Value-added direction for Tyson Foods

By Aidan Fortune contact

- Last updated on GMT

Value-added direction for Tyson Foods

Related tags: Poultry, Beef

US processor Tyson Foods has earmarked the value-added sector and prepared foods as areas of future growth for the business.

At the Tyson Foods’ Investor Day at the New York Stock Exchange, chairman John Tyson, president and CEO Noel White and members of the company’s senior management team outlined its growth plans.

It reported how its Prepared Foods business has become a “large, profitable growth engine”.​ The division represented 3% of company profits five years ago and now equates to 30% of the business.

It said that it is continuing to grow its mix of value-added products through acquisition and innovation in the retail and foodservice channels. Examples in retail are the recent acquisition of the Smart Chicken brand that offers premium, organic, air-chilled chicken and the company plans to launch new Tyson Air Fried chicken later this year.

On the beef side, the business has enjoyed demand growth resulting in higher beef margins. It said this trend is expected to continue due to factors such as increasing global middle-class income, increases in live cattle supplies and the continued growth of the company’s case-ready, value-added business.

“We’re poised for long-term growth because we understand consumers and can meet their needs through a broad portfolio of diverse products,”​ said White. “As we look ahead, prepared foods and value-added chicken are expected to be the most profitable segments and international is where we see the most opportunity for significant growth.”

International demand

The business said its international acquisitions, will enable it to take advantage of rising global protein demand. Over the next five years, it is estimated that nearly 98% of protein consumption growth will happen outside the U.S. and approximately 70% of that growth will be in Asia.

It said that a worldwide decrease in pork supply due to the impact of African Swine Fever on the Chinese pig herd could offer significant upside to Tyson Foods’ poultry, pork and beef businesses, but could also increase raw material costs for its prepared foods business.

Alternative proteins

Tyson added that demand growth for alternative proteins is being driven by people who love eating meat but also are open to a diet that includes plant-based proteins. They believe this growth is “incremental and meaningful in potential size”, ​leading to the recent introduction of the company’s first plant-based and blended products.

“We’re excited about the direction of our company and the diversity of our products, businesses, people and locations,”​ added John Tyson. “We strive to provide quality, safe, sustainable and affordable food, while supporting our communities, customers, people and our shareholders.”

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