- Tyson is "seeing the payoff" from its investments in producing and selling more retail packaged brands, Tom Hayes, Tyson's newly promoted president, told investors Wednesday at the Jefferies 2016 Global Consumer Conference.
- Hayes cited brands like Ball Park, Jimmy Dean, and Hillshire Farm as examples of brands gaining volume momentum, according to weekly sales data.
- Previously, much of Tyson's improved financial performance centered around higher, more stable margins in its chicken segment. But the company has since focused on enhancing its product mix with more branded, value-added offerings to de-commoditize the business, Noel White, president of Tyson’s poultry division, said at the conference.
Acquisitive growth has been central to Tyson's packaged brand efforts, as many of the momentum brands Hayes mentioned in his presentation were brands Tyson absorbed when it acquired Hillshire Brands in 2014. Tyson may continue to focus on innovations within these brands and its own portfolio.
But continuing an acquisitive approach makes sense as more protein-related startups hit executives' radars and align with Tyson's protein-centric mantra. Tyson would add fast-growing protein brands to its portfolio. It could also gain insights into startups' approaches to innovation, marketing, and consumer engagement, which could refine the strategies Tyson uses for its existing brands.
A focus on snacking and convenience has led to a number of packaged food products debuting in the coming months, such as Hillshire Snacking extensions and Jimmy Dean Stuffed Hash Browns. Developing and positioning products as snacks that serve as meal replacements is a way for Tyson products to become a viable option for just about any eating occasion and time of day.
Tyson will also continue to see a boost for its packaged foods brands if its e-commerce strategies pan out. That has included working with Alibaba and extending its partnership with AmazonFresh, which includes the upcoming launch of Tyson Tastemakers meal kits this fall.
In addition to expanding its packaged brands portfolio, Tyson has also overhauled the chicken segment's business model to retain profitability when commodity markets become more volatile. The overhaul included an optimized cost structure that minimizes the volatility of grain input costs and the removal of more than $1 billion in inefficiencies since 2009, White said.