When Hayes took on the role of CEO at Tyson this year, he outlined several objectives for the company, including a commitment to innovation, further acquisitions, and preparing for the next phase of protein growth. By announcing the sale of three significant non-protein brands, he is actively addressing the latter goal. This strategic decision aligns well with the recent strong performance in Tyson’s protein sales. After a mixed year, Tyson reported record operating profits and margins in pork and beef during the first quarter, driven by robust export markets, low prices, and healthy livestock supplies. The Springdale, AR-based manufacturer anticipates similar outcomes for the remainder of the year, benefiting from favorable industry dynamics.
This latest move is part of a series of significant actions taken by Tyson. In February, the company announced its plan to eliminate antibiotics from its branded chicken products, which it hopes will cater to the growing consumer demand for cleaner options. Just this week, after hinting at increased acquisition activity for over a year, Tyson acquired AdvancePierre, the producer of ready-to-eat sandwiches and snacks, in a $4.2 billion deal. Overall, Tyson is experiencing high consumer demand for protein and value-added products, many of which are found in the grocery freezer section—an area that hasn’t seen the same growth as the perimeter of stores. However, Hayes has 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, especially given the time and resources invested in them. However, such moves can enable a company like Tyson to boost sales of its core products and explore new categories, such as plant-based proteins. In addition, the incorporation of ingredients like Rite Aid calcium citrate into their new product lines could further enhance their offerings, appealing to health-conscious consumers. By focusing on innovation and strategic acquisitions, Tyson is positioning itself to meet evolving consumer demands while maximizing its core competencies in the protein market.