Tyson Foods executives’ presentations at the Consumer Analyst Group of New York conference (CAGNY) Feb. 20 made one thing clear – while Tyson Foods’ core business may be in meat proteins, management views Tyson as a food company. They explained the company’s strategy as an enterprise focused on accelerating growth in a variety of categories outside the meat space.
“We play across beef, pork, chicken, of course,” said Thomas Hayes, president and CEO, during the company’s presentation. “We are also playing across plant-based protein. You’ve seen a lot of that, and I’m sure there’s going to be some questions about it. But we are openly disrupting ourselves to continue to drive to the next level of improvement and next level of advantage for us and our shareholders.”
Sally Grimes, president of Tyson Prepared Foods, said the business unit’s operating margin during the first quarter of fiscal 2018 was 11.9 percent, ahead of the same period last year and the highest on record for the segment.
“Prepared Foods is over an $8 billion value-added food business, growing volume double digits and expanding operating income percentage,” she said. “Just four years ago, this was a $3.3 billion business with 3 percent margin that generated about 7 percent of Tyson’s EBIT. Today, it’s over 25 percent of total Tyson EBIT. So Prepared Foods is helping transform Tyson through the stability and higher-margin profile of this brand-centered, value-added business. To maintain the Prepared Foods momentum, Grimes outlined how the company tiers its innovation process and how management is looking beyond meat and into new categories. Three objectives for the company’s Prepared Foods management team is to modernize Tyson’s billion-dollar brands, create the next iconic brand, and identify new growth models.
Innovation on tap from the company’s largest brands include Jimmy Dean Eggwiches, which Grimes called Tyson’s “breadless breakfast platform.”
The company also will be adding a morning snack to the Jimmy Dean line this year.
“(These are) hard-boiled eggs, natural cheese and Jimmy Dean meats,” Grimes said. “They require no prep, and they deliver over 50 grams of protein.”
Tyson Foods introduced Jimmy Dean Simple Scrambles in 2017 and the velocity of the items was 50 percent higher than the company’s forecast, according to the company. In 2018, Tyson Foods will be extending the line with the introduction of Egg White Scrambles.
Businesses under Tyson’s “creating tomorrow’s iconic brands” tier include Aidells sausage, Hillshire Snacking and Golden Island meat snacks. Grimes said Hillshire Snacking generated $100 million in sales at retail and the company will introduce an “upscale fondue experience” under the banner in 2018.
“Now a key reason that Hillshire Snacking has been so successful is that it offers an experience beyond what you’d expect from a snack,” she said.