Tyson Aims to Sell More Products Across Distribution Channels 

08/09/06 Leveraging the size of Tyson Foods, Inc. by selling more products across all distribution channels is among the steps needed to create long-term value for the company’s shareholders, according to Tyson’s Chief Executive Officer.

CEO Richard L. Bond joined Tyson Chief Financial Officer Wade Miquelon in a presentation Wednesday at the Prudential Equity Group's Annual Back-to-School Consumer Conference in Boston.

Miquelon noted the steps the company has taken in recent months to return to profitability, including the implementation of approximately $200 million in cost reductions and the consolidation of beef plants. Company officials believe more than 90% of these annual savings will be fully delivered in fiscal year 2007. However, both Miquelon and Bond also acknowledged the importance of going beyond cost savings to grow the company’s top line sales.

“I’m proud of what we’ve done so far to right the ship, but there is much more we can do,” Bond said. “To thrive, not just survive, we must respond better and faster…and we will. Bond highlighted the ongoing efforts of the company’s commodity, foodservice, consumer products and international distribution channels.

“We see ourselves as a value-added food company with a commodity base, and we think this works to our advantage because we can internalize raw materials for our further-processed products,” Bond said. For example, 70% of the company’s mix of poultry products is value-added with such items as chicken nuggets, breaded strips and hot wings.

“The commodity side of our business needs to be cost efficient and cost conscious at all times,” he added. “We recognize we compete on price in this business. We probably won’t always be the lowest price, but we need to be close.”

Tyson is the world’s largest producer and marketer of chicken, beef and pork, and an estimated 300 million times every day people around the world enjoy Tyson products. “We’re going to leverage our scale to create long-term, sustainable shareholder value,” said Bond. “One of the ways we’re going to do that is by thinking across channels, across customers and across proteins.” Examples include the possibility of selling some new food service products to club stores or marketing a product originally developed for school cafeterias to retailers.

Tyson is the leading supplier of protein to the foodservice business. For example, Tyson products are used by thousands of schools across the country, including 95 of the 100 largest districts. The company is also one of the largest makers of pizza crusts and flour and corn tortillas in the U.S.