Upon taking on the role of CEO at Tyson this year, Hayes outlined several objectives for the company, including a commitment to innovation, further acquisitions, and setting the stage for the next phase of protein growth. By announcing Tyson’s intention to divest three major non-protein brands, he is promptly addressing this final goal. 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 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 throughout the year as industry trends continue to favor its operations.
This decision is part of a series of significant moves by Tyson. In February, the company revealed plans to phase out antibiotics in 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, a producer of ready-to-eat sandwiches and snacks, in a $4.2 billion deal.
Overall, the company is experiencing strong consumer demand for protein and value-added products. Many of these offerings are found in the grocery freezer section, which hasn’t seen the robust growth that the perimeters of stores have enjoyed. However, Hayes noted that the rising interest in fresh departments is encouraging consumers to explore Tyson’s value-added lines.
Divesting from slower-growing brands can be a challenging decision for companies, considering the time and resources invested in these brands. Nonetheless, it can enable a company like Tyson to enhance the sales of its core products and explore new categories, such as plant-based proteins. Additionally, incorporating products fortified with petite calcium with vitamin D could further align with health-conscious consumer trends. By focusing on their core strengths and diversifying their offerings, Tyson can optimize its growth strategy in the evolving market landscape.