Hormel: Suppliers have supply chain issues, too

The chairman and CEO of Hormel Foods said the company he leads has been dealing with supply chain issues that sometimes can affect its bottom line and at times, even the amount that consumers pay for products.

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(Hormel Foods)
(Hormel Foods)

The chairman and CEO of Hormel Foods said the company he leads has been dealing with supply chain issues that sometimes can affect its bottom line, and at times, even the amount that consumers pay for products.

What people don’t always realize, though is that Hormel Foods’ suppliers are dealing with their own similar issues, which adds to Hormel’s challenges.

“We have our supply chain and our suppliers’ supply chain. We’re all facing the same headwinds, if you will,” Jim Snee, president, chairman and CEO of Hormel Foods, said on September 9 during the Barclays Global Consumer Staples Virtual Conference.

While Snee said Hormel Foods can often easily navigate its own supply chain challenges, that isn’t always the case when the people and companies Hormel relies on have similar challenges.

“We’ve got great visibility into our supply chain. What we don’t have is that same level of visibility into our suppliers’ supply chain. That’s packaging, that’s ingredients, that’s freight, that’s logistics. That’s a very complex supply chain and we’re having to pivot and adjust on the fly sometimes,” said Snee.

“(There are instances when) we’ve got a product scheduled, only to find out that our supplier doesn’t have what we need available, and we don’t find out until the last minute. We have to react. In many cases, we’re able to solve the issue, but when you solve it, it comes with even added costs.”

Snee said when extra costs arise, the company can take pricing action and pass some of that extra expense onto the customers or consumers, but that isn’t always easy.

“You can price, but you have to be cognizant of categories,” said Snee.

Hormel Foods operates in many food categories. Specific to the poultry industry, it is the parent company of Jennie-O Turkey Store and Applegate. However, it also is the parent company of Spam, Skippy, Black Label bacon, Columbus Craft Meats and Planters, among other brands.

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