Tyson boasts second-best quarter in history
Aug. 8, 2017
by Kimberlie Clyma
AdvancePierre acquisition promises to propel growth and profits for the company.
SPRINGDALE, Ark. – Tyson Foods Inc. reported its second-best quarter in company history with the release of its Q3 results on Aug. 7. The company’s total net sales grew 4.8 percent compared to third quarter of 2016, and every segment delivered volume growth.
“We’re nearing the end of a record fiscal year at Tyson,” President and CEO Tom Hayes said in a media conference. “We expect to deliver performance on top of that for 2018 because the global demand for protein is strong and we’re focused on delivering on the fundamentals.”
Tyson’s acquisition of AdvancePierre Foods Holdings, which was completed in June, positively impacted the quarterly results (although the Q3 results only included four weeks of AdvancePierre sales). The continued integration of the company over the remainder of the year should help Tyson finish its fiscal year strong, according to Hayes. “AdvancePierre has manufacturing and channel management capabilities that will propel profitable growth for the entire company,” Hayes said. “The continued integration of AdvancePierre will help the bottom line.
“We are closing in on another record year with every segment delivering volume growth as we continue to stay focused on delivering growth for customers by satisfying consumers appetites for proteins and fresh foods,” Hayes said.
Tyson’s focus on delivering fresh foods to consumers places a lot of emphasis on marketing branded products in the retail perimeter, in addition to merchandising to its foodservice customers.
“Capitalizing on fresh goods and consumer goods has shown us that the fresh retail perimeter is a place where we can win,” Hayes explained. “Tyson is a consumer fresh goods company. We know fresh foods, we know the consumers. And, we know about branding – whether it’s a consumer brand or customer brand and we’re focused on innovation in both.”
Included in that innovation is Tyson’s Tastemakers line. Originally marketed solely for e-commerce, the meal kit line is now being introduced at retail in Texas supermarkets and will continue its distribution around the country in the next year.
Meal kits are one of Tyson’s primary platforms that will continue to drive sales growth on the retail perimeter, Hayes said. “Our continued success relies on innovation on three platforms: Fresh meal kits and starters; fresh take on breakfast; and keeping the Core 9 fresh.”
Looking ahead to 2018, Tyson anticipates additional growth with an emphasis on value-added chicken and prepared foods, including the market obtained through the AdvancePierre acquisition.
On Aug. 2 the company announced corporate restructuring, the second since Hayes was appointed as president and CEO Dec. 31, 2016. As part of the most recent restructuring, group presidents have been tapped to lead the Beef, Pork, Chicken and Prepared Foods segments, with responsibility for growth strategy, execution and developing teams across product categories and customer channels. Sally Grimes will become group president of Prepared Foods, Doug Ramsey has been named group president of Poultry, and Noel White has been selected as group president of Fresh Meats (Beef and Pork) & International. Each will report to Tom Hayes, president and CEO of Tyson.
Hayes’ other direct reports will continue to include Scott Rouse, chief customer officer; Mary Oleksiuk, chief human resources officer; Scott Spradley, chief technology officer; David Van Bebber, general counsel; Dennis Leatherby, CFO; and Justin Whitmore, chief sustainability officer. George Chappelle, currently chief integration officer, will continue to lead the integration of the recently acquired AdvancePierre Foods business, then transition to the role of COO of the Prepared Foods segment, reporting to Grimes.
Monica McGurk, chief growth officer, and Andy Callahan, president, North American Foodservice & International, will be leaving the company.
“We don’t take the restructuring of our organization lightly. But this is going to a model that is the most effective for our business,” Hayes explained. “Number one is a flattening of the structure that we’ve had which allows us to focus resources within the segments that are externally reported. The acquisition of AdvancePierre has allowed us to reexamine how quickly we can move, how we are innovating, what kind of customer resources we have and what sort of channeling marking resources. Once the teams came through with that analysis it was clear that this was the best organization structure for the company moving forward.
“We looked at the acquisition of AdvancePierre as an opportunity to look at all our costs. As we looked at our structure we needed to streamline across the board and have all those segments reporting to the CEO,” Hayes continued. “It was really an effort to make sure we would be managing costs in the best way for our shareholders.”