Firm Ups Byproduct Yield

From hog jowls to lipstick, Tyson Foods means more than just meat. All sorts of offbeat byproducts are hiding under the Springdale company’s skins.

As the world’s largest meat producer, Tyson slaughters 9.5 million head of cattle a year, for example, and provides the cowhides for about 90 percent of the 97,000 baseballs used every year in Major League games.

“If you pick up any pair of shoes, any baseball glove, or slide across a leather seat, there is a one-in-three chance it came from our operations in the United States,” said Chris Daniel, senior vice president of hides and allied products at Tyson Foods Inc.

According to Tyson, there are more than 300 products derived from beef and pork alone that never reach a dinner fork.

“One cow could possibly end up being in 100 different items, anything in the sporting goods sector, the garment sector and the handbag/luggage sector,” Daniel said.

Byproducts from the 2.3 billion chickens that Tyson processes every year can also be used for things like animal arthritis supplements.

Cracking the Whip

Tyson’s allied beef products and hides segment accounted for about 10 percent, or $1.19 billion, of all of Tyson’s beef sales in fiscal 2003, said Tyson Fresh Meats spokesperson Gary Mickleson.

Tyson’s 2003 annual sales totaled $24.5 billion, up 5.1 percent from $23.3 billion in 2002. Chicken sales totaled $7.4 billion, beef $11.9 billion and pork $2.4 billion with other prepared foods taking up $2.6 billion and the “other” category totaling $55 million.

Since Tyson’s fiscal 2003 ended in September, sales for that year were unaffected by the discovery of bovine spongiform encephalopathy in Washington state on Dec. 24. The BSE news prompted import bans from several countries and forced sales of certain byproducts downward.

“A lot has changed in the last eight weeks, a lot of items we’ve saved for international trade — beef intestines, tongue, liver — because of the BSE discovery in Washington, those products significantly lost value,” Daniel said. “A whole host of other items in those markets have evaporated.”

Hides were one of the only products not banned because of the BSE discovery because they contain no specified risk material, Daniel said.

From the late ’80s to mid-1990s, IBP Inc., which is now Tyson Fresh Meats, built tanneries. As a result, Daniel said, the division has become a hide industry leader in the United States.

Tyson has four tanneries located in Josalyn, Ill.; Dakota City, Neb.; Amarillo, Texas; and Garden City, Kan. They employ about 400 people systemwide.

Tyson’s tanning operation processes about 4.4 million cattle hides per year, which is about 50 percent of its cattle slaughter. About half of those hides are exported.

The United States exports about 10 percent of its beef.

Tyson has a client in Taiwan that finishes the leather that eventually ends up being used for baseballs.

Innovation Sells Well

“In fiscal 2003, we embarked on an aggressive campaign to increase the percentage of sales from value-added products from 35 percent to 50 percent over the next three to five years,” company Chairman and CEO John Tyson said in the firm’s 2003 annual report.

That goal coincides with the mission of one Tyson research segment. Two years ago, Tyson formed a six-member science and technology team within the R&D segment of the company.

“Tyson is investing a lot of money in research to explore some of these markets we haven’t been in,” said Mike Blanchard, Tyson’s director of science and technology.

The team of food scientists, flavor scientists and biochemists was created to find new and innovative approaches and products to upgrade the non-prime pounds that Tyson produces. The group is targeting 900 million pounds of non-prime chicken, 10 million pounds of pork and 25 million pounds of dry non-prime beef with the projects they have in progress. The number is determined by what is available at that time in a specific category.

“We had to figure out how to add value to what has traditionally been treated as a commodity,” said Hal Carper, senior vice president of research and development. “We had to have a better understanding of the non-prime pound.”

OsteoCare

Since its inception, the group has developed several key products. In June, Tyson unrolled a product line called OsteoCare, an arthritis supplement for pets that can be added to their food.

The product is made from a blend of cartilage and connective tissue derived from beef, pork and chicken. The collagen proteins from the tissue and cartilage are divided into type I and type II collagen. Type I is made of amino acids, and type II is made from the six glycosaminoglycans: chondroitin sulfate, hyaluronic acid, keratin sulfate, heparin, dematin sulfate and heparan sulfate.

Tyson acquired the patent rights from Active Life LLC for the OsteoCare product. “The patented method extends the nutritional supplementation concept for addressing osteoarthritis,” the science and technology group said in a released statement.

It is sold in three different formats: as a liquid, powder or frozen product.

For every three pounds of tissue and cartilage, one pound of finished OsteoCare product is produced.

“We are selling in the neighborhood of 350,000-400,000 pounds a month right now,” Blanchard said. “We are just getting to the point where we can attack the market with it.”

Blanchard said that Tyson is probably about a year away from having a human version of OsteoCare on the market.

Items that typically go into rendering for pet food today, Blanchard said, might be perfectly good products that just haven’t found a match yet.

In addition to OsteoCare, Tyson is the only U.S. company that produces and sells hydrolyzed chicken keel cartilage.

The patented product is made from raw cartilage that Tyson then refines into a powder that is sold to companies that use it in various products such as beauty products, skin moisturizers and arthritis supplements.

Tyson has been selling the keel powder for two years now, and the product brought in more than $1 million in revenue last year.

“We’ve got the potential to be the leader in the supply of it since we are still fairly new in it,” Blanchard said. “We really have not played in these markets before as Tyson Foods.

“The one thing we do have is a large supply of raw material that, with the research we are putting toward that, we can put those towards value-added products.”

The group also continues to research diversifying the use of its chicken powder, a product that has been on the market for three years. Chicken powder is used in many of Tyson’s products as a low-sodium flavor option, and Tyson produces about 50,000 pounds of it per week.

The value-added segment, Blanchard said, won’t grow on its own.

“You are not going to get there by luck,” he said. “You are going to get there by research.”

U.S. Beef Byproduct Export Values
(in millions)

For Tallow (cattle fat), Lard (pig fat), Oils and Greases

1999: $860
2000: $650
2001: $545
2002: $741

Casings (cattle intestines)

1999: $66
2000: $67
2001: $62
2002: $61

Hides and Skins

1999 $1,139
2000: $1,561
2001: $1,962
2002: $1,745

Wool and Mohair

1999: $22
2000: $19
2001: $11
2002: $26

Source: USDA