Adding Value Through
Innovation And Marketing:
Research & Development
Approach at Tyson Foods, Inc.
Confidential: All content contained herein is proprietary to Tyson Foods, Inc. and may not be distributed outside the Company without express written consent
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Who is Tyson Foods?
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Confidential: All content contained herein is proprietary to Tyson Foods, Inc. and may not be distributed outside the Company without express written consent
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Tyson: World’s Largest Protein Producer


Diversified producer of beef, chicken, and pork
FY 09 Sales by Segment
Produce one out of every four pounds of these meats
consumed in the US


One of the most recognized brands in the US retail channel

$26.7 billion of revenue for FY 2009
Export to more than 90 countries, production in 5 countries
outside the US
Prepared Foods
11%
Pork
13%
Beef
40%
Chicken
36%
Our Strategies
 Create innovative and insight-driven food solutions
 Optimize commodity business models
 Build an international enterprise
 Revolutionize the conversion of raw materials and by-products
FY 09 Sales by Channel
Refrigerated /
Deli
Other
5%
5%
International
13%
into high-margin products
Consumer
Products
46%
Foodservice
31%
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Confidential: All content contained herein is proprietary to Tyson Foods, Inc. and may not be distributed outside the Company without express written consent
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Diversified Across Multiple Proteins
Tyson
20%
Others
44%
Pilgrim's
Pride
22%
Sanderson
Farms
6%
Others
24%
National
10%
Excel
(Cargill)
22%
Tyson
22%
JBS
22%
Tyson
18%
Others
26%
JBS
11%
Hormel
8%
Smithfield
28%
Perdue
8%
Chicken Market Share
Beef Market Share
Excel
(Cargill)
9%
Pork Market Share
Data for US market only.
Chicken data per WATT Poultry 2009; does not reflect current production levels. Beef data from Cattle Buyers Weekly Top 30 Beef Packers 2008. Pork data from Cattle Buyers
Weekly Commercial Hog Slaughter 2008 (most recent available)
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Confidential: All content contained herein is proprietary to Tyson Foods, Inc. and may not be distributed outside the Company without express written consent
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Products: Quality You Can Trust
Beef
Tortillas & Crusts
Prepared Foods
Chicken
Pork
Soups, Sides, Sauces
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Confidential: All content contained herein is proprietary to Tyson Foods, Inc. and may not be distributed outside the Company without express written consent
Tyson Strategic Principles
Create innovative and insight-driven food solutions
Optimize commodity business models
Build a multi-national enterprise
Revolutionize conversion of raw materials and byproducts into high-margin initiatives
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Growing an International Enterprise
Tyson Foods 2009
international sales1
Mexico
21%
Other
40%
China
13%
Canada
5%
Russia South
Korea
5%
6%
Japan
9%
Total: $3.4bn
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 Brazil: Domestic and export diversity through
strategic acquisitions
Includes U.S. exports and in-country
production; excludes discontinued operation
 China: Partnering for success in foodservice
and retail
 Mexico: Expanding presence
 India: Capturing strong growth
Products exported to more than 90 Countries!
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Renewable Products Platforms
Core Business
New Platforms
Meal
Neutraceuticals
Fat
Pet Products
Feather-meal
Keratin/Biotech
Keratin Film
Mech. Sep. Chicken
Renewable Energy
Wet Pet Food
Feather Fiber/Nonwovens
 Revolutionizing the conversion of raw materials and by-products into high-margin productsDRAFT
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Discovery Center: Innovative Food Solutions
Tyson Discovery Center
–
19 Kitchens with a total of
1850 square meters of kitchen space
–
3700 square meter USDA inspected pilot
production plant
–
3700 square meter Office Space including
Sensory Area, Consumer Focus Group
Room and Meeting Space
•Visited by nearly every major customer to
work with the Tyson team
© Sam Fentress / Courtesy HOK
Solutions in Food Service
NEED: Foodservice Operators need products that are
perceived as a good value for their customers, but without
compromising quality or increasing food costs
SOLUTION: Tyson Foodservice launches “Value” line of
chicken and beef items that help Operators appeal to the
taste buds and pocketbooks of their customers
Solutions in Retail
NEED: Consumers want upscale flavors and restaurant
quality, but time and money are in tighter supply
SOLUTION: Tyson Consumer Products uses consumer insights
and Culinary expertise to enhance the line of Tyson Dinner
Meats giving consumers the most flavor for their dollars
Shaved Steak Beef
Right Size Filet
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Confidential: All content contained herein is proprietary to Tyson Foods, Inc. and may not be distributed outside the Company without express written consent
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Creating a Culture of Discovery
Confidential: All content contained herein is proprietary to Tyson Foods, Inc. and may not be distributed outside the Company without express written consent
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The Tyson Discovery Center
Discovery Center Facility
Tyson Discovery Center
–
19 Kitchens with a total of1850 square meters of
kitchen space
–
3700 square meter USDA inspected pilot
production plant
–
3700 square meter Office Space including Sensory
Area, Consumer Focus Group Room and Meeting
Space
© Sam Fentress / Courtesy HOK
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Discovery Center R&D Capabilities

Product Development Kitchens

Meat Case

Culinary

Technology

USDA inspected multi-protein
Pilot Plant

Consumer Research / Insights

Sensory

NPD

Packaging Lab

Shelf Life Testing
© Sam Fentress / Courtesy HOK
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The Tyson Discovery Center:
The Kitchens
 Retail Presentation Kitchen
 Foodservice Presentation Kitchen
 Culinary Resources
© Sam Fentress / Courtesy HOK
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The Tyson Discovery Center:
Pilot Plant
USDA inspected multi-protein
Chicken
Beef
Pork
“Plug & Play” capability
Flexible configuration
© Sam Fentress / Courtesy HOK
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The Tyson Discovery Center:
Consumer Center
Sensory / Taste Tests
What consumers said:
o
o
“Delicious. Tender flavor. Would make an
outstanding taco or enchilada. Seconds
please.”
“Great flavor. Was not too mild or too heavy
tasting. Wonderful taste. I would buy this
product without hesitating.”
Source: Tyson Sensory Test, November 2008
Focus Groups
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Confidential: All content contained herein is proprietary to Tyson Foods, Inc. and may not be distributed outside the Company without express written consent
Leveraging Technology for
Consumer Insights
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The Tyson Discovery Center:
Culinary Expertise
Tyson Culinary Chefs – part of the Tyson family, Culinary group
works hand in hand with R&D food technologists as well as
sales and marketing team members to develop quality
food products
• On-Trend
Classical culinary background gives chefs the working
knowledge of what is “on trend” for consumers and
operators utilizing fact-based insights
–
–
–
•
Flavor trends including ethnic flavor profiles
Texture profiles
Food and nutritional factors such as health & wellness,
convenience, taste
Scalable – By working closely with food scientists, culinary
can develop products that are scalable for
the particular need of the customer
–
–
Foodservice operators – products that satisfy the needs
of restaurant staff such as labor, ease of
preparation, waste minimization, portion controlling, etc.
utilizing the cooking platforms available to most back of the
house kitchen staffs.
At home consumers – products that meet the consumer need
for convenience, quality and taste using available consumer
appliances to fit today’s busy consumer lifestyle.
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The Tyson Discovery Center:
Culinary Expertise
What is “Culinology”?
• “Culinology®”: The fusion of culinary arts and food
technology in the food manufacturing environment.
• Research Chefs Association began in 1996
• RCA Certifications:
–
Certified Culinary Scientists (CCS)
–
Certified Research Chef (CRC)
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Culture of Discovery Leads to Success
Skills
Speed
Win
Insights
Creativity
+
Facility
© Sam Fentress / Courtesy HOK
Confidential: All content contained herein is proprietary to Tyson Foods, Inc. and may not be distributed outside the Company without express written consent
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Marketing in a “Commodity” Environment
Meeting Consumer Needs
How can you market in a commodity world?
What I can make
What individuals want
Whole Chicken
Chicken Legs
Shredded Chicken
Thigh Pieces
Flavored Thigh Strips
Wings
Beef Fajita
Meat
¼” Diced Adobo Seasoned Chicken
Thigh Fajita Meat wrapped in a
Blue Corn Tortilla served with an
Ancho-Chili Sauce
Beef Primals
 A mass customizer must first identify the needs of its customers, specifically, the
product attributes along which customer needs diverge the most.
 A mass producer must focus on identifying central tendencies so that it can target
those needs with a limited number of standard products.
 Once that information is known and understood, marketing can define its “solution
space,” clearly delineating what it will offer — and what it will not.
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Confidential: All content contained herein is proprietary to Tyson Foods, Inc. and may not be distributed outside the Company without express written consent
How to deliver Success
Success
Meeting
Consumer
Needs
With the
Right Food
Proper
Packaging &
Preparation
Positioned
Correctly at
the Shelf, in
the Media &
with the
Trade
Meet
Corporate
Logistics &
Financial
Imperatives
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Consumer Insight Comes First!
•Prove the consumer wants or needs something in the first place.
•Avoid “if you build it, they will come” mentality.
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Confidential: All content contained herein is proprietary to Tyson Foods, Inc. and may not be distributed outside the Company without express written consent
Marketing has to be relevant to EACH consumer
•Don’t assume that every product will satisfy every consumer’s needs
•“Generic” is not a brand
•Differentiation is the key to success
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Communicating the Product Solution
• Establish a positioning that supports the consumer need but does not overpromise product delivery.
• Deliver this promise in all media and packaging graphics.
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Confidential: All content contained herein is proprietary to Tyson Foods, Inc. and may not be distributed outside the Company without express written consent
A Few Consumer Trends Tyson is Tracking
And how consumer insights leads to product development at Tyson Foods, Inc.
What trends do consumers care about?
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The Fresh Factor
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The Fresh Factor
Fresh will be a foremost factor in restaurant menu and in-home dining concept developments
Great Food
starts with
FRESH
Ingredients
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Simplicity & Convenience
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Simplicity & Convenience
Eliminate the clutter &
reduce the “noise”
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Simplicity & Convenience
In the food and drink world, convenience means far more than ease and portability
Convenience also means
assistance
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A Simple Balance for Health
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A Simple Balance for Health
Could health and wellness simply become a way of life?
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Graphic Source: 2008 Mintel Group
A Simple Balance for Health
Could health and wellness simply become a way of life?
Is Portion Control The Answer?
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Customization
making a product special to one
person caters to their sense of
empowerment
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Customization
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Authenticity
The balance between “real” and “perceived as real”
Authenticity can be
defined as:
something real.
something genuine.
something true.
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I Want Authentic ... As Long As I Know What It Is...
Braised Beef Brisket
with Mild Chili Sauce
Beef Barbacoa
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Confidential: All content contained herein is proprietary to Tyson Foods, Inc. and may not be distributed outside the Company without express written consent
Five Final Thoughts To Consider
1. Fully Understand Your Product Offering:
Commodity or Differentiated Value
Recognize the type of
environment in which you
participate.
Understand where a
“commodity” CAN and
CANNOT be differentiated
to add value for consumers.
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41
2. Your Product Offering Must Satisfy The
Consumer’s Need!
It is the CONSUMER’S Palate, not
the “Royal Palate” that is
important.
It doesn’t matter how much YOU
like it if your consumer does not.
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3. Consumer Needs Change Much More
Rapidly Than Ever Before!
Previous 100 Years
The last 3 Years
You must be responsive to
ever changing consumer needs
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4. Being “Fashionably Late” Is Unacceptable
In Product Launches
Being “fashionably late” may
work for parties, but not for
product launches
You can’t afford to be last to
the party.
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5. Know What “Success” Looks Like
Before You Even Start
Don’t drive by the
rear-view mirror.
Know where you are
headed before you
embark on the
journey.
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Thank you!
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Confidential: All content contained herein is proprietary to Tyson Foods, Inc. and may not be distributed outside the Company without express written consent
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