US meat production company Smithfield Foods has been ranked second among food production companies on Fortune magazine’s annual list of the World’s Most Admired Companies.
The company has moved up eight positions from its 10th-place listing last year and said the move reflects its “continued progress as a sustainability leader in the global packaged meats space”.
President and chief executive officer of Smithfield Foods C Larry Pope said: “Our advancement on the Fortune list from tenth to second place is incredibly meaningful to us as a company and speaks to the hard work of our staff. Our employees go to work every day focused and dedicated to moving Smithfield Foods forward and their efforts have not gone unnoticed.”
Strong Third Quarter
This month Smithfield also posted strong third quarter fiscal results for the first three months of 2013.
According to the company, the positive performance was driven by the growth of its packaged meat division, as well as healthy contributions from its international operations. Smithfields has also continued to deliver on its plan to move into the value added sector, with its consumer packaged meats sector.
Packaged meat saw operating profits increase by US$8.5m (7%) to US$125.9m in the third quarter, with volumes increasing by 5%. Core brand value also grew by 6%.
Total sales for the third quarter of fiscal trading in 2013 were US$43.6bn up, which was a result of higher volumes movement in all segments. Net income was also up at US$81.5m compared to the company’s net income of US$79m last year.
Nine out of its twelve core brands in the third quarter saw volume growth and Pope said: “Our Smithfield bacon, Eckrich dinner sausage and Armour dry sausage all achieved double-digit growth. We gained market share in the bacon, dinner sausage, dry sausage and ham steak categories. We were also very successful in broadening distribution of our core brands in a number of key product categories including bacon, dinner sausage, deli meats, dry sausage and ham steaks.”
Looking ahead, Pope said Smithfield is anticipating steady growth from its packaged meat business, with an increased market share and “broader distribution of its core brands”, adding: “We expect margins at the high end of the normalized range with at least 2% to 3% volume growth in fiscal 2013 and for this trend to continue into fiscal 2014.”
Poor Consumer Economy
Despite consumers facing mountainous living costs, Pope claimed that pork prices at retail were competitive compared to other proteins, which he said should provide retailers with opportunities for promotions later in the spring and on into the summer.
He said: “Smithfield believes lower per capita protein supplies and higher prices for competing proteins should help push pork retail prices higher in calendar 2013. Taking all of this into account, we think that fresh pork margins will continue to be in the normalized range of $3 to $7 per head in the fourth quarter, as well as in fiscal 2014 on average.”
The company is also in the midst of developing a plan to boost earnings and to further grow opportunities over the forthcoming years. Of this Pope said: “We are excited about the growth prospects for this company as we continue to transform Smithfield into a more value-added consumer packaged meats company. We expect solid earnings in fiscal 2013 and look forward to even stronger results next year.”