About Cobb-Vantress, Inc.
Tyson Foods spreads its wings beyond the chicken coop. While it is second of the largest US chicken producers (with processing capacity of some 45 million a week), 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, Ball Park, Wright, ibp, Aidells, and State Fair. Its customers include retail, wholesale, and food service companies worldwide, although the US accounts for most sales.
The company operates in four reportable segments: beef, chicken, prepared foods and pork. The company makes more than 35% of its revenue from its beef segment and about 30% from its poultry operations. Prepared foods and pork products contribute about 20% and more than 10%, respectively.
Beef segment includes operation related to processing live fed cattle and fabricating dressed beef carcasses. The chicken segment includes operation related to raising and processing live chickens into, and purchasing raw materials for fresh, frozen and value-added chicken products, as well as sales from allied products. Prepared foods includes operation related to manufacturing and marketing frozen and refrigerated food products and logistics operations to move products through the supply chain. Pork segment includes operation related to processing live market hogs and fabricating pork carcasses.
In terms of volume Tyson Foods is, indeed, a chicken company, with processing capacity of more than 45 million chickens a week compared to about 461,000 pigs and 155,000 head of cattle at its 123 food production plants worldwide.
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 feeder pigs to independent producers on a contract basis.
Among Tyson's facilities are processing plants, rendering plants, blending mills, feed mills, broiler hatcheries, breeder houses, and distribution centers.
Headquartered in Springdale, Arkansas, Tyson Foods serves retail and foodservice customers across the US and in about 145 other countries worldwide. Tyson's major export markets include Australia, Canada, Central America, Chile, China, the European Union, the United Kingdom, Japan, Mexico, the Middle East, South Korea, Thailand and Taiwan. The company generates limited revenue from exports however; they account for about $6 billion annually.
Sales and Marketing
Tyson's products are marketed and sold primarily by its sales staff to grocery retailers and wholesalers, meat distributors, warehouse club stores, military commissaries, industrial food processing companies, and chain restaurants or their distributors, among other customers. Additionally, sales to the military and a portion of sales to international markets are made through independent brokers and trading companies. Walmart alone accounts for about 20% of its sales.
Tyson promotes its products with marketing, advertising, trade promotions, and consumer incentives such as coupons, discounts, rebates, and volume-based incentives.
The company advertising expense totaled $283 million, $276 million and $243 million in 2020, 2019 and 2018, respectively.
Since falling from $41.4 billion in 2016, Tyson Foods' revenue has steadily increased. Net income has had a stronger journey over the past five years, more than tripling since 2014.
In fiscal 2020 (ended October), the company reported revenue of $43.2 billion, up by 2% from the prior year. Primarily due to the impact of the additional week and increased average sales prices in the Beef, Pork and Prepared Foods segments. Fiscal 2020 operating income increased compared to fiscal 2019, as strong Beef and Pork segment results were partially offset by a decline in operating income in the Chicken and Prepared Foods segments.
Net income that year was increased by 6% to $2.1 billion because of the $116 million pretax gain from pension plan terminations, $75 million pretax restructuring and related charges and $65 million pretax income related to accounting cycle resulting in a 53-week year in fiscal 2020.
Cash at the end of fiscal 2020 was $1.5 billion, an increase of about $936 million from the prior year. Cash from operations contributed $3.9 billion to the coffers, while investing activities used $1.4 billion, mainly for capital expenditures. Financing activities used another $1.5 billion, primarily for repayments of commercial paper.
Tyson's strategy is to sustainably feed the world with the fastest growing protein brands. The company intends to achieve its strategy to grow business through differentiated capabilities; deliver ongoing financial fitness through continuous improvement; and sustain the company and future generations.
In early 2020, the company approved a restructuring program (the "2020 Program"), which is expected to contribute to the company's overall strategy of financial fitness through the elimination of overhead and consolidation of certain enterprise functions. In late 2020, the company extended the 2020 Program as it identified additional opportunities to eliminate overhead by optimizing organizational structures and other activities. As a result of this restructuring program, it expects to realize savings of approximately $140 million and $160 million in fiscal 2021 and fiscal 2022, respectively. The company has recognized $60 million of cumulative pretax charges in fiscal 2020 associated with the 2020 Program consisting of severance and employee related costs. As part of the 2020 Program, the company is eliminating positions across several areas and job levels, with eliminated positions originating from the corporate offices in Springdale, Arkansas and Chicago, Illinois, as well as a certain production facility and supply chain administrative positions. The majority of the positions have already been or are expected to be eliminated by the end of fiscal 2021.
In fiscal 2019, the company acquired two businesses for a total of approximately $2.5 billion, net of cash acquired. These businesses included the Thai and European operations, which consist of vertically integrated chicken and further-processing operations, and Keystone Foods, a major supplier to the growing global foodservice industry. They were acquired in furtherance of the company's growth strategy and expansion of their value-added protein capabilities in domestic and global markets.
Tyson Foods was founded in 1935 by John W. Tyson. In 1963 the family took the company public. Throughout the 1990s Tyson Foods entered new markets worldwide including countries in the Americas and the Asia-Pacific region. It became the world's largest processor and marketer of chicken, beef, and pork through the 2001 purchase of IBP.
4703 Highway 412 E
Siloam Springs, AR 72761-8906
Phone: 1 (479) 524-3166
Employer Type: Privately Owned
CIO, IT Directors: Chris Cry
Vice President Sales and Marketing: Stan Reid
Vice President, Production Operations: Randy Vardeman
Employees (This Location): 2,000
Employees (All Locations): 2,150
Siloam Springs, AR
Siloam Springs, AR