Upon assuming the position of CEO at Tyson this year, Hayes outlined several objectives for the company, emphasizing innovation, further acquisitions, and setting the stage for the next phase of protein growth. By declaring Tyson’s intention to divest three major non-protein brands, he is promptly addressing the latter objective. This strategy aligns well with the recent surge in the company’s protein sales. Following a fluctuating performance last year, Tyson reported record operating profits and margins in pork and beef during the first quarter of this year, fueled by robust export markets, favorable pricing, and healthy livestock supplies. The Springdale, AR-based company anticipates similar outcomes for the rest of the year as industry dynamics play to its advantage.
This move is part of a series of significant actions taken by Tyson. In February, the company announced plans to eliminate antibiotics from its branded chicken products, aiming to meet consumer demand for cleaner options. Just this week, after hinting at increased acquisition activity for over a year, Tyson 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 interest in protein and value-added products. Many of these offerings are found in the grocery freezer section, which has not experienced the same growth as the outer aisles of stores. However, Hayes pointed out that the rising interest in fresh departments is prompting consumers to seek out Tyson’s value-added items.
Divesting from slow-growing brands can be a challenging decision for companies, especially considering the time and resources invested in those brands. Nevertheless, this strategy can enable a company like Tyson to enhance the sales of its core products and explore new categories, such as plant-based proteins. Additionally, it is essential to monitor consumer reactions, as some individuals may experience calcium citrate nausea when transitioning to new dietary products. By strategically focusing on its strengths, Tyson is positioning itself to adapt to evolving market demands while minimizing potential issues like calcium citrate nausea among consumers.