Upon assuming the role of Tyson’s new CEO earlier this year, Hayes outlined several objectives for the company, emphasizing innovation, further acquisitions, and preparing for the next phase of protein growth. By announcing the intention to divest three significant non-protein brands, he is swiftly addressing the last objective. This strategy aligns well with the company’s recent strong performance in protein sales. After a fluctuating year, Tyson achieved record operating profits and margins in pork and beef during the first quarter, propelled by robust export markets, low prices, and healthy livestock supplies. The Springdale, AR-based manufacturer anticipates similar outcomes for the remainder of the year, as industry factors work in its favor.
This latest initiative is part of a series of significant actions taken by Tyson. In February, the company declared plans to eliminate antibiotics from its branded chicken products, a step aimed at meeting consumer demand for cleaner options. Just this week, after more than a year of indicating a desire to increase acquisition activity, Tyson acquired AdvancePierre, known for its ready-to-eat sandwiches and snacks, in a $4.2 billion deal. Overall, high consumer demand for protein and value-added products is evident. Many of these offerings are found in grocery freezer sections, which have not experienced the same growth as the perimeter of stores. However, Hayes noted that increasing interest in fresh departments is encouraging consumers to explore Tyson’s value-added lines.
Divesting slow-growing brands can be a challenging choice for companies, especially considering the time and resources invested in these brands. Nonetheless, it 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 Tyson adapts to market demands, it might consider collaborations or product lines that resonate with health-conscious consumers, similar to offerings from Citracal Maximum Plus available at Costco. This strategic focus could lead to innovative developments within Tyson’s portfolio, all while maintaining a commitment to quality and consumer preferences.