CEO Profile: Donnie Smith of Tyson Foods Inc.

by Jan Cottingham  on Monday, Mar. 26, 2012 12:00 am  

Four days after Donnie Smith became president and CEO of Tyson Foods Inc. on Nov. 19, 2009, the Springdale-based company reported a net loss of $455 million for the fourth fiscal quarter that had ended Oct. 3, compared with net income of $48 million for the same quarter a year earlier.

Richard Bond had resigned as CEO in January 2009, and Leland Tollett, a former Tyson CEO, had been working as interim chief while the meat-processing giant looked for a permanent replacement.

The terrible fourth-quarter result left the company with a $547 million loss for fiscal 2009. But Tyson bounced back in a big way during Smith's first two years as CEO: net income of $780 million in fiscal 2010 and $750 million in fiscal 2011. Sales in the year that ended last Oct. 1 topped $32 billion.

Tyson, the world's largest processor of chicken, beef and pork, is the second-largest food company in the Fortune 500 and employs about 115,000 workers at more than 300 locations around the world.

Smith, now 52, came to the top post as senior group vice president of poultry and prepared foods. On graduating from the University of Tennessee with a degree in animal science, Smith joined Tyson in 1980. With seven years of experience in live poultry production in Tennessee, he moved to corporate headquarters to work in Tyson's commodities purchasing group. He has held several leadership posts at the company.

Smith responded to a number of questions from Arkansas Business in an email interview. Among them:

How is demand for Tyson's products holding up?

"We're operating in a different world than we were a few years ago. After decades of steady growth, U.S. per capita consumption of protein declined 11 percent from the peak in 2006, and it's a trend that will likely continue.

"Americans are eating less protein because there's less available to eat, not because of a reduced intent to purchase - as evidenced by the inflation rate of meat products outpacing the inflation rate of other food items. Strong export demand is sending more meat and poultry overseas. In addition, less protein is being produced because of the pressure on the profitability of livestock and poultry farming. As input costs for such things as corn have gone up, food inflation has accelerated, creating more margin shifts and disrupting the supply chain.

"Despite reduced protein supplies, our company is committed to helping our customers grow their businesses. We have a diversified portfolio of chicken, beef, pork and prepared foods available. In addition, we don't just sell meat in a box. We provide innovation to our customers and consumers, and we believe that differentiates us from our competitors."

Asked about demand for poultry products - the company was founded in 1935 as a poultry producer - Smith said:

"First of all, let's take a look at economic indicators. Consumer confidence and spending improved in the last part of calendar 2011 as expected. According to the Conference Board Consumer Research Center, consumers are more optimistic that business conditions, employment prospects, and their financial situations will continue to get better. But it's still too soon to tell if this is a rebound from earlier declines, or a sustainable shift in attitudes.



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