This year, Tyson Foods faced hesitant shoppers and expensive livestock feed, yet Donnie Smith led the company to record sales in 2011.
“In fiscal 2011, we produced record sales and our second best EPS [earnings per share] in company history despite record input costs, which included $675 million in additional feed and ingredient costs in our chicken segment,” said Smith, president and chief executive officer, in a company statement.
Over the past year, Tyson has worked to improve performance where possible, focusing on “operational efficiencies and production flow of plants,” Smith told SN. “In the current environment, you simply cannot pass along your inefficiencies to your customers.”
He noted that Tyson has focused on business fundamentals — yield, labor and workplace safety.
The company also reduced its debt and received returns on capital investments, Smith pointed out.
In addition to high production costs, another challenge for the meat industry has been the social-media-fueled controversy over lean finely texture beef, a filler used in ground beef, dubbed “pink slime” by its critics.
In a company conference call, Chief Operating Officer James Lochner noted this controversy “temporarily destroyed demand for ground beef and beef in general virtually overnight.”
Despite these obstacles, two quarters into fiscal 2012, Smith remains positive about this year’s performance.
“We’re experiencing what will likely be our third consecutive year of solid earnings, which is significant given economic conditions, including increased input costs,” he said.
Smith sees Tyson’s diversity of products and customers as key advantages for the company.
“We’re a leader in chicken, beef, pork and prepared foods and can supply retail and foodservice customers, both domestically and internationally,” Smith said.
The company continues to rework current products while developing new ones.
Whole grain breaded chicken chunks and lightly breaded chicken strips are examples of products revamped for health conscious consumers. New products include convenience-focused products such as Tyson’s stuffed mini bread bowls and chicken mini sandwiches.
This focus on finding the right products for changing consumer preferences plays a role in Tyson’s strategic plan the company calls “Accelerate, Innovate, Cultivate.”
“We’re accelerating growth by producing more value-added chicken and prepared foods domestically, and by expanding our international presence,” he said.
Tyson will soon expand in-country poultry operations in China and Brazil, Smith said. The supplier will also continue to work with its customers on new products, services and packing solutions.
“This includes the development of proprietary ingredients and packaging formats that help meet consumer demand,” Smith said.