Dow Jones Newswires reports that Chief Financial Officer George C. White said in court papers filed Sunday that the cost of feed ingredients in 2008 increased to record amounts, while the price of poultry products decreased due to the economic downturn and oversupply in the industry. The combination resulted in a significant loss for Townsends, he said. The loss spurred Townsends to borrow more money, and the company ultimately defaulted on its debt. While two groups of creditors--lenders and noteholders--agreed to forgive the defaults, Townsends was required to pay fees and expenses, and the interest rates for its debt increased.
"All of this has increased the debtors' outstanding indebtedness beyond a manageable level," White said.
With feed costs increasing once again this year, White said Townsends needed more money, but lenders declined to provide the company more money outside of a bankruptcy proceeding. As a result, Townsends decided filing for bankruptcy was necessary to continue operating while exploring "strategic options," White said.
"The company's management and its Board of Directors determined that a Chapter 11 filing was a necessary part of the company’s restructuring,” said Frederick B. Beilstein III, CEO. “We believe that it will allow us to best serve our stakeholders, including our customers, our vendors and our employees.”
Townsends is reporting $131 million in assets and $127 million in debt as of Dec. 5. The company is seeking bankruptcy court approval to take out a $52 million financing facility. According to court papers, $12 million will be used to fund operations and cover expenses of its bankruptcy case, while $40 million will be used to refinance some of its pre-bankruptcy debt.
Sources: Dow Jones, Agriculture.com, Newark Post
Cargill awarded $3 million to upgrade Canadian plantThe Alberta Livestock and Meat Agency is providing Cargill Meat Solutions with a $3 million grant toward the $42 million upgrade at its High River plant. The operational efficiencies will help meet changing requirements for export shipping, the agency said in a release, with the potential for Cargill to triple its beef exports to Asia, reports the Calgary Herald.
The grant, from the federal-provincial growing forward program, will be distributed over two years.
Gordon Cove, CEO of the Alberta Meat and Livestock Agency, said the grant helps increase the province's competitiveness in global markets. The growing forward program is to invest $273 million between 2009 and 2013 into Alberta's agriculture industry.
Source: Calgary Herald
Sadler's reports 15% sales growth in 2010The growing popularity of barbecue across the U.S. in 2010 has boosted sales and distribution, announces Sadler's Smokehouse Ltd. Retail and club distribution has increased to more than 7,000 stores, and year-to-date sales of brisket, dinners and other Sadler's products are up 15 percent in this channel.
Traditionally a regional favorite in the south, smoked brisket is gaining popularity throughout the U.S. as consumers from coast to coast are adding it to their weekly menus. To meet the demand, the company has partnered with 15 of the top 20 U.S. grocery retailers, and five of the top six food service distributors in the U.S. As a result, Sadler's premium pit smoked, heat and serve brisket, pork and ribs are now available in 42 states, from Texas to Minnesota and California to Florida.
The company also recently added an online ordering capability to its website to meet demand for its pit-smoked brisket in outlying areas. Customers can visit www.sadlerssmokehouse.com to order.
"In the current economy, more people are dining at home, yet still want bold flavors and restaurant-quality meals that are quick and easy to prepare," said Greg Klein, Sadler's Smokehouse Executive Vice President of Marketing. "Sadler's authentic, pit-smoked meats offer the taste and convenience today's consumers want. That's been a key driver in bringing our products to states like California and Washington where they've never been before."
Sadler's Smokehouse Ltd.
Chik-fil-A spices up breakfastChick-fil-A is offering customers a new alternative to break-up their breakfast routine in 2011. On Jan. 10, the Atlanta-based restaurant chain will introduce a new Spicy Chicken Biscuit to its breakfast menu to complement the Spicy Chicken Sandwich Chick-fil-A added to its lunch and dinner menus in June.
The Spicy Chicken Biscuit features the chain's signature hand-breaded boneless breast of chicken seasoned with a fiery blend of peppers and spices, pressure-cooked in 100 percent refined peanut oil and served on a made-from-scratch buttermilk biscuit.
"Customers began asking for a spicy version of our hero breakfast offering, the Chick-fil-A Chicken Biscuit, as soon as our Spicy Chicken Sandwich hit menu boards in June, and the demand for spicy products in general continues to grow," said Woody Faulk, Chick-fil-A's vice president of brand strategy and design, who is responsible for the chain's menu. "The Spicy Biscuit will give our customers the option to start their day with something truly different, and certainly a whole lot 'hotter,' as we continue to expand and vary our breakfast menu. The Spicy Biscuit will give customers another reason to visit Chick-fil-A for breakfast – a day-part that continues to grow."
Faulk added that Chick-fil-A's new Spicy Chicken Biscuit also gives customers another option to break up the habitual breakfast routine. According to marketing research firm NPD Group, 48 percent of people say their breakfast choices are driven by routine, with "most consumers looking at breakfast as part of a ritual for getting started in the morning. It's the only meal when eating the same food every day is not only common but acceptable."
"Breakfast is an extremely routine-oriented day-part," Faulk added. "People typically travel to and from work the same way each day and they also tend to have a list of stops they frequent during the work week. Even more importantly, people are time-starved in the morning, so when they make a stop, they expect prompt, accurate and courteous service. Chick-fil-A continues to meet these needs with new offerings that appeal to a broader range of customers who may eventually make Chick-fil-A's breakfast a part of their morning routine."