Dive Brief:
- Tyson Foods is preparing for its next transformational acquisition, CEO Donnie Smith said at a presentation during Barclays Global Consumer Staples Conference last week, as reported by Food Business News.
- Bolt-on acquisitions with certain conditions applied are also a possibility, he said. Those include fitting existing capabilities, serving an incremental capacity need, providing a 20% or higher return on invested capital, and having the right personnel and cultural fit.
- It's been two years since Tyson acquired Hillshire Brands for $8.55 billion, which included Jimmy Dean, Ball Park, Hillshire Farm and State Fair. The deal was an expansion of the company's presence beyond raw meats to branded, protein-based packaged foods. It also provided opportunities for profitable synergies.
Dive Insight:
The company will focus on "protein-centric, branded, value-added" products and categories when deciding between pursuing a smaller bolt-on, a major merger or even an international opportunity.
But key to Tyson's approach is a balance between exploring merger and acquisition opportunities and growth of its existing core brands. Innovation might look very different from an acquisition versus internal R&D, so it opens more doors to Tyson in terms of products and categories.
These growth strategies also enable Tyson to further explore use of ingredients such as whole grains and ancient grains that otherwise might not have been as accessible from Tyson's previous meat-based portfolio. Tyson can build a stronger presence in fast-growing categories like protein and meat snacks and adjacent segments for brands like Jimmy Dean.