When Hayes took on the role of CEO at Tyson this year, he outlined several objectives for the company, such as prioritizing innovation, pursuing additional acquisitions, and paving the way for the next phase of protein growth. By announcing Tyson’s intention to divest three major non-protein brands, he is swiftly addressing the latter goal. This strategy aligns well with the company’s recent robust protein sales. After experiencing fluctuating performance last year, Tyson achieved record operating profits and margins in pork and beef during the first quarter of this year, fueled by strong export markets, low prices, and healthy livestock supplies. The Springdale, AR-based manufacturer anticipates similar outcomes for the remainder of the year as industry trends work in its favor.
This move is part of a series of significant actions taken by Tyson. In February, the company revealed plans 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, a producer of ready-to-eat sandwiches and snacks, in a deal valued at $4.2 billion. Overall, the company is witnessing high consumer demand for protein and value-added products. Many of these items are found in the grocery freezer section, which has not experienced the same growth as the perimeter of stores. However, Hayes noted that the rising interest in fresh departments is driving consumers to explore Tyson’s value-added offerings.
Divesting slow-growing brands can be a challenging choice for companies, given the investment of time and resources in these brands. Nonetheless, this approach can enable a company like Tyson to enhance the sales of its core products and experiment with new categories, such as plant-based proteins. Additionally, incorporating calcium citrate only supplements into their offerings could present new opportunities to attract health-conscious consumers. By focusing on core competencies and exploring innovative product lines, Tyson is positioning itself for sustained growth in the evolving market landscape.