Tyson on the prowl for prepared foods opportunities
March 2, 2012
MIAMI – Tyson Foods, Inc. is looking to take advantage of acquisition opportunities or capacity utilization in the prepared foods category. Speaking at the Bank of America Merrill Lynch Global Agriculture Conference this week in Miami, Jim Lochner, chief operating officer for the company, said the company is not focused on growing its core commodity production, but looking at prepared foods opportunities.
“We have the raw materials,” Mr. Lochner said. “We have a tremendous amount of R.&D. resources, innovations resources, and we have very strong relationships.
“So the push will be into prepared foods across a number of segments. I’m not going to talk about specific targets within category. We're having very good success promoting Wright Brand bacon. We're having very good success promoting other traditional food products because we do have a very competitive structure and good brand recognition with Tyson.”
From an international perspective, Mr. Lochner said Tyson Foods has a lot of people inquiring about what kinds of opportunities interest the company.
“Our core expertise is in chicken production, live and further processing,” he said. “That we believe we do better than anybody else. And there's a need worldwide for that expertise, so we'll either grow it organically or through acquisition as the timing and the return on invested capital warrant.”
Mr. Lochner also said the amount of meat protein available to consumers has declined in recent years and is expected to continue to decline for the foreseeable future.
“We are operating in a different world than we were a few years ago,” he said. “After decades of steady growth, U.S. per capita consumption of (meat) protein declined 11% from the peak in 2006, a trend that is likely to continue.”
American consumers are eating less protein because there is less available to eat, Mr. Lochner said. Strong export demand is sending more meat and poultry overseas. In addition, Mr. Lochner said less protein is being produced, because of the pressure on the profitability of livestock and poultry farming. As input costs have gone up, food inflation has accelerated, creating margin shifts and causing disruptions to the meat protein supply chain.