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Tyson CEO Donnie Smith: Hillshire Opens Door to More Growth

2 min read

Donnie Smith, CEO and president of Tyson Foods Inc. of Springdale, said Wednesday that it’s an exciting time to be in the food business, especially as the company moves forward after its $8.55 billion acquisition of Hillshire Brands Inc. of Chicago.

Smith and CFO Dennis Leatherby spoke at the Morgan Stanley Global Consumer & Retail Conference, sharing highlights from the company’s quarterly and annual earnings report released Monday. As the company moves forward, Smith sees growth opportunities because of its Hillshire products.

Tyson is now the No. 2 company in frozen food worldwide behind Nestlé, but Smith said Tyson has market dominance in key areas. For example, Smith showed a graphic Tyson, either through its own or Hillshire products, with the No. 1 product in robustly growing categories.

In fresh chicken, Tyson has a 12 percent share of a market that is growing at a 6.5 percent clip, and Jimmy Dean is at 19 percent in frozen protein breakfast, an area that is growing at 7.1 percent.

“We are a large player in large growing categories,” Smith said. “There’s a lot of potential in the frozen breakfast category. That speaks very well to our portfolio.”

Smith also said he expects demand for chicken to continue to rise about 3 percent the next three years. Smith said high beef prices and the preference of chicken by millennials — people born after 1980 — because they grew up eating chicken nuggets instead of beef like older generations.

Smith said 2014 saw a clear shift to chicken from beef, and chicken will remain a better protein value while high beef demand collides with tight supply. Smith predicted beef demand would drop 4 percent next year followed by a smaller decrease in 2016 before it flattens in 2017. 

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