Hillshire Farm products, Tyson
Tyson is on the lookout for another acquisition like Hillshire Brands.

BOSTON — Two years after acquiring Hillshire Brands, Tyson Foods, Inc. is ready for another transformational acquisition, said Donnie Smith, chief executive officer.

The addition of Hillshire, which Tyson bought for $8.55 billion in 2014, not only has proven to be highly synergistic, but also has accelerated the poultry processor’s portfolio evolution toward branded, protein-centric packaged food, having added such brands as Jimmy Dean, Ball Park, Hillshire Farm and State Fair.

Whether Tyson’s next deal is a small bolt-on or a major merger, Mr. Smith said the Springdale, Ark.-based company uses several filters to determine whether a business may be a strategic fit.

Donnie Smith, Tyson
Donnie Smith, c.e.o. of Tyson Foods

“First, protein-centric, branded, value-added, of course,” Mr. Smith said during a Sept. 8 presentation at the Barclays Global Consumer Staples Conference in Boston. “If it fits within our existing capabilities or if it fills an incremental additional capacity need, certainly it would be on the radar screen. We are open to international opportunities. And it has to be at the right value.”

Another priority for Tyson in pursuing an acquisition is whether the transaction would create a path toward a return on invested capital of at least 20%, Mr. Smith said.

“And then, the third one is, is kind of this execution piece around cultural fit; think maybe if it’s an international acquisition, do we have the right personnel, etc., that kind of thing,” Mr. Smith said. “So, those are the really three filters that we look at about what we bolt-on. In terms of the balance sheet, the balance sheet’s ready for a transformational acquisition.”

Tyson Naturals
The recently launched Tyson Naturals range features fully cooked chicken with no antibiotics ever and no added hormones or steroids.

Beyond mergers and acquisitions, Tyson Foods is investing in growing its core nine brands through innovation based on consumer insights. The recently launched Tyson Naturals range features fully cooked chicken with no antibiotics ever and no added hormones or steroids.

“We have a grilled, cooked product as well as a lightly-battered product that has whole grains,” said Tom Hayes, president of Tyson Foods. “There’s a variety that is whole grains as well as ancient grains. And these are receiving some tremendous, tremendous feedback from the trade.”

To capitalize on consumer demand for protein snacking, the company is expanding its successful Hillshire Snacking platform with new varieties, Mr. Hayes said.

Hillshire Snacking products, Tyson
Tyson is expanding its successful Hillshire Snacking platform with new varieties.

“Hillshire Snacking has been a huge hit,” he said. “We actually had to increase our capacity here because the base entries that we came into the market with were doing so well. And we are introducing three new varieties to the marketplace as we speak. And these are things that are taking advantage of this trend, but actually upscaling it a bit, adding nuts and adding more cheeses and some more protein overall, but in our different varieties.”

Another innovation strategy for Tyson is moving its iconic brands into adjacent categories. Recent launches under the Jimmy Dean banner include Stuffed Hash Browns and Jimmy Dean Delights Frittatas.

“The Jimmy Dean brand has been just a phenomenal success story, I think, as everybody knows,” Mr. Hayes said. “We reframed that from just a roll sausage into frozen protein breakfasts and other adjacent categories. Frozen protein breakfast at retail is growing 4% year over year in the last 52 weeks. When you look at the Jimmy Dean franchise, it’s growing 7% in volume year over year. We are driving category growth through Jimmy Dean.”

Jimmy Dean new products, Tyson
Recent launches under the Jimmy Dean banner include Stuffed Hash Browns and Jimmy Dean Delights Frittatas.

Tyson Taste Makers, the company’s answer to the meal kit phenomenon, has been introduced as a direct-to-consumer offering and will launch in retail, too, Mr. Hayes said.

“When you think about the category of value-added meats, so beef and pork and chicken that’s fresh, it’s a $4 billion space for us to play in,” he said. “And we need to get our fair share of that business. And Tyson Taste Makers is an entre in to that.”