Key development: Weathered poor beef market conditions.
What's next: Increasing sales of high-margin, value-added meats, and production of case-ready meats.
When he's asked about the effect mad cows have on business, John Tyson doesn't get mad. He's just matter-of-fact.
"Whether it's an animal or a food safety issue, it's part of what you get paid to manage," the affable Tyson said. "It goes with the territory. You don't have to like it, but you accept it."
The past year has been a toughie for meat companies. Like other processors, Tyson Foods was hit hard by the ban on Canadian beef. At various times, Tyson and other processors had to shut down plants temporarily and idle workers due to lack of work. At the same time, several major foreign markets for U.S. beef remain closed, a consequence of the mad cow scare. John Tyson noted the market problems had a negative impact on the first two quarters of fiscal year 2005 at his company's annual meeting earlier this year in Fayetteville, Ark.
However, there's a lot more on John Tyson's plate than beef. The $27 billion company founded by his grandfather is the world's largest processor and marketer of chicken, beef and pork. Increasingly, the company is emphasizing pre-seasoned meats as a vehicle for boosting profits. By 2009, Tyson's goal is to have value-added items represent 50% of product sales, and the chairman and CEO noted the company is moving toward the 40% mark for this year.
In January, the company announced plans to open a case-ready meat plant in Sherman, Texas, which will employ up to 1,600 people over two to three years. The plant will produce prepackaged beef and pork cuts for supermarket retailers. At full capacity, the plant will be able to make more than 6 million pounds of beef and pork each week. It's the latest sign of the company's evolution from poultry company to top beef processor.
Tyson Foods is doing a remarkable job rolling out branded and case-ready lines, said one analyst who covers the company.
"They continue to expand their production of higher-value-added products, and use the Tyson brand even more productively over a greater number of products," said Timothy Ramey, an analyst with D. A. Davidson & Co., Lake Oswego, Ore.
"It's not an easy thing to introduce new products into the grocery store or pioneer new categories like case-ready beef," Ramey said. "I give them high marks for that."
John Tyson credits the company's 114,000-member workforce for making the processor a success. The company launched a number of initiatives aimed at improving worker conditions and enhancing its own image as an employer. For instance, in January, the company unveiled the new Tyson Foods "Team Member Bill of Rights," which guarantees employees certain conditions, including a safe workplace, free from discrimination and retaliation, earnings that are commensurate with work performed, the option to seek out collective bargaining and right to continuous training.
Tyson Foods also was recognized by the Hispanic Association on Corporate Responsibility for including Hispanics throughout the business. About one-third of the company's employees are Hispanic.
"I don't have a job without our 114,000 team members," Tyson said. "They're the ones who make a difference."