Retail News Update

MUMBAI: Tyson Foods Inc, the world’s largest processor and marketer of meat products and the second largest food company in the US, is joining hands with Godrej Group for a poultry processing and marketing joint venture in India.

The US giant will hold a 51% stake in the joint venture while the rest will be owned by Godrej Agrovet, whose poultry business—including brands like Real Good Chicken and Yummiez—will be spun off into the new entity, industry insiders said.

The deal is likely to be finalised next month, sources said, adding that the venture will launch new processed and value-added poultry products. However, when contacted, a Godrej Group spokesperson declined to comment.

The $26-billion Tyson Foods is one of largest US marketers of value-added meat products to retail grocers, distributors and national fastfood and full-service restaurant chains. The listed company supplies all Yum! Brands chains that use chicken (including KFC and Taco Bell) as well as McDonald’s, Burger King, Wendy’s, Wal-Mart, Kroger, Costco, IGA, Beef O’Brady’s, small restaurant businesses and prisons.

The Rs 1,200-crore Godrej Agrovet is one of the largest producers and marketers of animal feeds and agri-inputs in India. The partnership will help it gain access to the global food processing and product development technology of Tyson Foods. For the Godrej Group, the move will help accelerate growth rates and also help tap the burgeoning market in modern retail and processed food industries.

The US major, in turn, will obtain an easy entry into the fastest growing emerging markets for chicken products. Tyson Foods is also looking at tapping the supply-chain and distribution strength of Godrej in the country.

The two groups already have a working relationship. Godrej Agrovet is the sole franchisee of Cobb-Avian, a subsidiary of Tyson Foods. Also, the chicken used in making Real Good Chicken comes from grandparent generation roosters imported from Cobb-Avian.

Godrej Agrovet had recently sold off a 70% stake in its rural retailing business, Godrej Aadhaar, to Future Group, the largest retail company in India. Based in Springdale, Arkansas, Tyson Foods annually exports the largest percentage of beef out of the US.

It is the second largest food production company in the Fortune 500 list. In 2001, Tyson Foods acquired IBP, the largest beef packer and number two pork processor in the US for $3.2 billion in cash and stock. In 2007, the company came in for a lot of criticism by PETA.