Pilgrim’s Pride Ltd. joins UN Global Compact Network UK

It reported that significant inflation throughout the supply chain and lower pig prices meant results had been negatively impacted

Pilgrim’s UK registered an operating loss of £16m for the 2021 financial year in the face of “the most difficult” market conditions “ever faced by the UK pig sector”.

The JBS-owned supplier had reported a bounce back into the black in its previous accounting period – with operating profits of £10.3m in the 15 months to December 2020 – after several years of losses.

But amid a worsening crisis at farm level driven by labour shortages, a backlog of animals and rising production costs, Pilgrim’s slipped back into the red during the year to 26 December 2021.

“Significant inflationary headwinds with rising inflation throughout the supply chain, including feed, ingredients, labour, packaging and utilities, have impacted the result,”  the supplier said in a statement.

The pork giant saw sales volumes climb by 3% compared with 2020. However, like-for-like revenues fell by 1%, from £1.06bn to just over £1.05bn, due to the sector’s lower pig prices in the UK and lower export and EU prices.

But despite these challenges, the supplier insisted it was “progressing well” with a business recovery plan, with president Ivan Siqueira, who joined the business in January, now leading an “evolved business structure” centring operations on three business units – Agriculture, Fresh and Added Value.

This ensured “ongoing exceptional service to its customers” that drove “operational excellence, while continuing to provide the highest-quality food to the UK market”, Pilgrim’s claimed.

The creation of the new Pilgrim’s Shared Services business – which leveraged the scale of US parent company Pilgrim’s Pride’s UK operations to provide cross-functional support to Pilgrim’s UK, Pilgrim’s Food Masters and Moy Park – was also hailed as a positive move that bolstered the company’s performance.

These measures had “begun to deliver results”, with revenue expected to grow in Q3 2022, the supplier said.

However, it warned the pig sector “continues to face ongoing challenges from rising feed and energy costs, which have been accelerated by the war in Ukraine, and Pilgrim’s UK will continue to identify ways to deliver further operational efficiencies”.

In 2021, Pilgrim’s also “continue[d] to invest in future operations with the acquisition of Randall Parker Foods, which has enabled the launch of Pilgrim’s UK Lamb, bringing the business’ lamb operations into a single integrated supply chain”, it pointed out.

The business also supported its group of over 1,000 farmers, it stressed, including working with retail partners “to ensure British farmers are paid a fair price”. This work resulted in more than £35m being pledged in support, it said.

Meanwhile, the suppliers recently announced plans to invest more than £10m into sustainability projects across its operations over the next 12 months – forming part of Pilgrim’s Pride’s global $1bn sustainability investment across its worldwide operations.

“Market conditions in 2021 and the first half of 2022 were the most severe the sector has known, and conditions remain challenging,” said Siqueira.

“In the face of these challenges, our commitment to backing British farmers and delivering the highest quality and most innovative food to our customers has been unwavering,” he added.

“To enable us to deliver, we have evolved, diversified and invested in becoming the best and most sustainable food business in the UK and will continue to identify ways to operate even more efficiently and effectively.”