Perdue Farms to buy Chipotle pork supplier Niman Ranch

A scene from “The Scarecrow,” Chipotle’s 2013 video short. (YouTube)

Chicago | Reuters — Poultry company Perdue Farms will buy natural meat maker Niman Ranch, which is Chipotle Mexican Grill’s biggest pork supplier and a brand name on U.S. restaurant menus, the two companies said on Tuesday.

Privately held Perdue expects to “soon” close a deal to buy Natural Food Holdings, which owns the Niman Ranch brand, from private equity firm LNK Partners, according to a statement. Terms were not disclosed.

The deal marks the latest move by a big food company seeking to expand its presence in the fast-growing U.S. natural foods market. It risks displeasing some consumers, who are attracted to Niman Ranch’s reputation for working with independent farmers and raising animals without antibiotics.

Niman Ranch plans to continue producing animals in the same way after the deal closes, said Jeff Tripician, chief marketing officer. There is more opportunity for Niman Ranch to grow with Perdue than with LNK, he added.

The deal “will allow us to produce more pork of our quality,” Tripician said. “Whether that goes to Chipotle or Whole Foods or Sprouts or Vitamin Cottage or the great restaurants, that’s kind of an internal issue of what’s the right way to grow.”

This year, Niman Ranch ramped up shipments of pork to Chipotle when another producer ran afoul of the burrito chain’s animal welfare rules.

A Chipotle spokesman did not immediately respond to requests for comment about the sale.

Perdue, a supplier to Chick-fil-A restaurants, already produces antibiotic-free chicken and acquired Coleman Natural Foods in 2011.

“We understand and respect what Niman Ranch represents,” Perdue chairman Jim Perdue said.

Still, Niman Ranch received negative feedback on its Facebook page less than an hour after posting about the deal.

“Boo. Perdue’s reputation for chicken raising is less than stellar,” wrote a Facebook user identified as Brenda Whiting.

Natural goods stores represent one of the fastest growing areas of food retailing.

Sales at natural and organic retailers rose 9 percent in the past year, compared with a 1.3 per cent gain at supermarket chains and other conventional retailers, according to data from Spins, a market research firm that tracks data from store scanners.

In May, spam-maker Hormel Foods said it would buy the natural and organic meat processor Applegate Farms for US$775 million.

Last year, General Mills, the maker of Cheerios cereal and Betty Crocker cake mixes, said it would acquire organic food producer Annie’s for about US$820 million.

Tom Polansek reports on agriculture and ag commodity markets for Reuters from Chicago.

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