ZA
A vertically integrated poultry business controls multiple stages of the chicken production process, from breeding and hatching to raising chickens, processing the meat, and distributing or selling the final products.
Specifically, a vertically integrated chicken operation typically involves (but is not necessarily all):
Breeding farms are places where breeder chickens are raised to produce fertile eggs for hatching chicks.
Hatcheries: eggs from breeding farms are incubated and hatched into chicks.
Grow-out farms: where the chicks are raised to market weight for meat production.
Feed mills: to produce specialised feed for the chickens at various growth stages.
Processing plants: where mature chickens are slaughtered, slaughtered, cut up, and packaged as various meat products.
Distribution centres: from where the packaged chicken meat is distributed to grocery stores, restaurants, etc.
By owning and controlling all these vertically aligned operations, the company can ensure consistent quality, biosecurity, and supply chain efficiency from start to finish.
Supply of day-old chicks
Farming and/or growing (these are two different things)
Processing
Retail of fresh, frozen, and fried foods; further processing into schintels, burgers, etc.
Supply of feed and chemicals
Supply of equipment and materials
Business Model
Now it is not necessary to control all of the above. Your business model can differ, or you can create a co-op of different individuals, each covering a part or process in the supply chain. The fact of the matter is this: We need really good chicken farmers—I mean, ruthlessly efficient ones. Chickens are too expensive to farm in South Africa; the process needs to be streamlined. It is cheaper to import and pay duties than to manufacture locally; this has to change.
When I was working on my mini-congromerate. My "Chicken2Chicken" model looked like this:
Chicken-Chicken “Full Stack”
Instead of vertical integration, we borrowed a term from the programming world: "full-stack.” Vertical integration is too risky and expensive.
We are putting together an end-to-end chicken supply route from day-old chicks to fresh and friendly chicken retail with the goal of achieving the efficacy of vertical integration without the investment.
Here is my model:
Source: day-old chicks
Take them to the contract grower.
Slaughter and package
Operate two retail outlets next to each other, one for fresh and the other for fried chicken.
Poultry
