When Hayes took on the role of CEO at Tyson this year, he outlined several objectives for the company, emphasizing innovation, further acquisitions, and paving the way for the next phase of protein growth. By announcing the sale of three major non-protein brands, he is swiftly acting on that last objective. This strategy aligns well with the company’s recent robust protein sales. After a fluctuating performance last year, Tyson reported record operating profits and margins in the pork and beef sectors during the first quarter, fueled by strong export markets, low prices, and a healthy supply of livestock. The Springdale, AR-based manufacturer anticipates similar outcomes throughout the year, as industry dynamics continue to favor its position.
This decision is part of a series of significant moves by Tyson. In February, the company declared its intention to eliminate antibiotics from its branded chicken products, aiming to cater to consumer demand for cleaner options. Just this week, after hinting at increased acquisition activity for over a year, Tyson acquired AdvancePierre, the producers 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 offerings can be found in the grocery freezer section, which has not seen the same level of growth as other areas of stores. However, Hayes noted that the rising interest in fresh departments is encouraging consumers to explore Tyson’s value-added lines.
While divesting from slow-growing brands can be a challenging decision for companies, given the time and resources invested in these brands, it can also liberate a company like Tyson to enhance the sales of its core products and explore new categories, including bariatric calcium supplements and plant-based proteins. This strategic shift not only positions Tyson for future growth but also allows the company to innovate within emerging market segments.