Jennie-O Turkey Store will close one of its plants in Willmar, Minnesota, in an effort to make the business more efficient.
Hormel Foods, the parent company of Jennie-O Turkey Store announced the decision to close the plant on Benson Avenue in Willmar as it released its fourth quarter financial results on December 9. The quarter ended on October 31.
The Benson Avenue plant is one of two plants Jennie-O Turkey Store operates in Willmar. The other is a newer facility, located on Willmar Avenue. The company said workers at the Benson Avenue plant will be transferred to the Willmar Avenue plant, and the production done at the closing plant will be consolidated into multiple other facilities within the company.
The closure and transfer of work is expected to occur during the first half of fiscal year 2022.
“Over time, we expect these actions to result in a more demand-oriented and optimized turkey portfolio that is better aligned to the changing needs of our customers, consumers and operators that will result in long-term growth, improved profitability and lower earnings volatility,” Jim Snee, president, CEO and chairman of Hormel Foods, said during a quarterly earnings call.
Snee described the Benson Avenue plant as smaller, inefficient, and one that produces various commodity projects. The changes represent a shift from commodity products to branded value-added products for the company.
The changes will also help the company avoid “duplication of resources,” he added.
CEO: Jennie-O has underperformed
As Hormel reported its most recent quarter’s financial results, it revealed that Jennie-O Turkey Store’s volume was up 1%, net sales were up 23%, but the segment profit was down 7%.
Snee acknowledged the Jennie-O financial results have not been as strong as he would like.
“If we’re honest with ourselves, the business has underperformed in recent years, and that’s not through a lack of effort on our team’s part. That’s dealing with a significant oversupply situation that’s created a lot of volatility for us,” he said.
With the changes in plant operations, as well as a stronger focus on branded products, Snee said the company will be more of a consumer-driven company.
Turkey still important to Hormel Foods
Snee stressed that Hormel Foods remains committed to its turkey business, and that turkey products are of great value to the company.
“Turkey is not going away in our portfolio,” Snee said.
“Turkey is vital to our balanced business model, serves to diversify our portfolio, and is important to consumers who are looking for high-protein, lean and versatile offerings.”
He added that in the coming months, turkey operations will become even more integrated into Hormel Foods operations as a whole, and will continue to be produced and marketed, not only through the Jennie-O brand, but the Applegate, Columbus and Hormel Natural Choice brands, as well.
