Whether you like Nathan's Famous hot dogs, Farmland ham steaks, or Armour pepperoni, it's all on the Smithfield Foods menu. The world's largest hog producer and pork processor, Smithfield includes more than a dozen major brands of fresh pork and value-added pork products including deli meats and prepared foods. Other brands include Eckrich, Cook's, John Morrell, Gwaltney, and Healthy Ones. The company operates primarily in the US, with limited business in Europe. It processes about 30 million hogs annually. Smithfield was acquired in 2013 by China's largest meat producer, WH Group, which also owns a majority stake in China's largest pork company Shuanghui Development.
The company has four reportable segments: Packaged Meats, Fresh Pork, Hog Production, and International.
The largest segment, Packaged Meat, includes the US packaged meat operations and accounts for more than 40% of sales. The US Fresh Pork and Hog Production operations contribute about 30% and nearly 20%, respectively.
The International segment is comprised primarily of meat processing and distribution operations in Poland, Romania and the UK; hog production operations in Poland and Romania; and its interests in hog production plants in Mexico. That segment generates about 10% of total revenue.
Virginia-based Smithfield rings up 90% of its sales in the US. It has plants and hog production facilities across the US (primarily in Midwest and upper Southeast), as well as in Poland, Romania, and the UK.
Sales and Marketing
The company uses a private fleet of leased tractor trailers and independent common carriers and owner operators to distribute live hogs and meat products to its customers, and to move raw materials between plants for further processing.
Smithfield sells its products to about 3,800 customers, including grocery stores, hotel chains, restaurants, hospitals, and other companies that further process the meat into other products.
Parent WH Group reported 2015 revenue of $21 billion, with Smithfield contributing about two-thirds of that (roughly $14.5 billion). Smithfield's sales were down 4% that year as low hog prices resulted in a drop in fresh pork revenue.
The company's key strategy is based around its "One Smithfield" initiative, which in 2015 unified all of Smithfield's operating companies, brands, and marketing activities to maximize efficiencies, enable transparent and sustainable practices, and drive market share. It claims early success in sales and brand management from the initiative and expects to see improvements in transportation, logistics, and manufacturing through 2017.
Mergers and Acquisitions
In 2016 Smithfield acquired the largest pork processor in California, Clougherty, for $145 million. The deal strengthens Smithfield's presence in the Western US, adding regional brands such as Farmer John and Saag's Specialty Meats to its portfolio.