Global meat consumption to rise by 43 million tons in 10 years
Tyson Foods' executives are expecting an increase of more than 43 million tons of meat in consumption over the next 10 years. Their conclusions were presented last week, during Tyson Foods’ virtual Investor Day. Chairman John H. Tyson, President and CEO Donnie King and members of the company’s senior leadership team spoke at the event.
They showcased Tyson Foods’ role as a leading protein company in a growing, global market; the company’s efforts to increase value-added and overall production capacity as part of a plan to drive accelerated volume and earnings growth; and a new productivity program that is expected to deliver more than $1 billion in recurring savings by fiscal 2024.
“We have three overarching priorities that direct our actions – winning with team members, winning with our customers and consumers, and winning with excellence in execution,” said King. “We are working to enhance our portfolio and capacity to better serve demand – this includes increasing the relative contribution of branded and value-added sales to our overall mix. By focusing on our product portfolio and by adding capacity to meet demand, we expect to outpace the market.
Tyson Foods is targeting volume growth ahead of the market in every segment. The company expects to open 12 new plants over the next two years, increasing capacity by about 1.3 billion pounds (580,000 tons). It is also targeting having 50% of its volume as value-added by the end of fiscal 2024.
The company expects a recovery of its chicken business to a 5 to 7% operating margin by mid-fiscal 2022 and expects to deliver stronger margins through fiscal 2024.
As part of the new productivity initiative, Tyson Foods plans to invest over $1.3 billion in capital in new automation capabilities over the next three years to increase yields, reduce labor costs and associated risks, and ultimately deliver cumulative savings. This initiative is designed to help the company’s facilities improve production capacity and efficiency and continue to unlock value.
Volume growth is expected to outpace the market at 2% per year, which will help support adjusted earnings per share growth.
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