Meat&Poultry -- August 2014 - 17

1935

John Tyson founds Tyson
Foods. First name is Tyson
Feed and Hatchery

1947

1963

1969

Tyson is incorporated

Tyson goes public, changes
name to Tyson's Foods, acquires
Garrett Poultry Company

Acquires Prospect Farms

Tyson turns its appetite for
acquisition to Hillshire Brands
T

he bigger you get, the more you

value-added products, to being a gen-

larger number in fi scal 2014, obvi-

can digest. Tyson Foods for years

uine food company, not unlike Hor-

ously appealed a lot to Tyson.

was content to grow internally and by

mel Foods.

Initial acquisitions

gobbling up smaller poultry proces-

Three words sum up why Tyson

sors, allied companies and the occa-

was prepared to bet the farm on Hill-

Tyson's early acquisitions reflected

sional foodservice business. It even

shire: brands, breakfast and margins.

its roots as a feed supplier and hatch-

dipped its feet, rather disastrously, into

Hillshire will bring to Tyson some of

ery, then a chicken raiser. But it didn't

the seafood business. Tyson's big bite

the most powerful packaged-meats

make its fi rst acquisition until 1962

toward diversifying its business came

brands in the world. These include

when it bought an Oklahoma City

in 2001 when it acquired IBP inc.,

six core brands, Jimmy Dean, Ball

poultry and egg distributor. It bought

the world's largest red-meat company.

Park, Hillshire Farm, Aidells, State

its fi rst poultry processor a year lat-

IBP, though, was largely a com-

Fair and Gallo. Other brands include

er. Numerous acquisitions followed

modity red-meat business and Tyson

Sara Lee, Kahn's and Bryan. The deal

but most were confi ned to the poul-

was determined to move more into the

will vastly accelerate Tyson's growth

try industry.

prepared-foods sector. So, it made

in the $1 billion breakfast-food cate-

An early sign that Tyson wanted to

two small acquisitions last year and

gory, the fastest-growing segment of

broaden its reach into the food busi-

another in January this year. None of

the prepared-foods market, which it

ness was in 1983 when it acquired

these, however, prepared the US meat

only entered this January.

Mexican Original Inc., a corn and

industry or the food industry for the

Third, Tyson is buying a company

flour tortilla processing plant in Fay-

boldest and biggest play in industry

with some of the best operating mar-

etteville, Ark. Its biggest acquisition

history. This play was Tyson's $8.55

gins in the meat industry and with far

came in 1989 when it bought Holly

billion offer on June 9 for Hillshire

larger margins than Tyson's. In fis-

Farms for $1.29 billion. Three years

Brands to best an offer by global ri-

cal 2013, Hillshire had a net margin

later, it diversified into seafood when

val JBS SA.

of 4.7 percent vs. 2.3 percent for Ty-

it bought Arctic Alaska Fisheries Cor-

Tyson's acquisition of Hillshire,

son. On an operating basis, Hillshire's

poration and Louis Kemp Seafood

expected to be completed at the end

retail business had an 11.4 percent

Company. But a write down of results

of September, will transform a com-

operating margin and its foodser-

in this division soured Tyson's 1994

pany that began as a feed and hatchery

vice business a 7.3 percent margin.

results and it posted a $2 million loss,

business in 1935 in Springdale, Ark.

Tyson's overall operating margin

its first in years. It eventually disposed

Tyson will move from being primar-

in 2013 was 4.0 percent. Hillshire's

of these assets.

ily a processor and marketer of fresh

$404 million in operating income in

By 1995, Tyson was the leading

meat and poultry products, albeit with

2013, and what will most likely be a

chicken firm in the US. But it was

Photo by Kevin Blayney

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