Tyson's Poultry Goes Back to Basics

US - The senior vice president of Tyson's poultry business explains how the company is tackling today's challenges. Taking a 'Back to Basics' approach, the company is focussing on consumer demands in a tough economic climate and is determined to regain market share.
calendar icon 18 February 2009
clock icon 3 minute read

"There is no doubt that 2008 was a very tough year for Tyson's chicken business," said Donnie Smith, senior group vice president - Poultry & Prepared Foods, during a recent press briefing to Meat&Poultry in Springdale, Arkansas. But signs of improvement are breaking through.

"Industry indicators are turning in our favour a bit now if you look at the egg sets in hatcheries, chicks placed on farms and the pounds produced," Mr Smith said. "Across our industry, we're down about six per cent versus where we were a year ago. We're seeing an impact from that on market prices ...the industry fundamentals are improving."

Tyson, however, is not relying on industry fundamentals to fix its poultry business. "We are laser-focused on getting our fundamentals back to where they need to be," Mr Smith said. "It's very much a 'back-to-basics' approach in our poultry business and we feel good about the progress we've made. We have a lot more progress to make. We like the team we've got assembled against that and we're making good progress."

In addressing the tough economy and its impact on Tyson's poultry business, Mr Smith said, "We are seeing consumers turn a little more often to retail for their food choices. If you look in the food service industry, full-service dining has struggled a bit. The limited-service dining area, however, has weathered the storm fairly well driven primarily by new products and also by value-type products, which in many cases we helped them develop."

The retail market gives Tyson an opportunity to capitalize on consumer behaviour, Mr Smith said. "We offer various different alternatives using our prepared-foods products and our value-added products to help consumers as they move that trend back toward retail," he added.

In addressing Tyson's fresh chicken business, Mr Smith said, "We're doing very well. Our branded share of growth has grown both in dollar sales and in volume sales. The value-added segment has struggled a bit as consumers are looking for less-expensive alternatives to stretch their food dollars. Fortunately last fall, we lowered our bag weights in our retail value-added line, which helps keep our price points down and keeps our products well within reach of shoppers looking for a value solution."

Expect Tyson's poultry business to become a tougher competitor, predicts MeatPoultry. "Over the course of the last few years, we have given up market share across the poultry industry and we simply can't do that any more," Mr Smith stated. "We'll be aggressively trying to grow our business. I think we'll be gaining share as we do so."

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