Tom Hayes, president of Tyson Foods and the incoming chief executive officer, dropped hints about acquisitions and investments at the Bernstein Consumer Summit in New York on Wednesday.
"Don't be surprised if we pull in an acquisition or two," he said. "You'll see us focus a lot on innovation."
Tyson has already started to look for investments in the food industry, more than three weeks before Hayes officially takes control of the company. Earlier this week, Tyson announced a $150 million venture capital fund so the company could invest in food-focused startups.
The venture fund team, led by Mary-Kay James, a Chicago-based former DuPont Ventures executive, will look at new technologies to reduce food waste and at alternatives to animal protein.
"We're looking at new technologies that are going to play well with our strategies," Hayes said at the New York conference.
Beyond Meat, a startup that makes plant-based burgers, was the first recipient of the Tyson venture fund. Tyson bought a 5 percent stake in the California-based company.
Tyson's strategy aims to capture a growing market of consumers concerned with sustainability and healthful, less processed foods. It's part of a broader shift in the company away from commodities and toward prepared foods and development of its most well-known brands, including Tyson, Hillshire Farms and Jimmy Dean.
Hayes, a former Hillshire Foods executive, landed at Tyson in 2014 with Tyson's $7.7 billion purchase of Hillshire. The Bernstein conference is the first time Hayes has spoken on behalf of the company as its incoming CEO since the November announcement that he will take the helm from current chief executive Donnie Smith. Smith remains CEO until Dec. 31.
Hayes said the company will focus on growth in China and India, densely populated places where there's a growing middle class and increasing demand for protein.
"The growth, as you'll see, is predominately in developing countries," he said. "The consumer is changing quite a bit in China, almost the same as they changed 50 years ago in the U.S."
Dennis Leatherby, Tyson's chief financial officer, said at the conference that Tyson's weaker-than-expected chicken performance in the past quarter has rebounded in the first weeks of the company's fiscal 2017.
The chicken sector is traditionally Tyson's most profitable business segment. In a quarterly earnings report released in late November, the chicken sector saw a 3.2 percent decline in quarterly revenue. At the time, executives attributed this to a planned production slowdown and increase in the cost of soybean meal used in chicken feed.
"We're already back into the normalized range," Leatherby said.
In the lead-up to Hayes' tenure as CEO, Tyson and other poultry companies are facing a series of lawsuits, including an antitrust suit and allegations of price fixing in the poultry industry.
"In no way are we going to back off," Hayes said. "The claims made in these stories and the lawsuit are simply not true, and we will continue to operate our business with integrity and drive value to our customers and consumers."
Business on 12/08/2016