Cranswick’s JSR acquisition takes industry further down integrated route

JSR has been one of the biggest names in the pig industry for more than four decades, during which time it has grown to become a leading supplier of pig genetics in the UK and beyond.

As such, of all the acquisitions and investments Cranswick has made to grow its pig business, the deal for JSR Genetics, announced in January, feels like its most significant yet.

This is not just an acquisition with an eye to expansion – it is a strategic move into a whole new and crucial area for the already highly integrated pig and poultry producer.

“This is very much a genetics play for us,” Cranswick chief executive Adam Couch told Pig World. “JSR produces 2,000 commercial pigs a week, but we already get the majority of those. It’s really about getting access to the genetics.”

He stressed it would be ‘business as usual’ for JSR’s existing customers, and highlighted Cranswick’s desire to invest in and grow the genetics business.

Business as usual

The deal covers JSR’s entire pig businesses, including pyramid and commercial units, artificial insemination studs and third-party finishing contracts.

It will include 1,000 nucleus and multiplication sows, 3,200 commercial sows and 2,000 third-party sows across 31 sites in total, including eight freehold sites, various rented sites and third-party operators.

JSR Genetics, which was owned by the Rymer family and was a long-standing supplier to Cranswick, is the exclusive distributor for Netherlands-based Topigs Norsvin’s genetics in the UK. Based in Driffield, it employs about 70 staff, who will be transferring to Cranswick and fulfilling their existing roles.

The other side of the business, JSR Farms, an integrated arable operation with more than 3,000ha in East Yorkshire, will stay with the Rymer family, with Tim Rymer at the helm.

JSR Genetics will remain as a separate entity, rather than being integrated into Cranswick’s existing pig businesses.

Mr Rymer said: “Cranswick is a highly successful local business with a proven track record for investment and growth. Customers can rest assured that JSR Genetics will remain committed to delivering the same high level of genetic improvement and service that has historically been achieved.”

He told Pig World the decision to sell was based on how the family want to take the business forward. “I have just turned 60. The next generation, my sons Ben and Josh, will come back into the farm business and they want to take it in a slightly different direction, with some ideas of their own,” he said.

“This opportunity came up and they said: “Well, after 67 years, it’s a good opportunity to get out of pigs and do something else.”

“It’s a fabulous business and, yes, I’m sad to think I am not going to be involved any more, but there is also a feeling of excitement, not just for JSR Farms mark II, but also for what Cranswick will do with JSR Genetics, because I think they’ll grow the business quite rapidly.

“Nothing will give me more pride than to look back in 10 years and see them being the dominant genetics player in the UK market.”

Pig crisis

He acknowledged that the pig crisis of 2022 had focused minds and made even the most successful pig businesses, like JSR, question their futures in the industry.

“That was a landmark year. We realised that through no fault of our own we lost a lot of money. It did leave a mark in your mind about how, so often, you are not in control of things.

“But we have had some fabulous years, profit-wise, since 2022 and it is so much better to have these conversations when you have had record profits, rather than sell when everything is very depressed,” he added.

“So, we are heading in a slightly different direction. Watch this space! Ben and Josh are very ambitious and I’ll still be there with a light hand on the tiller.”

Cranswick growth

While many independent pig businesses have been considering how much longer they want to brave the ups and downs of the sector, and whether they can invest sufficiently to deliver the efficiency and production standards required of them, Cranswick has been relentlessly investing to build its pig herd.

Acquisitions last year, including a 4,000-sow outdoor unit in East Anglia, took its sow herd to close to 70,000 head, producing about 34,000 pigs a week. It is now more than 50% self-sufficient in terms of processing its own pigs.

It intends to further increase its pig and poultry production with a proposed huge combined unit near Methwold and Feltwell, in Norfolk, although this remains the subject of a long-running planning saga, with no guarantees it will go ahead.

It is also investing heavily in its pork processing facilities with a view to improving efficiency and increase capacity.

As it continues to grow its revenue and profits – it is on course to surpass 2023-24 revenue of £2.6bn and profit of £158.4m – its hunger for growing its pig business seems insatiable. It would be a very big surprise if we are not to hear of further acquisitions by the end of the year.

Perfect fit

Mr Couch said JSR was a ‘perfect fit’ for Cranswick. “We have been close to JSR for a number of years. Geographically, they are very close and the Rymer family are well known to us over many years,” he said.

“It increases the scale of our indoor pig production, further securing supply for our customers’ pork requirements.

“The addition of an integrated pig genetics supply chain will allow us to drive ongoing improvements in production efficiency, meat quality, animal health and robustness for the long-term benefit of our customers and the UK consumer. The genetics side is not something we have had in our armoury before. This acquisition helps us to secure that genetic capability.”

Mr Couch said Cranswick believes the TN70 gilt ‘gives us access to the number-one breeding female, whether it be for outdoor or indoor pigs, possibly globally’.

He said JSR already supplies Cranswick with ‘a modest amount of its genetics’, but stressed that his company will continue dealing with other pig breeding and genetics companies, while JSR will continue supplying other customers, including processors.

“So, for any third-party producers, it is business as usual. If you are an independent producer or another pig business that uses JSR genetics, that isn’t going to change. The intent is not to change anything, but to add to it and put some more capital investment in and grow it as a genetics business in its own right,” he said.

“We have good form in buying already successful businesses, putting capital into them and growing them. We will look to invest further in the JSR operation over the next few years to grow it, both from an internal point of view, but also to maintain and grow third-party customers.”

Eating quality drive

A big driver in the deal for Cranswick is the work JSR has done on improving pork eating quality. It has teamed up with Dingley Dell Farm in Suffolk over the years to produce pigs with extra intramuscular fat to create marbling in pork, working with Cranswick on these products for its Sainsbury’s Taste the Difference lines.

Its commitment to eating quality includes running a taste panel, located near its head office in Southburn, to undertake research for retailers and food producers and test its products, and the establishment of the Yorkshire Wolds Cookery School in 2010.

“This deal gives us great access to expertise in producing that extra marbling product and influencing eating traits, which is something we are very excited about,” Mr Couch said.

“Eating quality has always been one of our key drivers. We’ve got those products out there over the years and it’s really important that we continue that investment in exploring how we can make pork yet more appealing to our end customers and the consumer,” he said.

The wider impact

The Hull-based company is clearly heavily committed to processing and sourcing pigs in the UK and is part of a supply chain that, generally, is now far more conscious of the fragility of the supply of those pigs than it was before 2021. And, of course, Cranswick has the financial clout to invest and the scale to spread risks.

The acquisition of JSR Genetics further reinforces its position as the dominant force in the UK pig supply chain and helps secure its future supplies of pork to the standard it desires.

According to Mr Couch, the move will also help boost overall production of British pork, reducing the UK’s reliance on imports.

But, as always where Cranswick is concerned, there are mixed opinions on whether this latest acquisition and its general direction of travel is a good thing for the industry, with some independent producers fearing their status in the sector is gradually being eroded.

“JSR comes with both production and genetics, and this takes Cranswick a few steps further into being a truly integrated operation, but it knocks out another independent producer,” said industry analyst Mick Sloyan.

“It gives Cranswick another chunk of very high-quality indoor production, and that genetic capability will, perhaps, help them get rid of the variability you sometimes see and find a breeding line that gives them the kind of quality they want.”

Industry consultant Dominic Charman said it would be ‘interesting to see how comfortable independent producers and other integrators will be in sourcing genetics from either their customer or competitor’.

“As farming businesses become larger, so does the disease risk,” he added. “AI has spread through some large businesses with more sites, providing more ‘entry routes’, although no doubt Cranswick will have factored this risk into such a strategic acquisition.”

Another industry figure described the acquisition as ‘sad, but inevitable’. “Of course, JSR is a family firm – and it’s totally their choice if they want to get out of pigs,” he said.

He added that the supply chain had learned from ‘years of boom and bust’ and companies, also including Pilgrim’s, albeit with a different approach, were trying to enter into longer-term arrangements to secure their provision into the abattoirs. He predicted more independents would ‘get picked off over time’.

“The world will be poorer for it. But it seems to be the modern way and, to a certain extent, it is the only way you can combat the power of the supermarkets,” he said.

Mr Couch said his company’s ongoing investment was helping to secure the future of British pig production. “Over the past few years or so, we have been looking to expand, not just our production, but also the wider production base with third-party producers.

“The UK pig sector has come through a very difficult period, but we’re very positive about the future. If we can keep pressing ahead, improving productivity and the availability of British pork and increasing consumption of British pigmeat with a focus on eating quality, we can make British pork more sustainable, and reduce the UK’s reliance on imported product.”