Dive Brief:
- World’s largest meat company JBS plans to crack into the egg industry through a merger with a major South American producer.
- JBS said Monday that it acquired a 50% stake in Mantiqueira Brasil, one of the largest producers in South America with an output of 4 billion eggs per year. Control of the company will be shared with Mantiqueira founder Leandro Pinto.
- The meatpacker said the deal allows it to diversify its portfolio, which has grown to include seafood and alternative proteins in recent years. For Mantiqueira, the merger represents an opportunity to enter new markets and become a “significant competitor abroad.”
Dive Insight:
JBS is entering the egg market as prices in the U.S. soar due to widespread bird flu outbreaks that have limited the supply. Cal-Maine Foods and other egg producers have commanded significant profits as demand continues to outpace supply even amid higher prices.
“Egg consumption worldwide has shown consistent growth,” JBS Global CEO Gilberto Tomazoni said in a statement, adding that the investment in Mantiqueira “aligns with our long-term strategy, which includes diversifying our portfolio by entering new protein segments.”
Recently JBS has looked to expand its market share across protein categories with mixed success. The company shut down its U.S. plant-based protein brand Planterra in 2022, just two years after launching.
Despite the shutdown of Planterra, JBS hasn’t given up on investing in sectors beyond traditional meats like beef, chicken and poultry. The meatpacker last summer said it would invest $110 million Australian dollars — or roughly $73 million at the time of the announcement — into its salmon farming business in Australia.
JBS also is exploring opportunities in cultivated meat. In late 2023, the company began construction on the world’s largest lab-grown meat plant in San Sebastián, Spain.
The deal with Mantiqueira represents an area of opportunity to enter a market with consistently strong demand. Economists have long considered demand for eggs, a staple in American diets, to be “inelastic,” meaning consumers will continue to buy despite swings in prices.
Mantiqueira operates plants in six Brazilian states and employs 3,000 workers, according to the announcement. In addition to its namesake brand, Mantiqueira also owns the free-range egg line Happy Eggs and organic brand Fazenda da Toca. Happy Eggs is unrelated to free range egg producer Happy Egg Co. based in the U.S.
Combining with JBS gives Mantiqueria the chance to break into new markets outside of Brazil, including the U.S.
Márcio Utsch, chief executive officer of Mantiqueira Brasil, told Bloomberg it is prioritizing the U.S. market with hopes of producing cage-free eggs. JBS’ vast poultry infrastructure as the world’s largest chicken producer is expected to help ease the transition into new markets.
“We are ready,” Pinto said in a statement. “We are leaders in Brazil, and with JBS’s support, we will gain greater access to market opportunities and acquire the necessary expertise to become a significant competitor abroad.”