 40 companies, which included Eckrich; Farmland Foods of Kansas, Circle Four Farms of Utah, John Morell; Murphy Family Farms of North Carolina and Premium Standard Farms. The highly industrialized pig production of the company contributed to its growth. Thousands of pigs were confined in large barns, which were known as concentrated animal feeding solutions and the animals’ development was controlled from conception to packing.

As of 2006, approximately 15 million pigs were raised a year by Smithfield and it processed 27 million of them thereby producing over six billion pounds of pork. It produced about 4.7 billion gallons of manure in 2012. In 2007, Smithfield Foods was the top pig-slaughter operation in the US as it killed about 114,300 pigs a day. Along with three other firms, 56% of the cattle that was processed was also slaughtered by Smithfield until 2008 when it decided to sell its beef group. The products of the company are sold under a number of brand names like Eckrich, John Morrell, Smithfield, Cook’s, Krakus and Gwaltney.