Tyson Foods to sell four cold storage facilities for $247 million 

Tyson Foods is revamping its cold storage network and process which includes selling four of its cold storage facilities to Novi, Mich.-based Lineage and creating annual cost savings.

According to CEO Donnie King, Tyson will sell its cold storage warehouses located in Pottsville, Penn., Olathe, Kan., Rochelle, Ill., and Tolleson, Ariz., for an estimated $247 million. King spoke of the deal to analysts during the company’s earnings call on Monday (May 5). The total space being sold equals around 49 million cubic feet.

Tyson will transition as an anchor partner to Lineage, using three new large-scale automated facilities run by Lineage. Once the transition is complete, Tyson said it expects to save the company around $200 million annually.

King said the company has been optimized its plant network, primarily by closing older manufacturing and processing operations, over the past several years, and the next step in that optimization process deals with cold storage facilities.

“We’re taking deliberate, measured steps to evolve our logistics and distribution infrastructure. These efforts are at an early stage, but are critically important as we work toward greater long-term efficiency. We will sell multiple smaller, conventional cold storage warehouses and then transition as a new anchor partner into several large-scale, fully automated, next-generation cold storage facilities,” said King.

He said the new automated warehouses will reduce network complexity, streamline inventory flow and simplify processes in ways that will better position Tyson to service customers smarter and faster. King said the transition will be a multi-year process that is expected to be completed over the next five years.

“We are confident that these actions will lead to meaningful operational improvements, greater agility, allow future growth, and reduce future capital requirements,” King said.

Brady Stewart, chief supply chain officer and president of Tyson’s Prepared Foods, Beef and Pork segments, said the network now used is too complex and too costly. He said the new cold storage warehouses run by Lineage will be built to get Tyson’s products closer to customers and will reduce the number of miles transported. Stewart said the shift also will reduce the company’s carbon footprint.

Lineage will hire around 1,000 Tyson employees in the warehouses, and the transaction is expected to be completed this month. The new cold storage facilities Tyson uses will add more than 80 million cubic feet to the logistics capacity.

“This expansion signals what we see as the next evolution of cold chain operations and reflects the growing demand for smarter, more responsive supply chain networks,” said Lineage President and CEO Greg Lehmkuhl. “We’re creating more than cold storage infrastructure—we’re setting the foundation for agile, intelligent supply chains built for resilience and precision.”

Lineage operations include more than 485 facilities and more than 3.1 billion of cubic feet of capacity in North America, Europe, and the Asia-Pacific region.