BOCA RATON, Fla. – The question that has lingered since Tyson Foods acquired Hillshire Brands is what will the company do with the broad portfolio of brands once the merger and integration were complete? On Feb. 16 at the Consumer Analyst Group of New York conference taking place in Boca Raton, company executives opened up about future plans.
The company has a robust innovation pipeline, said Sally Grimes, chief growth officer and president of the company’s International business unit.
|Sally Grimes, chief growth officer and president, International|
“ … We are just getting started,” Grimes said during the presentation. “Since Tyson and Hillshire came together, we have expanded our new product pipeline from about a year and a half to a full 3 1/2 years out. So this means that we can increase our pace of innovation because we have a broader pipeline of options. Now, we feel great about these results, but it's the ideas and the initiatives behind them that are where the inspiration really lies.”
Concepts within the innovation pipeline will take Tyson Foods in many different directions. A focus on adding value to the beef, pork and poultry raw materials it produces will remain a priority. In addition, the company is focused on moving such traditional brands as Jimmy Dean, Hillshire Farm and Ball Park into adjacent categories.
In July, for example, a frozen stuffed hash brown product will be introduced under the Jimmy Dean brand. That same month Jimmy Dean will introduce a frozen frittata that will be marketed as a healthier handheld item and sold under the Delights sub-brand.
Grimes said both innovations capitalize on the morning snacking and brunch occasions.
The company also will focus on growing emerging brands, including Hillshire Snacking, Golden Island (jerky), Nature Raised Farms and Van’s. The portfolio of start-up brands, which also includes Nudges pet treats, had total sales of approximately $225 million in 2015, a 50 percent increase over sales in 2014, according to the company.
“ … The Tyson recipe is pretty simple,” Grimes said. “It's three ingredients: generating deep and real insight, applying that insight in new and remarkable ways, and executing with excellence at the speed of the market. So from our proprietary demand mapping to our custom innovation process and systems to our state-of-the-art research and development centers, we have a team and we have the tools that are among the best in the industry.”
|Andy Callahan, president of retail packaged brands|
Andy Callahan, president of retail packaged brands for Tyson Foods, said in an interview with Food Business News the emerging brands complement the company’s portfolio of leading brands.
“In some categories consumers want something unique and are willing to pay for it,” he said. “It brings something unique to consumers, whether it is a culinary experience or an attribute like GAP certified animal well-being. For us, emerging brands are in fast-growing categories but not fully scaled.”
Using snacks as an example, Callahan said a few years ago Tyson’s opportunity in the snack space was limited.
“Our portfolio was underdeveloped,” he said. “We bring in the Hillshire Farm brand and introduced a modified product relevant to the space.”
This summer Tyson will expand the Hillshire Snacking brand with the introduction of several new varieties, including rustic harvest, southern summer and Asian fusion.
Callahan said the same strategy has been applied to the jerky category.
“We learned people were looking for a more tender option,” he said. “We were able to take what we had in Golden Island and apply it to our insights.”
Another priority for the company will be to reinvigorate and refresh the Tyson brand. Grimes said the company plans to reclaim its origin story and use it as a springboard for the future.
“Tyson is a brand people trust, that people care about, and will come back to time and again,” she said.
With the refreshed Tyson brand platform the strategy is to leverage it with a concept the company is calling consumer fresh goods.
“Consumer demand is driving growth in fresh foods, where we have core capabilities and a big business today,” Grimes said. “And we have an opportunity to margin up our portfolio by adding value to our poultry, pork and beef businesses.
“So we have activated capabilities across our entire enterprise to create a platform that is branded, that is value-added and fresh, and the potential here is huge. We have an opportunity to create new value for one of foods’ largest categories, and with new value for the consumer comes new value for Tyson with pricing power, with higher margins and sustainable growth.”
The first innovation that will be launched under the refreshed Tyson brand and with the concept of consumer fresh goods in mind will be Tyson Tastemakers, which is a curated line of dinner experiences that may be made fresh at home. The Tastemaker project will enter a pilot stage later this year via ecommerce, Grimes said.
Callahan called the initiative a “launch and learn” and said it will bear some resemblance to such programs from Blue Apron or Hello Fresh. Initial culinary concepts available through the program include a garlic and herb boneless pork loin; ancho pasilla carne asada; Thai basil boneless chicken breast; tandoori chicken thighs; beef sirloin roast; pork carnitas tacos; and Korean steak tacos.
“The concept gives the consumer a quality fresh meat with unique culinary flavors that is ready for them to apply the finishing touches,” Callahan said. “It creates a quality experience for the consumer.”
To conclude Tyson Foods’ CAGNY presentation, Donnie Smith, president and CEO, noted that the company is different and “different is good.”
“ … The real magic to creating value there for the shareholders is this wonderful team that finds the capabilities and finds the potential in the capabilities that come natural within Tyson Foods,” he said. “And then finds a way to use those to find the consumer insights and then meet that consumer need in a very, very relevant way.”