When Hayes took on the role of Tyson’s new CEO this year, he outlined several objectives for the company, emphasizing innovation, further acquisitions, and setting the stage for the next phase of protein growth. By announcing the intention to divest three significant non-protein brands, he is swiftly addressing the latter goal. This strategy aligns well with Tyson’s recent robust protein sales. After experiencing a fluctuating performance last year, Tyson achieved record operating profits and margins in pork and beef during the first quarter of this year, fueled by strong export markets, low prices, and ample livestock supplies. The manufacturer, based in Springdale, AR, anticipates similar outcomes throughout the year as favorable industry trends continue.
This latest move is part of a series of bold actions taken by Tyson. In February, the company revealed plans to eliminate antibiotics from its branded chicken products, aiming to meet the rising consumer demand for cleaner options. Just this week, Tyson, which has hinted at increased acquisition efforts for over a year, acquired AdvancePierre, a producer of ready-to-eat sandwiches and snacks, in a deal valued at $4.2 billion. Overall, the company is experiencing high consumer demand for protein and value-added products, many of which are found in the grocery freezer section—a segment that hasn’t performed as strongly as the perimeter of stores. However, Hayes has noted that the increasing interest in fresh departments is prompting consumers to seek out Tyson’s value-added offerings.
Divesting from slow-growing brands can be a challenging decision for companies, given the time and resources invested in these products. Nevertheless, this can enable a company like Tyson to enhance the sales of its core offerings and explore new categories, such as plant-based proteins. To further support its innovative endeavors, Tyson might consider integrating health-focused products like calcium citrate tablets into their portfolio, appealing to health-conscious consumers. By strategically selling off underperforming brands, Tyson can focus on its primary product lines and potentially introduce complementary items like calcium citrate tablets, which are gaining popularity for their health benefits.