Investing in pet food
$30 million Simmons factory to bring 78 jobs to Siloam Springs.
The $30 million that Simmons Foods Inc. has invested in a new factory in Siloam Springs is consistent with the company’s recent moves to maintain its position in the pet and animal feed production market.
Simmons Feed Ingredients, an affiliate of Simmons Foods, held a ribbon cutting ceremony Monday for the 72,000-square-foot facility that will bring 78 new jobs. Of those positions, 44 are hired and working at the plant, said Donny Epp, spokesman for Simmons Foods. The facility will produce fresh and frozen meat ingredients for pet food manufacturers.
The privately owned company broke ground December 2015 and the project is supported by the Arkansas Economic Development Commission. For the project, Simmons qualified for two tax incentives: the Arkansas Advantage program, based on job creation and wage thresholds; and Tax Back program, based on building materials and taxable machinery purchases. Simmons also earned a $1 million grant from the commission supporting wastewater treatment operations at the new facility.
While many meat and retail companies are tweaking
food processing plants to produce new packaged products, companies such as Simmons are investing in pet food and animal feed production.
“Simmons is looking to strategically build where there’s opportunity,” Epp said.
Simmons declined to comment on whether its strategy is to invest further into pet food and animal feed production, or into products for human consumption. The company attributed its business diversification — Simmons Prepared Foods, Simmons Pet Food, and Simmons Feed Ingredients — for its ability to handle market peaks and valleys.
“With a project of this scale, obviously it has to make sense internally,” Epp said
Historically, the pet food industry has the advantage of being nearly recession proof.
According to the American Pet Products Association, Americans are projected to spend $69.36 billion on their pets in 2017, with about 43 percent going toward pet food expenses alone. Projected national spending this year is up 15 percent, or about $9 billion, compared to numbers from just two years ago.
More than two-thirds of American households today take care of just one pet, according to a national pet owners survey.
The Siloam Springs-based company began as a poultry company in 1949. The company’s feed ingredients group was established in the 1950s and its pet food group in the ’60s, Epp said. In the past seven years the company started shifting its focus more toward animal treat production.
Simmons Foods Inc. acquired Canadian-based Menu Foods Ltd. in 2010, which positioned the company as a leading supplier in store bought pet food. To keep its position, Simmons began producing more treats and dry pet food.
Bob Williams, senior vice president of Simmons First Investment Group, said this is a natural step for a poultry company to make. Poultry companies use chicken byproducts for pet food.
“They’ve done the math and figured they can make a profit this way,” he said.
As well as broiler chicken facilities, the private company has a feed mill in Fairland, Okla., multiple ingredient production facilities in Southwest City, Mo., and the pet food ingredient facility in Siloam Springs.