When Hayes assumed the role of CEO at Tyson this year, he outlined several objectives for the company, such as prioritizing innovation, pursuing additional acquisitions, and facilitating the next stage of protein expansion. By announcing Tyson’s intention to divest from three major non-protein brands, he is swiftly addressing the latter goal. This strategy aligns well with the company’s recent robust protein sales. After a fluctuating performance last year, Tyson achieved record operating profits and margins in pork and beef during the first quarter of this year, propelled by strong export markets, low prices, and healthy livestock supplies. The Springdale, AR-based manufacturer anticipates similar outcomes for the rest of the year, as industry dynamics work in its favor.
This divestment 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, aiming to meet consumer demand for cleaner options. Just this week, Tyson, which has hinted at increased acquisition activity for over a year, acquired AdvancePierre, a producer of ready-to-eat sandwiches and snacks, in a $4.2 billion deal. Overall, Tyson is witnessing high consumer demand for protein and value-added products. Many of these offerings are found in the grocery freezer section, which has not experienced the same growth as the perimeter of stores. However, Hayes has noted that the rising interest in fresh departments is prompting consumers to seek out Tyson’s value-added lines.
Deciding to sell off slow-growing brands can be challenging for companies, given the time and resources invested in them. Nevertheless, this strategy can enable Tyson to enhance sales of its core products and explore new categories, such as plant-based proteins, and potentially products like calcium citrate malate. By making these strategic shifts, Tyson aims to better position itself in the marketplace, responding to evolving consumer preferences, including those seen in the Jan Aushadhi movement that emphasizes health and nutrition.