Newly-instated Tyson Foods president Tom Hayes told investors at the Jefferies 2016 Global Consumer Conference in the US that the business had executed its strategy to focus on branded meat products well.
“We’re investing in our retail packaged brands, and we’re seeing the payoff,” said Hayes. “Weekly sales data show that volumes in key categories are gaining momentum.” Hayes cited the Ball Park hot dogs, Jimmy Dean breakfast sausage and Hillshire Farm dinner sausage meat products to have performed well recently.
This bodes well for the recently-inaugurated Hayes who has been tasked with ensuring Tyson Foods becomes a global leader in the production of branded meat products. Prior to his role as president, Hayes was instrumental in developing Tyson’s branded food offering.
Fundamental change
A key factor in Tyson Foods’ growing performance within this category over the last couple of years has been the result of secure margins in the chicken vertical, the company reported.
Noel White, president of Tyson’s poultry division, also addressed investors in Massachusetts and spoke about the need to develop a new business model. Tyson Foods, said White, was pushing change to the poultry business to secure adequate returns, even in times of market volatility.
“We’ve fundamentally changed how we operate our chicken business,” said White. “First, we optimised our cost structure. We’ve taken more than $1bn in inefficiencies out of the business since 2009.”
Continue to innovate
One way the business has been able to minimise volatility, especially in grain input costs, is by making use of a diverse range of customer pricing contracts. The business has also adopted a buy vs grow strategy of production that, according to Tyson Foods, is “significantly de-commoditising” the business.
“We strive to continually earn the trust of our customers that we will deliver for them, that we will innovate for them and that we will help them grow their businesses,” White added.