Editor's note: During the first day of CAGNY, one trend stood out above the rest: snacking. In the case of Tyson Foods which presented Tuesday, protein snacking is a natural transition. Following the presentation, executives from the company spoke to Food Dive about a range of topics.
The transition from a protein producer to a food company
Tyson Foods has transitioned from a protein producer into a food company,CEO and President Donnie Smith pointed out at the company's presentation. He mentioned the goal of higher, more stable earnings as part of this transition.
He said the company has a unique opportunity in that its diverse portfolio allows for constant interaction with consumers.
"We're a growth company," he told conference attendees. "We're built for growth."
Still, the company is protein-centric — a point emphasized during the presentation.
Andy Callahan, president, retail packaged brands,said that 54% of consumers are deliberately increasing protein in diet. He said meat is the most natural and authentic source of protein for today — a comment that comes as the meat industry faces intense criticism. His statement is in line with the Dietary Guidelines, but meat faces competition as other forms of protein have earned consumer attention and approval as being healthier.
Insistence on protein-centric — not meat-centric is Tyson's strategy around that competition. " … We could've put in that vision statement that we wanted to become the most innovative meat-centric company, but we didn't," Sally Grimes, chief global growth officer and president, international, told Food Dive. "We made a conscious choice to say protein-centric and that certainly opens up the aperture for opportunities in the future."
The company is growing where the leaders want it to, with long-term growth and margin potential. Up-and-coming emerging brands are making waves in the industry, at $225 million in sales today.
The growth of protein snacking
Innovation is spanning across categories — and Tyson is just at the precipice of further innovation, according to company executives. Their answer to innovation? Follow the consumer.
"Even when you sell to a business, satisfying the consumer is always the best starting point," Grimes, a 20-year industry veteran and chief global growth officer at Tyson, told attendees.
Grimes, who also worked at Kraft Foods came to Tyson Foods following its acquisition of Hillshire in 2014. Grimes said that the acquisition of the entrepreneurial Hillshire, where she served as chief innovation officer and president of its gourmet food group allows the newly absorbed company to enjoy larger industry resources.
With these resources comes the capacity for further innovation. Tyson Foods revealed a series of new products coming this year, in addition to what Grimes called an "enviable" protein snacking category. She also discussed iconic brand extensions into adjacent categories in 2016 for sectors like Jimmy Dean, Hillshire Farm, Ball Park, and Tyson.
According to Grimes, protein snacks are growing nearly twice as fast as total snacking. The company is pushing a differentiated portfolio in dried meat snacks and snack combos to capitalize on trends.
New product highlights include:
- July 2016 Hillshire Snacking extensions
- July 2016 Ballpark frozen expansion (bold-flavored meatballs; on-trend forms and flavors)
- July 2016: Jimmy Dean Stuffed Hash Browns (positioned as morning snacking, meal-on-the-go)
- July 2016 Jimmy Dean Delights Frittata
- September 2016: Tyson Naturals line (Keeping up with consumer trends, like gluten-free, ancient grains, whole gains, no antibiotics)
- September 2016: Tyson Naturals Grilled Nuggets (unbreaded, no antibiotics)
Bursting into e-commerce
From players like Alibaba to Amazon, Tyson Foods is gearing up for continued e-commerce growth in the food industry. Food and beverage e-commerce sales are expected to reach $12 billion by 2018, according to e-Marketer. In particular, the company announced Wednesday an extended partnership with AmazonFresh, in addition to new brand Tyson Tastemakers in the coming months (meal kit-driven, aimed at more pricing power and brand loyalty) that the company will pilot later this year. Grimes said the company wanted to leverage Amazon's logistics business rather than create something on its own.
Grimes spoke of e-commerce on a more macro level, naming new food distribution and access an overarching trend that will revolutionize the industry.
She added that e-commerce is a great opportunity for testing and learning through data. "We can very quickly understand what's working and what's not," she said
Harkening to its history
- New ad coming later this month: "Keep it real. Keep it Tyson."
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