Tyson is more than simply chicken. One of the largest US chicken producers, Tyson's Fresh Meats division makes it a giant in the beef and pork sectors, as well. The company also offers value-added processed and pre-cooked meats and refrigerated and frozen prepared foods. Its chicken operations are vertically integrated -- the company hatches the eggs, supplies contract growers with the chicks and feed, and brings them back for processing when ready. Tyson's brands include Tyson, Jimmy Dean, Hillshire Farm, Sara Lee, Ball Park, Wright, Aidells, and State Fair. Its customers include retail, wholesale, and food service customers worldwide.
Tyson processes 41 million chickens, 383,000 pigs, and 133,000 head of cattle every week at its 45 chicken, 12 beef, 9 pork, and 38 prepared food production plants worldwide.
Tyson's wholly-owned subsidiary Cobb-Vantress Inc. is a top poultry breeding stock supplier globally that leverages research and development to breed desirable characteristics into its flocks. Tyson is known for its chicken, but it also produces beef and pork products. The company's fresh meat operations process beef and pork, offering processed pork products such as sausage, ham, and bacon. Aside from a significant foodservice operation, Tyson's prepared foods unit produces pizza toppings and frozen entrées. Other Tyson activities include rendering meat by-products and tortilla and pizza-crust manufacturing.
While its chicken operations reach from egg to drumstick, Tyson raises no cattle of its own. It buys live cattle on the open market and they're raised under contract at third-party feed lots. The majority of Tyson's swine are bought from producers; however, it does raise some swine and supplies the resultant feeder pigs to independent producers on a contract basis.
As part of its operations, the company boasts four business segments: beef, chicken, prepared foods, and pork. Beef is actually its largest segment, accounting for about 40% of revenue, with chicken bringing in about a quarter of sales. The fast-growing prepared foods segment contributed nearly 20% of sales, with pork at more than 10%.
The company serves customers in the US and in more than 130 countries worldwide. Tyson's major export markets include Brazil, Canada, Central America, China, the European Union, India, Japan, Mexico, the Middle East, Russia, South Korea, Taiwan, Ukraine, and Vietnam. Export sales are about $4 billion, or about 10% of total revenue.
Sales and Marketing
Tyson's products are marketed to grocery stores, meat distributors, club stores, military commissaries, chain restaurants, and foodservice operators, among other customers. Wal-Mart accounted for 17% of Tyson's sales for fiscal 2015.
Advertising and promotion expenses for fiscal 2015, 2014, and 2013 were $996 million, $641 million, and $555 million, respectively.
Tyson has reported steady revenue growth since fiscal 2009. Revenues increased by 10% in fiscal 2015 (ended October) thanks primarily to nearly 100% growth in its prepared foods segment as a result of the acquisition of Hillshire Brands in 2014. The beef segment also showed strong growth, while the pork segment fell more than 15% after the divestiture of the Heinold Hog Markets business, which the company sold as part of the Hillshire purchase.
Net income jumped about 40% on the strong revenue growth, hitting $1.2 billion, which in turn boosted cash from operations.
Tyson has been getting into new markets in recent years to add breadth to its products portfolio. Taking advantage of this affinity for animals, the company introduced True Chews, a line of beef, chicken, and ham-flavored dog treats. Banking on a billion-dollar pet treat market, Tyson rolled out the products, sourcing ingredients used in True Chews from the company's meat and poultry operations.
Tyson has devoted more dollars to research and development efforts in recent years. Research and development costs totaled $75 million, $52 million, and $50 million in fiscal 2015, 2014 and 2013, respectively.
For another venture outside its usual food chain, the company had moved (in 2007) into biofuels. It began supplying the animal fats and greases from its meat production operations to Dynamic Fuels, its Louisiana-based 50:50 joint venture with Syntroleum that produces renewable fuels from the by-products. However, in 2014, Tyson changed course, selling its 50% stake in Dynamic Fuels to Renewable Energy Group for $30 million.
In a further streamlining, in 2015 the company sold its Brazil and Mexico poultry operations to JBS SA for $575 million. It planned to use the proceeds to pay down debt.
Mergers and Acquisitions
In 2014 Tyson acquired Hillshire Brands alongside fellow poultry producer Pilgrim's Pride in a $7.75 billion deal. Hillshire, at the time, was attempting to acquire Pinnacle Foods, but scrapped those plans.
Growing its US prepared foods business, that year Tyson acquired Warren, Michigan-based Bosco's Pizza Co., which produces a variety of stuffed bread sticks and frozen pizzas for food service and retail customers across the Midwest.
In 2013 Tyson focused on boosting its value-added foods business. Midyear, the company's Tyson Mexican Original subsidiary acquired the assets of Don Julio Foods of Clearfield, Utah. Don Julio Foods specializes in making flour and corn tortillas and salty snacks such as tortilla chips, pretzels, and potato chips. The company also purchased the assets of California's Circle Foods, maker of frozen and refrigerated handheld Mexican foods, uncooked tortillas, and increasingly popular Indian flatbreads.