Cargill Expands Its Beef, Pork Operations With Latest Acquisition
America’s largest privately held business just got a little larger.
On Wednesday, Cargill signed an agreement to acquire Five Star Custom Foods, an agribusiness specializing in cooked meat products such as pizza toppings, a variety of soups, sauces and chili.
Terms of the agreement were not disclosed.
Five Star employs approximately 385 people between its Fort Worth, Texas headquarters and its second site in Nashville, Tennessee. Cargill will offer employment to all 385 workers, an aspect of the deal that Five Star president Jeff Bledsoe called “a ‘winning’ scenario for everyone involved.”
This marks the second Fort Worth meat processing operation that Cargill has purchased in the past four years. More recently, in March, the company acquired a ground beef processing plant in Columbia, South Carolina. According to Reuters, Cargill has been scooping up beef suppliers in reaction to the surging demand for premium hamburger, which was popularized by Five Guys, Shake Shack and other burger makers.
Nevertheless, the deal is a bit of a shift from Cargill’s strategy of shedding lower-margin businesses in favor of higher-margin operations, like aquaculture and food ingredients.
The Five Star purchase will also see the company re-expand its pork product offerings. Last July, Cargill largely exited the pork market with the $1.45 billion sale of its pork business to JBS USA Pork. The company’s deal with Five Star, however, should widen its footprint in the market after all of its fresh pork operations were sold off.
“Adding Five Star Custom Foods to Cargill’s protein business will provide us with new capabilities we currently do not have,” said Brian Sikes, corporate vice president of protein business, in a statement. Additionally, he noted the deal would allow the company “to be more nimble in our ability to meet the ever-changing needs of our customers and consumers in today’s fast-paced marketplace.”
On top of its two Forth Worth operations, Cargill also owns a cattle feed yard in Bovina, Texas, some beef and turkey processing facilities in the state, and a food distribution center in San Antonio.