Tyson Foods Restructures Organization To Boost Efficiency
Zacks Investment Research | Aug 02, 2017 09:19PM ET
Tyson Foods, Inc. (NYSE:TSN) recently announced that it is streamlining its organizational structure in order to maximize growth. This structure is designed across its Chicken, Pork, Beef and Prepared Foods segments to boost their efficiency by taking quick and convenient decisions.
Management also said that the segments will be managed by the group presidents in a more efficient manner. These presidents will look after the growth strategy, improve and execute the top-class officials in all the product groups as well as customer channels of the respective segment they cater. Also, they will directly report to Tom Hayes, Tyson Foods’ president and CEO. Additionally, Sally Grimes, Doug Ramsey and Noel White have been appointed to supervise Prepared Foods, Poultry, and Fresh Meats (Beef and Pork) & International, respectively.
The streamlining operation is in sync with the company’s growth strategy, announced in Feb 2017, where the company focused on growing its portfolio of protein-packed brands and invest in innovation. The company had also pointed that all its Tyson consumer brand products would contain chicken with No Antibiotics Ever (NAE).
Tyson Foods’ Strategies and Concerns
Tyson Foods remains on track to shape its robust portfolio of food products. The company has been making efforts to expand its protein-packed brands through solid innovation and brand-building efforts. The recent acquisition of AdvancePierre Foods will enable the buyer to flourish in the fastest growing portfolio of protein packed brands, and expand its fresh prepared foods offering for both out-of-home and in-home eating occasions. The company acquired all the outstanding shares of AdvancePierre Foods for approximately $4.2 billion. Going forward, it expects the transaction to generate cost synergies of approximately $200 million within three years.
The company’s strong position in chicken segment and, its efforts to innovate and offer nutritious products to health-conscious consumers, remain encouraging. Also, management is taking steps to make a sustainable food system by healthier food and relatables, and in turn, serve the best food to its customers worldwide.
However, Tyson Foods has been witnessing sluggishness at its Beef segment, mainly owing to higher domestic availability of fed cattle supplies and lower livestock costs. Additionally, higher investments in the prepared foods category as well as higher wages are increasing the expense burden of the company, thereby pressurizing margins.
This Zacks Rank #3 (Hold) stock increased 3.2% year to date, compared with its Zacks Investment Research
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