When Jennie-O Turkey Store is integrated into the rest of parent company Hormel Foods’ operations, both the company and the consumer will see benefits, said Hormel CEO Jim Snee.
Snee, speaking during the Barclays Global Consumer Staples Conference on September 7, discussed how the integration plans are progressing, and how it will make a difference once it comes into fruition at the beginning of fiscal year 2023, which will start around the beginning of November 2022.
The transformation plan
Presently, Hormel Foods operates four separate business segments: Grocery Products, Refrigerated Foods, Jennie-O Turkey Store, and International & Other.
But once the new fiscal year begins, there will be three, somewhat different segments: Retail, Foodservice and International. Jennie-O will be blended into both the Retail and Foodservice segments, while the International segment will remain mostly unchanged.
Snee said there have been skeptics that thought that the Jennie-O brand and operations were going away, but he added “nothing could be further from the truth.”
Instead, Jennie-O, which saw a profit increase of 537% during the most recent quarter, will be better able to build on that momentum.
Financial benefits to company
Snee said integrating the Jennie-O business functions – including the supply chain, selling organization and marketing team, and research and development teams – will lead to a significant savings for the company. Snee estimates that the savings will amount to between $20 million and $30 million annually.
“We have a best-in-class sales organization across our enterprise, and being able to strengthen that organization while also simplifying our approach to customers and operators is going to have a very positive effect on our business,” Snee said. “In today’s environment, never has it been more important to be able to make better, faster and more agile decisions, and this updated operating model will enable us to do just that.”
A difference for customers
When asked how the customers have reacted when learning of the transformational plans, a common reaction is asking what took Hormel so long to reach this decision.
Snee said this change will make things more convenient for customers of Hormel and Jennie-O.
“We have had instances where we could have a Hormel salesperson, a Jennie-O salesperson and maybe an Applegate salesperson in a customer’s office at the same time,” Snee explained. “We’re saying we’re going to make it easy for you.”
Now, when the sales staff visits customers, they will walk through the door, talk about Hormel’s overall product offerings and which ones will work best for that particular customer.
“We’re not relying on chance or potential collaboration within our own organization. We’re making it happen and creating that alignment for the customer. All of the feedback so far has been incredibly positive. And a level of excitement (is there) because they now have to only have one meeting as well, and they know that they’re going to cover the entire organization.”
