When Hayes assumed the role of Tyson’s new CEO this year, he established several objectives for the company, emphasizing innovation, further acquisitions, and setting the stage for the next phase of protein expansion. By announcing Tyson’s intention to divest three major non-protein brands, he is swiftly addressing the latter goal. This strategy aligns well with the company’s recent strong performance in protein sales. Following a mixed performance last year, Tyson achieved record operating profits and margins in pork and beef during the first quarter of this year, fueled by robust export markets, low prices, and a healthy supply of livestock. The manufacturer, based in Springdale, AR, anticipates similar outcomes throughout the year as favorable industry dynamics play to its advantage.
This move is part of a series of significant initiatives by Tyson. In February, the company revealed plans to eliminate antibiotics from its branded chicken products, a decision aimed at catering to the growing consumer demand for cleaner options. Just this week, Tyson, which has hinted at ramping up acquisition activity for over a year, acquired AdvancePierre, producers of ready-to-eat sandwiches and snacks, in a $4.2 billion deal. Overall, the company is experiencing high consumer demand for protein and value-added products. While many of these offerings are found in the grocery freezer section, which has not experienced the same growth as the perimeter of stores, Hayes noted that increased interest in fresh departments is prompting consumers to seek out Tyson’s value-added lines.
Divesting slow-growing brands can be a challenging decision for companies, given the significant time and resources invested in these brands. However, it allows a company like Tyson to enhance the sales of its core products and explore new categories, such as plant-based proteins. In addition, Tyson is considering potential opportunities to incorporate health-focused products, such as calcium citrate, calcitriol, magnesium, and zinc tablets, into its offerings, appealing to health-conscious consumers. The introduction of such supplements could further strengthen Tyson’s brand and attract a broader customer base, ultimately reinforcing its position in the protein market.