Rochelle Foods, LLC

The maker of such thrifty pantry staples as Spam lunch meat and Dinty Moore stew has turned sophisticated. Besides canned meats, Hormel Foods produces a slew of refrigerated processed meats and deli items, ethnic entrees, and frozen foods, sold under the Hormel brand, as well as Don Miguel and MegaMex Mexican, Country Crock (side dishes), and Lloyd's barbeque. Food service offerings include Hormel Natural Choice meats, Café H ethnic, Austin Blues barbeque, and Bread Ready pre-sliced meats. Hormel is also a major US turkey and pork processor, churning out Jennie-O turkey, Cure 81 hams, and Always Tender pork. More than 30 Hormel brands are ranked #1 or #2 in their respective markets.

Geographic Reach

While nearly 95% of the company's sales come from the US, Hormel boasts operations and/or joint ventures across the globe, including in Australia, Canada, China (the world's biggest market for pork), Japan, and the Philippines.

Operations

Hormel Foods operates five business segments. The largest, Refrigerated Foods, including pork and beef products and the company's 50%-owned Precept Foods joint venture, accounts for 51% of total sales, followed by Jennie-O Turkey (19%), and shelf-stable grocery products, such as the MegaMex Foods line, with 14%.

Not so familiar with consumers, the company's specialty foods segment (11% of sales) packages and sells a variety of sugar and sugar-substitute products, salt and pepper, liquid-portion products, dessert mixes, ready-to-drink products, gelatin products, and private-label canned meats. Its primary customers are retail and foodservice firms. The segment also makes nutritional food products and supplements for hospitals, nursing homes, and other marketers of nutritional products.

The firm's international arm, Hormel Foods International, brings in the rest.

Sales and Marketing

Wal-Mart is Hormel's largest customer, accounting for about 13% of the company's fiscal 2012 (ends October) sales. The world's largest retailer purchases products from each of Hormel's five business segments.

Financial Performance

Hormel is successful not only in driving a large products portfolio with strong brand recognition but one that meets a range of consumer and food service operator preferences. Sales increased 4% in fiscal 2012 (ends October) vs. the prior year, while net income grew by 5% over the same period. Specialty foods and grocery products were top performing categories with each segment's sales up 10%. (The acquisition of Don Miguel Foods (2010) helped propel grocery products sales.) The company's Jennie-O Turkey segment posted a 6% uptick in sales, while sales of refrigerated foods -- Hormel's largest product category -- was essentially flat. Growth overseas (up 6%) outpaced US sales growth (up 4%).

Strategy

While Spam may be its best known brand, Hormel Foods has a diverse and growing portfolio of consumer products, with Skippy peanut butter as the newest addition. The company is focusing on developing and acquiring new products to drive sales. In 2012 Hormel achieved its "Go for $2B by 2012" goal of realizing $2 billion in total sales from new products introduced since 2000. Hormel is also looking to grow its ethic business at home as well as its international sales.

The company's Precept Foods joint venture with Cargill markets case-ready fresh beef and pork under the Always Tender brand. Hormel operates another joint venture with Herdez Del Fuerte to market Mexican foods in the US. Called MegaMex Foods, it is integral to Hormel's plan to further diversify its portfolio. In mid-2011 MegaMex Foods purchased guacamole manufacturer Fresherized Foods, whose brands include Wholly Guacamole, Wholly Salsa, and Wholly Queso. MegaMex was bolstered in 2010 by the purchase of Don Miguel Mexican Foods, which specializes in hand-held snacks and appetizers. Hormel also branched out by scooping up the Shedd's Country Crock chilled side-dish business in the US from Unilever. The move allows Hormel to expand its offerings in both the convenient-meals and side-dish value-added marketplace.

Mergers and Acquisitions

Looking to beef up its menu of non-meat protein products, Hormel has been particularly acquisitive in recent years. In 2014 the company agreed to acquire Muscle Milk maker CytoSport in a $450 million deal. Having earned a top spot in the $1 billion protein drink category, CytoSport will help Hormel attract younger customers. Previously, Hormel acquired Skippy peanut butter in 2013 from Unilever for $700 million. (Hardly peanuts, the deal represented Hormel's largest purchase ever.) With about $370 million in annual sales, Skippy is the #2 brand of peanut butter in the US (behind Smucker's Jif) and the leader in China. The company believes Skippy should be a useful complement to its sales strategy in China for the SPAM family of products.

Ownership

The Hormel Foundation owns approximately 48% of the company's stock. It is a charitable trust formed during World War II.

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Rochelle Foods, LLC


1001 S Main St
Rochelle, IL 61068-2190
Phone: 1 (815) 562-4141
www.hormel.com

STATS


  • Employer Type: Unknown
  • Safety Manager: Paul Hardcastel
  • Manager: Calvin Jacobs
  • Manufacturing Prod Distrib Ex: Lou Tartington

Major Office Locations

  • Rochelle, IL

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