Tyson Foods is looking to expand internationally to help stabilize its business and reduce exposure to U.S. agricultural-marketing swings, Noel White, Tyson Foods CEO, told The Wall Street Journal in an interview this week.
Tyson Foods is considering acquisitions in new markets and revamping its strategy in China, where earlier investments in company-run poultry farming complexes have struggled, CEO White said. Tyson’s efforts to rebuild its overseas presence is a way for Tyson Foods to harness growing protein demand in developing countries as well as in established markets for meat, White said in his first interview since taking over as Tyson CEO in September.
A broader international presence would make Tyson Foods less reliant on the ups and downs of the U.S. meat sector, where processors like Tyson Foods, Pilgrim’s Pride, and Hormel Foods Corporation are grappling with low prices and growing meat supplies. “It is in fact spreading the risk if you do have operations in countries outside the United States,” White said.
The U.S. meat industry faces challenges as chicken and pork production rise to record levels this year, according to USDA projections. Abundant meat has sharpened the competition and has cut into chicken demand for suppliers like Tyson. Tariffs on some U.S. meat products from top meat-importing countries like Mexico and China have also pressured prices.
Noel White, who previously oversaw Tyson’s international business, said Tyson is exploring potential acquisitions of meat-processing or food companies outside of the United States, although he declined to discuss specific companies.
Tyson Foods in August struck a $2.16 billion deal to acquire Keystone Foods, a major meat supplier to McDonald’s and other restaurant chains. The Keystone deal, which Tyson Foods expects to close by mid-2019, will add new U.S. plants along with facilities in China, Malaysia, and Thailand.
Tyson is refocusing on its international business after prioritizing investments in U.S. packaged foods over the past four years. In 2014, Tyson spend $7.7 billion to buy Hillshire Brands, parent of Jimmy Dean sausage and Ball Park hot gods. Later that year, Tyson agreed to sell its Brazilian and Mexican poultry operations, saying it had not been able to build enough scale to effectively compete.
Those sales left Tyson with a handful of processing plants, rendering facilities and hatcheries in India and China, where Tyson had invested heavily to develop integrated complexes to hatch, raise, slaughter and process chicken. Subsequent avian influenza outbreaks and slow economic growth eroded poultry demand in China.
CEO White said Tyson has reset its approach to China and is focusing on selling its name-brand products like chicken nuggets in Chinese grocery stores. He said Tyson may develop new plants in China that could do additional processing of chicken products, like battering, frying and cooking.
Noel White, who has worked across Tyson’s beef, pork, and poultry businesses for 35 years, said he plans to stick with the strategy laid out by his predecessor Tom Hayes. Under Hayes tenure as CEO, Tyson expanded its environmental commitments and invested in alternatives to traditional meat production, like plant-based burgers and technology to grow meat from animal cells. “The marketplace is changing, and we have to change with it.” White said.
