“In fact, we’re going the other way,” Smith told MeatPoultry.com. “As our customers face these tough economic times, they’re looking for ways to add value into their business.”
Smith provided an example of one new product development project currently underway. “We’re developing a new retail line of chicken products that have a fairly low entry ring, a value-type product,” he said. “It’s an excellent-quality product, but it uses ingredients and packaging that allows us to have a lower entry point. It’s a great idea. It certainly helps new consumers to enter that value-added category.
Many of Tyson’s quick-service restaurant customers are featuring chicken items, perhaps because grinds are so high-priced, Smith said. “We have a lot of interest from some retail and foodservice customers in using chicken as a meat block in a traditionally non-chicken product for offerings like sausages, lunch meat, deli meats,” Smith said. “We have great opportunities there. Our Discovery Center is very busy. That’s an area of our business where we think we add not only a competitive advantage, but a significant advantage for our customers.
Tyson Foods is not cutting back on marketing, R&D or any such efforts that long-term help it to drive a successful business by adding value to its customers’ business, Smith iterated. “[Adding value to our customers’ business] is what we do, that’s in our wheel house,” Smith added.
Tyson’s value-added efforts are increasing in its beef business, as well. Creating value-added items in beef is done by ensuring waste is taken out of the entire system by making products such as more portioned Flat Irons, briskets or super-trim tenders, Lochner said.
“The key component is always having enough processing capabilities [in-plant] to take that to a higher level of net revenue,” Lochner said. “The current prices are below the five-year average on middle meats, which shows we have more demand for value cuts and ground beef. I think that will be a continuous trend and the opportunity on the beef side is to drive the maximum revenue for the overall animal. You look for ways to take waste from the system.”