A new business model was needed to achieve satisfactory returns for Tyson Foods, even in times of commodity market volatility, Tyson poultry division president Noel White said.
White spoke at the Jefferies 2016 Global Consumer Conference, held on June 21.
“We’ve fundamentally changed how we operate our chicken business,” White said. “First, we optimized our cost structure. We’ve taken more than $1 billion in inefficiencies out of the business since 2009.”
White went on to explain the company utilizes a broad range of customer pricing agreements that serve to minimize the volatility of grain input costs. In addition, Tyson has upgraded its product mix into more branded, value-added items and created the “Buy vs. Grow” strategy of production, significantly de-commoditizing the business. Delivering high quality products and customer service are also key, he said.
“We strive to continually earn the trust of our customers that we will deliver for them, that we will innovate for them and that we will help them grow their businesses,” White said.
White was joined at the Jefferies 2016 Global Consumer Conference by Tom Hayes, who was recently named president of Tyson Foods. Hayes discussed h ow the company is executing well and selling more branded, protein-centric foods, that include the popular Tyson brands Jimmy Dean, Hillshire Farm and Ball Park.