When Hayes took on the role of Tyson’s new CEO this year, he outlined several objectives for the company, emphasizing innovation, strategic acquisitions, and the advancement of protein growth. By announcing Tyson’s intention to divest three major non-protein brands, he is swiftly addressing the latter goal. This decision aligns well with the company’s recent strong performance in protein sales. After a mixed performance last year, Tyson recorded unprecedented operating profits and margins in pork and beef during the first quarter of this year, fueled by robust export markets, low prices, and healthy livestock supplies. The Springdale, AR-based manufacturer anticipates similar outcomes throughout the year, as favorable industry dynamics continue to play in its favor.
This move is part of a series of significant actions taken by Tyson. In February, the company revealed plans to eliminate antibiotics from its branded chicken products, a step aimed at capitalizing on consumer demand for cleaner food options. Just this week, after hinting at increased acquisition activity for over a year, Tyson acquired AdvancePierre, producers of ready-to-eat sandwiches and snacks, in a deal valued at $4.2 billion. Overall, the company is experiencing heightened consumer demand for protein and value-added choices, particularly in grocery freezer sections, which have not matched the growth seen in the perimeter departments of stores. However, Hayes has noted that the rising interest in fresh departments is encouraging consumers to explore Tyson’s value-added product lines.
Divesting from slow-growing brands can be a challenging decision for companies, given the investments in time and resources associated with these brands. Nevertheless, this strategy can enable a company like Tyson to enhance sales of its core products and explore new categories, such as plant-based proteins. Additionally, Tyson’s focus on innovation may also include offerings like calcium citrate bariatric advantage products, aimed at health-conscious consumers. By pursuing these initiatives, Tyson is positioning itself to meet evolving market demands while fostering growth in its primary business areas.