The power of convenience
Prepared Foods operating income for the quarter shot up to $160 million compared with $21 million for the same period of the previous year and sales for the business were $1,871 million compared with $861 a year earlier.
Prepared Foods sales volume increased due to incremental volumes from the acquisition of Hillshire Brands, the company said. Average sales price increased primarily due to price increases associated with better product mix, which was positively impacted by the acquisition of Hillshire Brands.
Operating income improved due to an increase in sales volume and average sales price mainly attributed to Hillshire Brands, as well as lower raw material costs of approximately $40 million for the second quarter. Additionally, the company said profit improvement initiatives and Hillshire Brands synergies positively impacted Prepared Foods operating income by $70 million for the second quarter.
“Although value consciousness appears to be here to stay, the consumer’s ability and willingness to pay for value-added benefits is moving in a direction to afford and support protein innovation in the marketplace,” Mr. Smith said. “We’ll leverage this direction as we continue to deliver relevant innovation, with new varieties for Park’s Finest hot dogs by Ball Park, and Hillshire Farm Natural lunch meat.
“We’ll also be introducing three disruptive innovation platforms in Q4, capitalizing on the snacking and freshness consumer trends, with the launches of Hillshire Snacking, Ball Park Jerky, and Jimmy Dean Simple Scrambles. We’ll break into two sections of the store with these launches, and while still continuing to expand our convenient meal and snacking offerings in frozen chicken.”
