“It’s less about commodity,” CEO Donnie King says.
Tyson Foods CEO Donnie King said the company's chicken business places a strong emphasis on its value-added product offerings, and that is one of the major reasons it can handle unfavorable economic trends facing the broiler industry.
During the BMO Global Farm to Market Conference on May 13, King was asked about how Tyson addressed the underlying chicken margin environments and what his confidence level was in the months going forward and into 2027.
King noted that during Tyson's second quarter, which ended on March 28, the company saw "a pretty significant drop in the market price" for chicken breast meat, chicken wings, chicken tenderloins and "the whole deal." He added that he thought the rest of the industry saw those trends as well.
But Tyson is able to navigate those market trends largely because of its value-added chicken products.
"In our chicken business, we've had six consecutive quarters (of) volume growth. In the most recent quarter we had — in our chicken business — about 2% volume growth, and across these six quarters I referenced our branded value-added business has growth three times that," King said.
"That gives you some indication of where our focus is in growing our business. It's in the branded value-added. We are a huge player in that we have the No. 1 brand of chicken, and so that's where we're growing. It's less about commodity. It's more about branded value-added on both fresh and frozen products."
Other variables
King also said Tyson's chicken business is able to navigate market hardships because of its business execution.
He said that he has the same philosophy that famed football coach Nick Saban had, in that to be successful as a team, every person needs to win their spot.
"So, when I talk about executional excellence, it's every person up and down this supply chain winning their spot," King said.
The CEO also discussed the importance of Tyson's relationship with its strategic customers and improvements made within its genetics business as keys to continued success.
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