Challenges of 2021

– Pilgrim’s UK recorded operating loss of £16 million in 2021
– Introduction of an evolved business structure and operating improvements delivering results
– Pilgrim’s UK has continued to support British farmers and invested in diversifying our business and progressing our net zero roadmap

Pilgrim’s UK has indicated that it is progressing well with a business recovery plan after recording an operating loss of £16 million for the year to 26th December 2021, according to our latest Annual Report and Accounts.

Under the leadership of President Ivan Siqueira, who joined the business in January 2022, an evolved business structure has been implemented, including centring operations around three business units – Agriculture, Fresh and Added Value – to ensure ongoing exceptional service to its customers and drive operational excellence, while continuing to provide the highest quality food to the UK market.

The business has also leveraged the scale of U.S parent company Pilgrim’s Pride’s UK operations through the creation of the Pilgrim’s Shared Services business, which provides cross-functional support to Pilgrim’s UK, Pilgrim’s Food Masters and Moy Park.

Market conditions in 2021 and early 2022 were the most difficult ever faced by the UK pig sector. Significant inflationary headwinds with rising inflation throughout the supply chain, including feed, ingredients, labour, packaging, and utilities have impacted the result. In addition, revenue was negatively impacted by lower pig prices (UK, Export and lower EU meat prices) meaning that, while the business saw volume growth of 3% compared to 2020, like for like revenue for the period fell 1%.

The measures put in place by the business have begun to deliver results, with revenue expected to grow in Q3 2022. However, the 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.

As both a producer and processor with the most integrated supply chain within the sector, Pilgrim’s UK is more invested in British farming than any of its competitors. Together with its key strategic customers, Pilgrim’s UK has continued to support its more than 1,000 farmers through these challenging times. In 2022 this included working successfully with retail partners to develop new ways to ensure British farmers are paid a fair price for what they produce, resulting in more than £35 million being pledged in support.

Despite the challenges of 2021, Pilgrim’s UK has continued to invest for the future, further diversifying its business with the acquisition and integration of Randall Parker Foods. This has now culminated in the launch of Pilgrim’s UK Lamb, bringing the business’ lamb operations into a single integrated supply chain.

Pilgrim’s UK has also remained focused on being the most sustainable food business and progressing its ambitious 2030 net zero roadmap. The business recently announced plans to invest more than £10m into sustainability projects across its operations over the next twelve months. The investment forms part of Pilgrim’s Pride own $1billion sustainability investment across its global operations, highlighting the additional strength afforded by Pilgrim’s UK being part of such a global network.

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

“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.”