Encouraged by a successful third quarter, Smithfield Foods, Inc. forges ahead with its transformation to a consumer packaged meats company.
“This transformation is providing us with increasingly high quality and more consistent earnings,” said Larry Pope, president and chief executive officer, in a March 7 call with financial analysts to discuss earnings.
Smithfield’s growth strategy includes a recently announced partnership with Kansas City Sausage Co. L.L.C. to extend its reach into breakfast and dinner sausage platforms, as well as the January opening of a hot dog plant in North Carolina.
“We believe this plant will deliver superior product at substantially lower cost and give us a leadership position in the hot dog category,” Mr. Pope said. “The product is cooked in the package, providing the most safe hot dog on the market.”
The company plans to focus on targeting value-added acquisitions, upgrading plant equipment and building a strong product pipeline.
“Our innovation will be focused in five strategic areas: packaging, health and wellness, convenience, taste and pork consumer solutions,” Mr. Pope said. “These platforms have a strong focus on product differentiation, highlighting quality and convenience; better-for-you food, including lower sodium, lean protein, natural ingredients and new taste experiences.”
Packaged meats sales contributed to a 3% increase in income during the quarter, led by double-digit growth of Smithfield bacon, Eckrich dinner sausage and Armour dry sausage.
“Our packaged meats business in on fire,” Mr. Pope said. “We’re extremely pleased with what’s going on there.”
