Seaboard Corporation, which has a 52.5% ownership of Butterball, disclosed that the turkey producer was profitable during the 2023 fiscal year, but not as profitable as it was during the previous year.
On a Form 10-K that can be accessed through the Seaboard Corporation Investor Relations webpage, the company stated that Seaboard’s income from Butterball affiliates amounted to $87 million for the most recent fiscal year, down from the $103 million of fiscal year 2022. However, it was still a stark improvement from fiscal year 2021, when the company saw a loss of $20 million.
Butterball’s sales declined 7% in 2023 when compared to the previous year, which did play a factor in the reduced income. However, Seaboard stated that a particularly strong financial performance for 2022 also must be taken into account.
“The decrease in net income was primarily the result of income recorded in the prior year related to a $21 million gain on the sale of businesses, and $11 million of mark-to-market gains on interest-rate swap agreements that were terminated in 2022. The decrease was partially offset by higher margins with a stronger mix of value-added products sold and production efficiencies,” Seaboard stated.
New product development
The Form 10-K also indicated that new products from Butterball could be on the way. The company acknowledged that the Butterball name alone does add value to its products, but at the same time, it cannot rely solely on that.
“In order to maintain this advantage, Butterball must continue to support the brand with successful marketing efforts and develop new products. Consumer product preferences continue to evolve as a result of, among other things, shifting consumer demographics; inflationary and recessionary risks; changes in consumer lifestyles; digital shopping patterns; and competitive product and pricing pressures. If Butterball’s products fail to meet consumer preferences, or Butterball fails to introduce new products or product extensions on a timely basis, the brand value could diminish significantly,” the Form 10-K read.
One example of a new product unleashed in 2023 is the Butterball Hearty Turkey Sausage, which the company touted as a butcher-style sausage link that it bun length while offering the same taste and texture of its pork counterparts, but with 70% less fat.
Seaboard Corporation, through its Seaboard Foods subsidiary, is also a major producer of pork products.
