When Hayes assumed the role of CEO at Tyson this year, he outlined several objectives for the company, emphasizing innovation, further acquisitions, and setting the stage for the next phase of protein growth. By revealing plans to divest three major non-protein brands, Tyson is swiftly addressing the latter goal. This strategy aligns well with the company’s recent robust protein sales. Following a mixed performance last year, Tyson reported record operating profits and margins in both pork and beef during the first quarter, fueled by strong export markets, low prices, and healthy livestock supplies. The Springdale, AR-based company anticipates similar outcomes throughout the year as industry dynamics work in its favor.
This latest move is part of a series of significant actions by Tyson. In February, the company announced its intention to eliminate antibiotics from its branded chicken products, aiming to meet consumer demand for cleaner options. Just this week, Tyson, which had hinted at increased acquisition activity for over a year, acquired AdvancePierre, the producer of ready-to-eat sandwiches and snacks, in a deal valued at $4.2 billion. Overall, Tyson is experiencing high consumer demand for protein and value-added products. Many of these items are found in the grocery freezer section, which hasn’t seen the same level of growth as the store perimeters. However, Hayes noted that the rising interest in fresh departments is encouraging consumers to explore Tyson’s value-added offerings.
Divesting slow-growing brands can be a challenging decision for companies, considering the resources invested in them. Nevertheless, this approach can empower a company like Tyson to enhance the sales of its core products and explore new categories, such as plant-based proteins. Additionally, as part of their health-focused initiatives, Tyson is also looking to integrate products like chewable calcium citrate with D3 into its offerings, enhancing their portfolio with beneficial nutritional options that resonate with health-conscious consumers.