Tyson Value Added Wins Big In Market

Tyson Foods Inc. plans to target growth in sales of value-added products increasing the sales from that segment from 35 to 50 percent over the next three to five years, president and Chief Operating Officer Dick Bond told shareholders at Tyson’s annual shareholders meeting on Feb. 6.

Greg Lee, chief administrative officer and president of the international division, paralleled Bond’s valued-added growth sentiments with his outline of Tyson’s five-year strategic plan for “achieving the company’s vision of being the the world’s first choice for protein solutions while maximizing shareholder value.”

Innovation, Lee said, is the first element of the new strategic plan.

Tyson introduced more than 100 new retail and 300 new food-service products in 2003, including canned chicken and beef broth, self-serve deli meats, boxed and resealable-bag lunch meats, fully cooked refrigerated dinner meats, individually quick-frozen beef steaks and pork chops, fully cooked bacon and premium hams.

“The new products have added even more presence to an already unbeatable and expansive product portfolio,” Bond said.

As part of that value-added growth target, Tyson is expanding its research and development capabilities to include the construction of a new 184,000-SF Tyson Discovery Center.

“It will give us the capability to develop chicken, beef, pork and other prepared food products in process,” Lee said.

The center will focus on product research and development.

Nicholson defined value-added products as products that are produced beyond a commodity state. Value added makes a product available for convenience.

“We will work with the customers,” Nicholson said. “We will work with our own ideas and develop food-service products for them.”

Tyson has more than 100 R&D employees on staff right now.

Tyson will begin construction on the new facility within the next two to three months with completion slated for Fall 2005. It will be located north of the two existing towers at Tyson’s world headquarters in Springdale.

Research and development department and corporate marketing are currently housed on the Tyson campus, but management development is split between the corporate headquarters and the Tyson Leadership College in Russelville. All those departments will be housed in the Discovery Center.

“All of our products, whether they are retail or food service, entail a great deal of research and development,” Nicholson said. “As we move into more value-added products, it is going to be more critical to do that.”

The center will more than quadruple Tyson’s test kitchen capabilities. It will have 18 test kitchens compared to the four test kitchens in current facilities. The center will also have two demonstration kitchens that can be used for clients who want to sample potential products. For the first time, thanks to the Discovery Center, a USDA-inspected pilot plant will be located on the main Tyson campus. Tyson’s pilot processing plant is now on Ford Avenue in Springdale.

“It allows us to take test products and put them in a simulated manufacturing environment,”Nicholson said. “It’s one thing to develop those products and another to see how we can run them in our plants.”

Nicholson said value-added production will continue to be a increasing part of Tyson’s business.

“That is the way we are going to grow our business beyond per-capita consumption,” Nicholson said, “by making products more convenient for the consumers that are continually pressed for time and for the food service customers that have needs with regards to labor.”