SPRINGDALE, ARK. – Tyson Foods Inc. set aggressive production goals during its Dec. 9 virtual investor day conference. Specifically, the company is targeting having 50% of its volume be value added by the end of fiscal year 2024. In fiscal 2021, value-added production made up 47% of volume.

Goals are good, but meaningless without the investments needed to achieve them. Tyson Foods plans to invest $1.8 billion to expand processing capacity.

“Using 2021 as a base, we have set volume targets across our company, which are ahead of projected market growth,” said Donnie King, president and chief executive officer. “Overall, we expect to grow our total company volume at 2% compound annual growth rate over the next three years, which will be roughly two-times the rate of expected protein consumption growth. Outpacing the market will require investing in brand and product innovation, expanding our capacities, improving capacity utilization and implementing our automation road map to alleviate labor challenges.”

Tyson Foods defines value added as all sales from the Prepared Foods business unit; fully cooked, fry, rendering, and air-chilled chicken sales from the Chicken unit; case ready and premium program sales from the Beef and Pork segments; and all sales in the International reporting unit.

“To achieve our objectives of outpacing the market while we deliberately shape our portfolio for margin and return, innovation will be key,” King said. “Our branded business is an important area of focus for us across the enterprise. We have a strong portfolio of brands with leading share positions in their categories, which support share gain and pricing power relative to our competition.”

Twelve manufacturing plants are expected to open over the next two years to increase capacity by 1.3 billion lbs, according to the company.

“We're adding seven fully cooked chicken plants in our International business, with six plants targeted for Asia to drive a 30% increase in capacity in that business,” King said. “We’re also adding two case-ready beef and pork plants that will result in a 40% increase in that specific capacity type over the same time frame.

“We’re also addressing some critical capacity constraints in Chicken, where we added harvest capacity in Humboldt, Tenn., and announced a new fully cooked facility in Danville, Va. We’ve been at 100% capacity across our fully cooked assets, so the investment in Danville will allow us to better meet consumer demand there. Finally, we’re building a new plant to address a capacity constraint in bacon in our Prepared Foods segment.”

Poultry operations in China, Europe, Thailand and Malaysia are estimated to be online by fiscal year 2023.  For its case ready business, Tyson added two beef and pork plants in Eagle Mountain, Utah and Columbia, SC.

Tyson Foods also plans to invest $1.3 billion in automation over the next three years to improve operations and reduce vulnerabilities to labor shortages.

“Automation will play an increasingly important role in our future,” King said. “Our goal is to combine operational scale with automation and real-time analytics to drive competitive advantage. Today, across the organization, we have open front-line roles, many of which are harder to fill. So, we plan to use automation to reduce the number of hard-to-fill roles.”

A key automation initiative will be to automate chicken deboning.

“This plan will help solve for one of the most labor-intensive processes and highest turnover areas across all harvest facilities,” said David Bray, group president of poultry. “With capital investment of nearly $500 million through fiscal 2024, we will automate 88 front half debone lines and 13 dark meat lines. We will not only provide greater consistency in product quality, but also generate labor savings equivalent to over 2,000 roles.”

Innovation in Prepared Foods also will propel Tyson Foods to meet its value-added volume goal. Initiatives include moving such brands as Jimmy Dean and Hillshire Farm into new categories.

“Jimmy Dean is the undisputed share leader in frozen protein breakfast, and we're always looking for ways to address new consumer needs where Jimmy Dean's trust and credibility can unlock new opportunities,” said Noelle O’Mara, group president of Prepared Foods. “This could be making favorite QSR (quick-service restaurant) items more convenient at home, like the breakfast burrito that’s seen phenomenal success. Or more recently, how we’ve broadened our frame with launches like breakfast nuggets, which nudged the brand into adjacencies.”

O’Mara added that in 2022, Tyson Foodservice will align its pizza portfolio under the Hillshire Farm brand and launch innovation that delivers attributes that will help foodservice operators differentiate.

“We are working to enhance our portfolio and capacity to better serve demand,” King said. “This includes increasing the relative contribution of branded and value-added sales to our overall mix. By focusing on our product portfolio and by adding capacity to meet demand, we expect to outpace the market.”