O U R CO M PA N Y 2 0 07
TABLE OF CONTENTS
EXECUTIVE MESSAGE
2
PERFORMANCE CHARTS
4
SMITHFIELD UP CLOSE
7
OUR FAMILY OF COMPANIES
23
FINANCIALS
46
MANAGEMENT BOARD, CORPORATE OFFICERS, DIRECTORS
49
CORPORATE INFORMATION
50
FINANCIAL HIGHLIGHTS
Fiscal Years Ended (in millions, except per share data)
Sales
April 29, 2007
April 30, 2006
May 1, 2005
$ 11,911.1
$ 11,403.6
$ 11,248.4
Income from continuing operations
188.4
185.2
300.7
Net income
166.8
172.7
296.2
1.68
1.65
2.68
Income from continuing operations per diluted share
Net income per diluted share
1.49
1.54
2.64
Weighted average diluted shares outstanding
111.9
112.0
112.3
$ 477.7
$ 381.6
$ 193.2
219.3
200.1
187.0
1,372.5
1,161.3
1,421.2
Additional Information
Capital expenditures
Depreciation expense
Working capital
1
Total debt
3,092.9
2,558.3
2,274.7
Shareholders’ equity
2,240.8
2,028.2
1,901.4
58.0%
55.8%
54.5%
Total debt to total capitalization
2
1 Total debt is equal to notes payable and long-term debt and capital lease obligations including current portion.
2 Computed using total debt divided by total debt and shareholders’ equity.
With sales approaching $12 billion in fiscal 2007, Smithfield Foods is
the world’s #1 hog producer and #1 pork processor.
In the United States, our market shares also make us the…
#1
#1
#1
#1
turkey processor
cattle feeder
bacon producer
smoked ham producer
#1
#1
#1
#1
spiral hams producer
smoked pork chops producer
poultry hot dogs producer
deli salami producer
A LEADER IN BRANDED PACKAGED MEATS
Smithfield Foods packaged meats are among the most trusted and sought-after. From national brands and regional
powerhouses in the United States to some of the best-known European brands, here are just a few that are prized by retail,
foodservice, and deli customers alike.
Æ
MAP OF OPERATIONS
Smithfield Foods now has operations in 13 countries
through wholly owned subsidiaries and joint ventures.
UNITED STATES
MEXICO
BELGIUM
FRANCE
GERMANY
ITALY
POLAND
PORTUGAL
ROMANIA
SPAIN
THE NETHERLANDS
UNITED KINGDOM
CHINA
Wholly owned Smithfield
Foods operations as well as the
Butterball, LLC, and Five Rivers
Ranch Cattle Feeding LLC joint
ventures in the United States.
Our presence in these countries
is through a 50% ownership
stake in Groupe Smithfield.
Smithfield owns a 23% stake in
Campofrio.
Our presence in China and
Mexico is through a 50%
ownership stake in joint ventures.
EXECUTIVE MESSAGE
To Our Stakeholders:
Smithfield Foods reported income from continuing operations for fiscal 2007 of $188.4 million, or $1.68 per diluted
share, versus $185.2 million, or $1.65 per diluted share, last year. Sales were $11.9 billion, compared to $11.4 billion
in the prior year. Considering the negative impact of increased grain prices on all of our live production operations,
I am very pleased with the results, particularly in the international and pork segments.
In fiscal 2007, Smithfield broadened and strengthened its base through acquisitions that were immediately accretive
to earnings. We are reshaping the company through integrating these acquisitions and executing a strategy to
realign and rationalize our manufacturing capacities.
o Through a 50/50 joint venture with Oaktree Capital Management, we acquired Sara Lee’s European Meats
business. This is a strong, branded $1.5 billion business with large positions in France, Portugal, the
Netherlands, and Germany. We have merged our Groupe Jean Caby assets with the acquired French
operations, and the new company, Groupe Smithfield, is the largest packaged meats producer in Europe.
o In acquiring the branded meats business of ConAgra Foods, Inc., we increased the volume of our core
packaged meats operations in the United States by 20 percent. This is a $1 billion business with
well-known brands such as Armour and Eckrich, with large shares in key product categories such as
precooked bacon, smoked sausage, and dry sausage.
o We acquired ConAgra’s Butterball turkey business through a 49-percent-owned joint venture with
Maxwell Farms. The combination of Butterball and Carolina Turkeys, owned by the joint venture, was
renamed Butterball, LLC, and is now the largest U.S. turkey producer, with sales of more than $1 billion.
o A week after the closing of fiscal year 2007, we completed the acquisition of Premium Standard Farms,
a vertically integrated provider of pork products. This enabled Smithfield to capitalize on our vertically
integrated model and expand our share in hog production to 17 percent from 14 percent. The merger
increased our share in pork processing to 31 percent from 26 percent.
Europe represents significant potential for Smithfield, and we continue our focus on building a solid pan-European
business. The Sara Lee European Meats acquisition has provided the vehicle to pursue broad, branded distribution
in Western Europe. Simultaneously, our long-term strategy is to build vertically integrated and low-cost production
in Eastern Europe.
In Poland, we have become the largest hog producer and pork processor and will use vertical integration to expand
the business. After years of investment, we have achieved solid profitability.
In total, we plan to invest up to $1 billion in Romania by 2010 through company-owned and contract grower
agreements to revitalize the pork industry and develop a fully-integrated business model and infrastructure.
2
This year, we successfully reopened a mothballed pork
processing plant that we acquired, and we will continue to
ramp up production there.
Domestically, Smithfield continues to evaluate manufacturing
operations to drive out significant costs and become a low-cost,
highly efficient producer. We plan additional changes to realign
capacity while we maintain our focus on utilizing our raw
materials internally and eliminating low-margin business. Our
strategy is to invest in new technology and processes to enable
our packaged meats business to become a much stronger
component of our profits.
This year our commitment to corporate social responsibility remained an integral component of our business
strategy. Consequently, Fortune prominently ranked Smithfield on its annual list of America’s Most Admired
Companies for the fifth consecutive year and ranked our company first among beef and pork producers.
USA Today recently listed the top-performing stocks over the past 25 years, and it was gratifying to see Smithfield
listed as number 21, just behind Berkshire Hathaway, with a stock appreciation of 19,414 percent. As always, we
thank our employees, customers, and suppliers for making this possible.
Paul J. Fribourg, chairman, president, and chief executive officer of ContiGroup Companies, Inc., which owned
39 percent of Premium Standard Farms’ shares, has been elected a member of Smithfield’s board of directors.
In addition, Michael J. Zimmerman, executive vice president and chief financial officer of ContiGroup, has been
appointed an advisory director. They will be valuable additions to the board.
Looking forward, in spite of the anticipated increase in grain costs, I am very optimistic about the future. Grain
prices, as well as increases in freight and energy costs, are impacting our operations. However, we are focusing on
realigning our product mix and directing our efforts in packaged meats toward our strong regional brands, as well
as driving out inefficiencies. All of this bodes well for Smithfield Foods.
C. Larry Pope
President and Chief Executive Officer
June 15, 2007
3
REAPING THE BENEFITS OF VERTICAL INTEGRATION
Smithfield Foods embarked on a vertical integration strategy in 1987 but ramped up the effort
significantly in 1999. Our participation in both hog production and pork processing has provided a steady
supply of high-quality raw materials. It has also resulted in more consistent earnings and cash flow.
operating profit
in millions
price per cwt
$700
$60.00
$54.04
$600
$46.15
$500
$41.67
$480.9
$41.68
$330.0
$400
$300
$266.6
$211.4
$125.7
$213.1
$148.0
$50.00
$40.00
$32.94
$200
$100
$47.74
$178.1
$30.00
$166.8
$153.0
$228.0
$20.00
$0
$10.00
$-108.4
$-100
$-200
$0.00
FY2002
FY2003
FY2004
FY2005
FY2006
FY2007
Pork Processing Operating Profit
Hog Production Operating Profit
4
Average Live Hog Market Price
INCREASING OUR FOCUS ON CONVENIENCE PRODUCTS
Although traditional products still account for most of our
pork segment’s packaged meats volume, sales of higher-
LBS MM
3,000
964.9
margin convenience items have grown significantly.
2,250
760.1
691.3
582.2
1,500
1,888.4
1,626.7
1,433.4
1,590.0
750
0
FY2004
FY2005
FY2006
FY2007
Pork Segment - Packaged Meats Volume
Convenience
Traditional
Volume of traditional products increased by 455 million
LBS MM
1000
pounds over the past three years, while volume of convenience
382.7
750
items grew by 383 million pounds over the same period.
500
455.0
177.9
250
109.1
193.3
156.6
0
FY2005
vs FY2004
FY2006
vs FY2004
FY2007
vs FY2004
Pork Segment - Packaged Meats Volume Growth
Convenience
Traditional
This means that the volume of convenience products
30%
has grown at a consistently higher rate than that of
24%
traditional products.
18%
26.9
18.7
16.1
12%
10.9
10.0
6%
2.3
0
FY2005
vs FY2004
FY2006
vs FY2005
FY2007
vs FY2006
Pork Segment - Annual Volume Growth Rate [% Change]
Traditional
Convenience
5
PENETRATING U.S. REGIONAL PACKAGED MEATS MARKETS
Bacon
CENTRAL
Lb. Share – 24%
Rank #1
Distribution – 100%
NORTHEAST
Lb. Share – 13%
Rank #2
Distribution – 96%
SOUTH
WEST
Lb. Share – 23%
Rank #1
Distribution – 99%
Lb. Share – 10%
Rank #4
Distribution – 83%
Smoked Meats
CENTRAL
Lb. Share – 55%
Rank #1
Distribution – 92%
NORTHEAST
Lb. Share – 54%
Rank #1
Distribution – 88%
SOUTH
WEST
Lb. Share – 32%
Rank #1
Distribution – 96%
Lb. Share – 55%
Rank #1
Distribution – 96%
Bacon Source: Nielsen Co. Avg acv 52 W/E 4/21/07 Smoked Meats Source: Fresh Look Marketing Avg distribution 52 W/E 4/29/07
6
SMITHFIELD UP CLOSE
From the acquisition of several leading U.S. brands to our
European expansion, we have continued to build upon the
leadership position Smithfield Foods enjoys in many areas
of our industry. In this section, we highlight our purchase of
the Butterball turkey brand, our growing opportunities in
packaged meats, our marketing partnership with celebrity cook
Paula Deen, and other key developments of the past year.
GROUPE SMITHFIELD JOINT VENTURE
EUROPE’S LARGEST IN PACKAGED MEATS
No stranger to the European market, Smithfield Foods upped the
ante considerably this past year. Building on existing positions
in France, Poland, and Romania, Smithfield teamed with Oaktree
Capital Management to acquire Sara Lee’s European Meats
business in August 2006. The 50/50 joint venture—Groupe
Smithfield, S.L.—also includes Smithfield’s established Group Jean
Caby subsidiary. With annual sales of $1.9 billion and 6,650
employees, Groupe Smithfield has emerged as Europe’s largest
packaged meats company.
Like other recent acquisitions made in the United States, the
Groupe Smithfield deal has allowed Smithfield Foods to add more
higher-margin, branded offerings to the company’s product mix.
The acquired brands are among the best known in Western Europe,
including France’s Aoste and Justin Bridou, The Netherlands’
Stegeman, and Portugal’s Nobre. A total of 25 plants produce dry
sausage, dry ham, cooked ham, cooked sausage, and a long list of
other products.
From its new headquarters in Paris, the Groupe Smithfield team
has been busy this past year integrating the company’s Jean Caby
and Groupe Aoste French operations and optimizing their
combined manufacturing platform. New products on the way
include a broader variety of low-salt and low-fat meats under the
Weight Watchers label. Finishing the year significantly ahead of its
original sales plan, the company has increased its targets for 2008.
ABOUT THIS PHOTO
Walk into the Boucherie Duret Dupont in Paris, and it’s a good bet that Monsieur Dupont will have a large
assortment of Aoste hams and other Aoste products on hand for customers who appreciate high-quality
meats. The Aoste brand originated in France, but it is also Groupe Smithfield’s leading brand in Belgium
and Germany.
9
RECENT ACQUISITIONS ADD STRENGTH
TO U.S. PACKAGED MEATS OFFERINGS
For supermarket shoppers in the Midwest, the Eckrich brand is
nearly synonymous with smoked sausages and breakfast links. The
market leader in nine states, its heritage dates back to 1894. It’s
also one of the latest additions to Smithfield Foods’ rapidly growing
packaged meats offerings. In October 2006, Smithfield acquired
Eckrich as well as the Armour, Margherita, and LunchMakers
brands from ConAgra Foods. Now operating under the banner of
Armour-Eckrich Meats LLC, the Naperville, Illinois-based company
boasts annual sales exceeding $1 billion. Precooked and other
convenience items account for approximately 90 percent of sales.
The acquisition supports Smithfield’s strategy of utilizing raw
materials internally and migrating to higher-margin, furtherprocessed products. For example, Smithfield acquired the Cook’s
ham business from ConAgra earlier in 2006. With annual sales of
approximately $330 million, Cook’s produces traditional and spiralsliced smoked bone-in hams, corned beef, and other smoked meat
items sold through supermarket chains and independent grocers.
Armour-Eckrich Meats has added approximately 600 million
pounds of packaged meats to Smithfield’s overall volume, with
large market shares in hot dogs, dinner sausages, and luncheon
meats. In fact, it contributed to a 20-percent increase in Smithfield’s
packaged meats volume during fiscal 2007. Since the acquisition,
Armour-Eckrich has focused on increasing distribution in existing
markets and introducing a number of premium items. Among
them, three new flavors of Eckrich Smoked Sausage—Chipotle,
Chorizo, and Baja Blend—hit store shelves in July 2007.
ABOUT THIS PHOTO
Mothers want the best for their children, so it’s no surprise that they have made the Eckrich and Armour
brands a popular supermarket selection for breakfast, a backyard barbecue, or the family dinner table.
Armour-Eckrich Meats distributes these and other brands that stand for flavor, high quality, and value
through the foodservice channel as well.
11
BUTTERBALL ACQUISITION CATAPULTS
SMITHFIELD TO TOP POULTRY RANKS
Mention Smithfield Foods, and it’s a good bet that the next words
out of the average person’s mouth will be “ham” or “pork.”
Smithfield is, indeed, the world’s largest pork processor. However,
the company also owns 49 percent of Butterball, LLC, the No. 1
U.S. turkey producer and processor with annual sales exceeding
$1 billion. Smithfield’s long-standing Carolina Turkeys joint venture
with Maxwell Farms, Inc., acquired the celebrated Butterball brand
in October 2006 from ConAgra Foods, and it adopted the Butterball
name in the process.
The acquisition has catapulted Smithfield to the top ranks of the
poultry industry and added a national brand with more than a half
century of brand equity to Smithfield’s packaged meats portfolio.
It also complements the company’s strengths in pork and beef.
Smithfield is the nation’s fifth-largest beef processor and, through
another joint venture, the world’s largest cattle feeder.
Beyond the whole birds that grace Thanksgiving dinners across the
country, Butterball’s seven U.S. plants produce a broad range of
retail, foodservice, and deli products for customers in 20 countries.
The company sells cooked turkey breasts, turkey sausages, ground
turkey, turkey bacon, and lunchmeat, to name just a few.
The Butterball brand continued to widen its lead in the marketplace during the past year, helped in part by the 5-percent increase
in sales of pre-packaged whole turkeys. The company also launched
an All Natural line of cooked deli breasts and introduced several
chicken varieties of Butterball lunchmeats.
ABOUT THIS PHOTO
12
For more than 50 years, Butterball turkeys have been a staple of Thanksgiving dinners such as the one being
enjoyed by this Florida family. Moreover, Butterball is the only national poultry brand to offer a complete line
of premium turkey and chicken products for a variety of year-round meal occasions. A bit of trivia: The
Butterball name was originally chosen to characterize a new breed of broad-breasted white-feather turkeys.
NEW KINSTON PLANT PAVES THE WAY
FOR PACKAGED MEATS EXPANSION
Among Smithfield Foods’ current strategic goals, utilizing more
raw materials internally and migrating to higher-margin, furtherprocessed products top the list. The company has been busy
acquiring several leading packaged meats brands in the United
States and Europe over the past year for just this purpose. At the
same time, Smithfield has also been addressing capacity issues
among core brands to pave the way for their continued growth.
Nowhere is this more evident than in the new deli ham and sliced
lunchmeat plant that The Smithfield Packing Company opened in
Kinston, North Carolina, in 2006. The $100 million facility, dubbed
“K2” to distinguish it from the company’s other processing
operation across town, already produces 90 million pounds of
packaged meats annually for the retail, foodservice, and deli
channels. Products bearing the Smithfield and Gwaltney brands fill
departing tractor-trailers, as do popular regional brands such as
Lykes, Valleydale, and Esskay. With 238,000 square feet, K2 has the
capacity to produce up to 130 million pounds each year to serve
Smithfield Packing’s markets along the East Coast. Among its other
benefits, K2 has allowed Smithfield Packing to close two other
plants and manufacture their products far more efficiently.
The most automated ham processing plant in the world, K2 has
been built from the ground up to consume less water than
traditional plants. It also employs the latest in food safety
technology. For example, the Armor Inox Thermix™ system that
cooks and chills the hams virtually eliminates the need for workers
who monitor the process to touch products after raw meat is first
stuffed into casings.
ABOUT THIS PHOTO
14
Smithfield Packing Company’s K2 plant took 13 months to construct, and it employs approximately
300 people. Among them, Gritzel Morales is busy inspecting Smithfield Virginia Brand half hams before
they undergo the pasteurization process. Built with a focus on enhanced food safety, K2 houses its seven
slicing lines in separate halls with dedicated drainage and air handling systems.
PAULA DEEN AND SMITHFIELD DEVELOP
WAYS OF PROMOTING THE FAMILY MEAL
Getting families to sit down to meals together on a regular basis
can be challenging these days, but Smithfield Foods has enlisted a
secret weapon on this front. Since September 2006, the company
has teamed with celebrity cook Paula Deen in a partnership that
includes community outreach efforts, personal appearances,
Web-based recipe and meal-preparation tips, and new products.
With her two shows on the Food Network, six cookbooks, and
Cooking with Paula Deen magazine, food lovers across the country
are familiar with the ubiquitous Deen and the Southern spell she
casts on her dishes. A longtime user of Smithfield products, she
hopes to make people feel more confident in selecting cuts of meat
that take less time to prepare, are easy to make, and are wellbalanced for family members.
Not surprisingly, studies by Iowa State University and other schools
have found that the family meal offers clear benefits. Along with
providing children with better nutrition, this time together allows
parents to teach table manners, social skills, family values, a sense
of community, and basic cooking skills.
In July, Smithfield launched a national Cable TV ad campaign
featuring Deen. The 30-second spots feature Deen telling consumers
about all the wonderful, easy-to-fix recipes using Smithfield
products that she has waiting for them at Smithfield.com. In the
first four TV spots running this summer, Paula entices viewers with
her delicious recipes for Smithfield Smoked Sausage, Marinated
Pork Tenderloin, Deli Thin Sliced Tub Lunchmeat, and Naturally
Hickory Smoked Bacon.
ABOUT THIS PHOTO
In her home kitchen in Savannah, Georgia, Paula Deen puts the finishing touches on a Smithfield spiralsliced half-ham. Her homemade glaze contains premium peanuts from The Peanut Shop of Williamsburg, part
of The Smithfield Specialty Foods Group. In January 2007, this Smithfield subsidiary launched a line
of sauces and seasonings under the Paula Deen brand.
17
SMITHFIELD’S CULINARY THINK TANK
PUTS INNOVATION ON THE MENU
How does a restaurant shave enough minutes off a dish’s
preparation time to add it to the menu? Ask Certified Master
Chef Michael Formichella. He was in his office at the Smithfield
Innovation Group (SIG) when a call came in from a representative
of Smithfield Foods’ national account team. One of its customers, a
large chain of casual dining restaurants, had a problem: It wanted
to serve a double-cut boneless pork loin chop wrapped in AppleWood Smoke bacon, but the kitchen staff couldn’t find a way to
cook the dish quickly enough. Formichella dispatched a member
of his team, who analyzed the restaurant’s preparation techniques
and demonstrated a different way to sear the meat and hold it in
the oven. That shaved six minutes off its prep time—a lifetime in
the restaurant business—and the dish was added to the menu.
For SIG, challenges like this add up to business as usual. Since
its founding in 2003, this five-member culinary think tank has
provided virtually all of Smithfield’s independent operating
companies with solutions to specific customer needs as well as
offering new product ideas. Formichella, whose lengthy resumé
includes a stint as executive chef at a five-star restaurant, has
been with SIG since its inception. He took over the reins in 2006.
Among the past year’s successes, SIG helped the Smithfield
Specialty Foods Group leverage its relationship with celebrity
cook Paula Deen by developing a line of sauces and seasonings.
Introduced in January 2007, Paula Deen Collection Sauces &
Seasonings have been a big hit on the QVC home shopping
network and among catalog shoppers. A line of Simply Southern
heat-and-eat side dishes are on the way as well.
ABOUT THIS PHOTO
18
Chef Michael Formichella puts the entrepreneurial talents of the Smithfield Innovation Group to work on
a year-round basis for the Smithfield Foods family of companies. He frequently hits the road to present
new dishes to retailers and restaurant chains and often hosts customers at the company’s test kitchen in
Buffalo Grove, Illinois.
CORPORATE SOCIAL RESPONSIBILITY
TAKES MANY FORMS AT SMITHFIELD
Thanks to Smithfield Foods’ John Morrell & Co. subsidiary, 25 needy
high school seniors from Sioux Falls, South Dakota, have dually
enrolled at a two-year school where they are pursuing their dreams
of a post-secondary education. These students are the first to
benefit from Learners to Leaders, a national educational alliance
funded by the Smithfield-Luter Foundation. Made up of Smithfield’s
independent operating companies and local education partners,
Learners to Leaders wants to close the economic gap that keeps
many high school students from obtaining further education.
Participating students are typically the first generation in their
families to continue beyond high school.
Subsidiaries in Green Bay, Wisconsin, and Denison, Iowa, have
since launched their own Learners to Leaders programs, with
several more in the works. The Smithfield-Luter Foundation
supports a number of other education programs as well, including
the work of An Achievable Dream. This organization provides
underprivileged children in the Newport News, Virginia, area (the
student in the far right photo among them) with a solid education
that prepares them for college. As sponsor of its 2006 high school
graduating class, Smithfield has given more than 30 students each
a merit scholarship worth $2,000 annually for four years of college.
Smithfield has also made protecting the environment, ensuring
worker safety, improving animal welfare, and other areas of
corporate social responsibility a priority. For example, the company
is helping fund the Ducks Unlimited Sound CARE initiative in
North Carolina as part of the $2 million contributed annually for
the state’s environmental enhancement grants. Begun in 2003,
Sound CARE has conserved or restored some 10,000 acres of
wetlands to date such as the Mattamuskeet National Wildlife
Refuge (right). By joining the Chicago Climate Exchange (CCX) in
February 2007, Smithfield has committed to cutting the company’s
greenhouse gas emissions in the United States by a minimum of
6 percent by 2010.
20
OUR ORGANIZATIONAL STRUCTURE
SMITHFIELD FOODS, INC.
Pork
Smithfield Packing Company, Inc.
The Smithfield Specialty Foods Group
John Morrell & Co.
Armour-Eckrich Meats LLC
Curly’s Foods, Inc.
Cumberland Gap Provision
Farmland Foods, Inc.
Cook’s Hams, Inc.
Patrick Cudahy, Inc.
North Side Foods
Stefano Foods, Inc.
Smithfield RMH Foods, LLC
Smithfield Innovation Group
Beef
Smithfield Beef Group
Five Rivers Ranch Cattle Feeding LLC1
International
Europe
Animex (Poland)
Groupe Smithfield, S.L. (Europe)1
Smithfield PROD (Romania)
Smithfield Foods, Ltd. (U.K.)
Campofrio (Spain)2
Other
Maverick Food Co. Ltd. (China)1
Norson (Mexico)1
Hog Production
Murphy-Brown, LLC
Other
Butterball, LLC1
1 Joint venture
2 Smithfield Foods owns a 23% stake.
OUR FAMILY
OF COMPANIES
A series of successful acquisitions completed largely over the
past decade have transformed Smithfield Foods into a global
food company with annual revenue approaching $12 billion.
Here is a breakdown of our fiscal 2007 sales by operating
segment: Pork (59%), Beef (19%), Hog Production (14%),
International (7%), and Other (1%).
Our operating companies and joint ventures maintain their
individual identities, but together they make Smithfield Foods
a leader in several key categories. The following pages provide
snapshots of these companies, including selected brands and
markets as well as highlights from the latest fiscal year.
Founded in 1936 by Joseph W. Luter and his son, Joseph W. Luter, Jr., The Smithfield Packing
Company today enjoys annual sales of more than $2.5 billion. Smithfield Packing’s primary
lines of business include fresh pork, smoked meats, bacon, cooked hams, and hot dogs for
HEADQUARTERS:
Smithfield, VA
PRESIDENT:
Joseph W. Luter, IV
retail, foodservice, and deli channels. The company exports products to more than 30
countries. In addition to the Smithfield brand, its Gwaltney, Esskay, and Valleydale products
EMPLOYEES: 12,000
are among the leaders in their respective markets. The Smithfield Specialty Foods Group
is home of the Genuine Smithfield Ham, The Peanut Shop of Williamsburg, and other
gourmet offerings.
SUBSIDIARIES
i Smithfield Specialty Foods Group (see profile on pg. 35)
MAJOR BRANDS
i Smithfield
i Smithfield Tender N Easy
i Smithfield Self Basting
i Gwaltney
i Great
i Esskay
i United States
i South Korea
i Russia
i Japan
i Mexico
i European Union
i China
i Canada
MAJOR MARKETS
24
www.smithfield.com
PROCESSING FACILITIES
i Smithfield, VA
Fresh pork, bacon, sausage
i Kinston, NC
Smoked hams, water-cooked hams
i Landover, MD
Smoked hams
i Elon, NC
i Wilson, NC
Dry-cured hams
Bacon
i Portsmouth, VA
i Tar Heel, NC
Franks, lunchmeat
Fresh pork
i Plant City, FL
Smoked hams, franks
FISCAL 2007 HIGHLIGHTS
F
i Forged a marketing partnership with Paula Deen that has
i Opened the most modern, efficient cooked-ham plant in
generated increased consumer awareness of the Smithfield
the United States in Kinston, North Carolina, positioning
brand and substantial interest among trade partners
Smithfield as a leading provider of sliced and whole deli
ham and turkey products for retail and foodservice
i Expanded retail distribution level of Smithfield bacon in
channels
core Eastern U.S. markets from 69 percent to 80 percent,
according to ACNielsen
i Increased sales of Gwaltney-branded hot dogs by 3 percent
over the previous year, securing Gwaltney’s position as the
i Experienced double-digit increases in deli and foodservice
No. 1 brand of retail hot dogs in its core marketing area
sales; precooked bacon volume jumped by more than
200 percent with launch of new capacity
i Developed solid export business in European Union with
other Smithfield subsidiaries as well as external customers
and the No. 4 brand of hot dogs in the United States
i Introduced the One Step Closer™ line of marinated stuffed
pork in response to consumer demand for great-tasting,
easy-to-prepare meals
i Installed CO2 stunning at its plants in Smithfield, Virginia,
and Tar Heel, North Carolina
25
OUR FAMILY OF COMPANIES
John Morrell & Co. was founded in England in 1827 and is the oldest continuously operating
meat manufacturer in the United States. It enjoys annual sales of approximately $2 billion.
Serving the retail, foodservice, and deli channels, John Morrell & Co.’s primary product lines
include smoked sausages, hot dogs, natural smoked hams, bacon, deli meats, corned beef, and
fresh pork products. The company sells products under the flagship John Morrell brand and
HEADQUARTERS:
Cincinnati, OH
PRESIDENT:
Joseph B. Sebring
EMPLOYEES: 6,700
more than a half-dozen others. Its celebrated Kretschmar brand offers a full line of Germanstyle favorites for the service deli, including hams, turkey, cooked beef, sticks, and loaves.
John Morrell & Co. is also one of the nation’s largest producers of private-label packaged meats.
SUBSIDIARIES
i Armour-Eckrich Meats LLC
(see profile on pg. 28)
i Mohawk Packing
i Cumberland Gap Provision
i Henry’s Hickory House
(see profile on pg. 29)
i Curly’s Foods Inc.
(see profile on pg. 29)
MAJOR BRANDS
i John Morrell
i Mosey’s Corned Beef
i EZ Cut Hams
i Kretschmar Deli
i Rath Blackhawk
i Hunter
i Midwest U.S.
i Northwest U.S.
i Eastern Asia
i Northeast U.S.
i Southwest U.S.
MAJOR MARKETS
26
www.johnmorrell.com
PROCESSING FACILITIES
i Sioux Falls, SD
Fresh pork, sausages, smoked meats
i Sioux City, IA
Fresh pork
i Great Bend, KS
i Cincinnati, OH
Fresh pork, smoked meats
Hot dogs, sausages, lunchmeats
i San Jose, CA
Corned beef, smoked meats
FISCAL 2007 HIGHLIGHTS
S
i Restaged John Morrell brand with new logo and package
i Gained more than 800 distribution points as a result of
graphics, a new advertising and promotional campaign, and
new retail offerings
NFL quarterback Carson Palmer as brand spokesperson
i Rolled out 13 cheeses for the service deli channel under
i Introduced several new retail products, including ham
the Kretschmar brand
and poultry cuts in resealable packages, cocktail smokies,
resealable tub bacon, Bavarian branded boneless hams,
quarter spiral bone-in hams, deli party trays, and cocktail
party trays
i Launched Applewood naturally smoked bacon for
foodservice customers
i Grew to the No. 1 brand of ham cuts in the United States
and the No. 2 brand of cocktail links
27
OUR FAMILY OF COMPANIES
www.armour-eckrich.com
Armour-Eckrich Meats LLC enjoys annual sales exceeding $1 billion, 90 percent from
precooked and other convenience items for the retail, deli, and foodservice channels. Anchored
by the venerable Eckrich and Armour brands, the company’s primary product lines include
dry and smoked sausage, lunchmeat, precooked bacon, hot dogs, portable lunches, and deli
products. Eckrich brand sausage is ranked No. 1 in sales in nine U.S. markets, with Armour a
HEADQUARTERS:
Naperville, IL
PRESIDENT:
Michael E. Brown
EMPLOYEES: 3,600
leading value brand in hot dogs. LunchMakers is the No. 2 portable lunch brand nationally.
MAJOR BRANDS
i Eckrich
i Armour
i Margherita
i Texas
i Northeast U.S.
i St. Charles, IL
i Peru, IN
i Mason City, IA
i Hastings, NE
i Omaha, NE
i Junction City, KS
i St. James, MN
i Lufkin, TX
MAJOR MARKETS
i Central U.S.
PROCESSING FACILITIES
FISCAL 2007 HIGHLIGHTS
i Developed Armour Sizzle & Serve frozen breakfast
links and patties
i Prepared three new Eckrich smoked sausage flavors for
summer 2007 launch: Chipotle, Chorizo, and Baja Blend
i Restaged Eckrich Ready Crisp precooked bacon with
upgraded product quality and improved packaging
28
i Launched Eckrich Fried Favorites, among the industry’s
first line of fried meat items for the deli case
i Upgraded the package graphics for Armour meatballs and
began work on a similar initiative for Armour hot dogs
i Created dedicated sales, marketing, operations, logistics,
and finance teams following 2006 acquisition by Smithfield
HEADQUARTERS:
Edina, MN
www.curlys.com
www.cumberlandgapprovision.com
HEADQUARTERS:
Middlesboro, KY
PRESIDENT:
John Pauley
PRESIDENT:
R.D. McGregor
EMPLOYEES: 700
EMPLOYEES: 325
Established in 1988, Curly’s Foods, Inc. supplies leading
Cumberland Gap, the first great gateway to the West, is also
restaurant chains with raw and fully cooked ribs as well
home to great-tasting hams, sausages, and other specialty
as smoked pork, beef, and chicken entrees. The company’s
packaged meats smoked using 100-percent genuine hickory
retail offerings can be found at many club stores and
wood. Founded in 1979, the company makes the best-selling
supermarkets. At its plant in Sioux City, Iowa, an authentic
semi-boneless ham in the United States. It serves some of the
pit smoker gives Curly’s meats genuine, wood-smoked
nation’s largest supermarket chains with branded products
barbecue flavor.
and a substantial private-label business.
MAJOR BRANDS
MAJOR BRANDS
i Curly’s Foods
i Cumberland Gap
MAJOR MARKETS
MAJOR MARKETS
i United States
i Taiwan
i Mexico
i Colombia
i Olde Kentucky
i United States
FISCAL 2007 HIGHLIGHTS
FISCAL 2007 HIGHLIGHTS
i Revenue increased 17 percent due mainly to growth in
i Sales rose by 6 percent due to success of semi-boneless
retail sales and in the cooked beef foodservice category
i Introduced cooked carnitas and prime rib for foodservice customers and cold-smoked ribs for retailers
ham and increased private-label business
i Successfully completed transition to new order-entry
and billing system
29
Farmland Foods, Inc., derives the majority of its more than $2.2 billion in annual sales from
a broad selection of pork products for retail and foodservice customers. Its primary lines of
business include fresh pork, case-ready pork, hams, bacon, fresh sausage, cooked sausage,
lunchmeat, dry sausage, and specialty sausage. Since its founding in 1959, Farmland Foods has
PRESIDENT:
George Richter
maintained a proud heritage of working side by side with American farm families. Smithfield
EMPLOYEES: 6,500
Foods acquired the company in 2003. Farmland Foods has a large and growing international
business, exporting products to more than 60 countries across six continents. Its Carando Foods
subsidiary is one of the largest suppliers of Italian deli and specialty meats in the United States.
SUBSIDIARIES
i Carando Foods
i Cook’s Hams, Inc. (see profile on pg. 32)
MAJOR BRANDS
i Farmland
i Carando
i Cook’s
MAJOR MARKETS
S
S
i United States
i China
i Canada
i Japan
i Europe
i Taiwan
i Mexico
i South Korea
i Australia
i Russia
30
HEADQUARTERS:
Kansas City, MO
www.farmlandfoods.com
www.carando.com
PROCESSING FACILITIES
i Crete, NE
Fresh pork, hams, bacon, sausage
i Denison, IA
Fresh pork, hams, bacon
i Monmouth, IL
Fresh pork, hams, bacon
i Wichita, KS
i New Riegel, OH
Smoked sausage, hot dogs, lunchmeat
i Carroll, IA
Bone-in hams, spiral hams
i Salt Lake City, UT
Cook-in-bag products
Case-ready fresh pork
i Springfield, MA
Dry sausage and specialty sausage
FISCAL 2007 HIGHLIGHTS
i Worked with Murphy-Brown to develop a new herd of
vegetarian-fed, antibiotic-free animals for Farmland
Simply Natural brand
i Moved corporate office to a new location with state-of-theart R&D and test kitchen facilities
GI
i Brought new CO2 stunning facility online in Denison, Iowa,
i Launched 15 Farmland Simply Natural and 13 Farmland
improving animal welfare and enhancing pork quality
All Natural products in January 2007
i Received European Union certification to begin exporting
i Secured a contract as the exclusive supplier of pork to
products from Crete, Nebraska, plant
Sodexho, with annual volume estimated at 36 million
pounds
i Exceeded third-year objectives as part of a six-year plan to
utilize all hams and bellies internally
i Opened new distribution center in Crete, Nebraska, in
July 2007
i Continued work on modernizing manufacturing facilities
across the company
31
OUR FAMILY OF COMPANIES
www.CooksHam.com
HEADQUARTERS:
Lincoln, NE
HEADQUARTERS:
Arnold, PA
GENERAL MANAGER:
Mark Meiners
PRESIDENT:
Robert G. Hofmann, II
EMPLOYEES: 1,300
EMPLOYEES: 325
The acquisition of Cook’s Hams, Inc., in 2006 brought
North Side Foods has been making great-tasting meats for
another producer of high-quality packaged meats under the
nearly a century. Today, the company’s plants in Arnold,
Smithfield umbrella. Cook’s offers traditional and spiral
Pennsylvania, and Cumming, Georgia, specialize in
sliced bone-in hams, other smoked meats, and corned beef
precooked pork and turkey sausage patties, links, and
primarily for supermarket chains and independent grocers.
crumbles for the foodservice industry. The first provider of
The company operates plants in Lincoln, Nebraska; Martin
fully cooked sausage to McDonald’s Corporation, North Side
City, Missouri; and Grayson, Kentucky.
Foods remains one of its major suppliers.
MAJOR BRANDS
MAJOR BRANDS
i Cook’s
i Ember Farms
MAJOR MARKETS
MAR
MAJOR MARKETS
i United States
i Canada
i Mexico
i Eastern U.S.
i Midwest/Western U.S.
i Canada
FISCAL 2007 HIGHLIGHTS
FISCAL 2007 HIGHLIGHTS
i Launched exact-weight boneless ham items and
i Completed plant expansion in Georgia, increasing the
quartered spiral-sliced ham
i Increased market share of value-added ham products
by broadening retail customer base
32
www.emberfarms.com
company’s production capacity by 33 percent
i Broadened market reach into Canada with the addition
of a major quick-serve account
www.stefanofoods.com
HEADQUARTERS:
Charlotte, NC
www.rmhfoods.com
HEADQUARTERS:
Morton, IL
PRESIDENT:
Enrico Piraino
PRESIDENT:
Jonathan Rocke
EMPLOYEES: 95
EMPLOYEES: 120
From its roots as an Italian delicatessen and pizzeria,
Smithfield/RMH Foods Group produces more than 150
Stefano Foods today produces ready-to-eat and ready-to-cook
varieties of fully cooked beef, pork, and chicken entrees at
entrees, appetizers, and snacks at its two plants in
its two plants in Morton, Illinois. The company provides
Charlotte, North Carolina. The company’s pizzas, calzones,
branded and private-label offerings for retail customers and
panini, and other convenience items are a popular choice
also serves the deli and foodservice channels. With roots
in the deli section of grocery stores. Its products are also
dating back to 1937, RMH has long specialized in high-
sold through foodservice and fundraising channels.
quality, value-added meat products.
MAJOR BRANDS
MAJOR BRANDS
i Stefano’s
i Rip-n-Dip
i Party Dipper
MAJOR MARKETS
MAR
i United States
i Smithfield
i Quick-N-Easy
i Flavoré
MAJOR MARKETS
i Canada
i Mexico
i United States
FISCAL 2007 HIGHLIGHTS
FISCAL 2007 HIGHLIGHTS
i Increased sales by more than 45 percent, with
i Enjoyed 17-percent sales growth driven in part by the
retail and fundraising providing the greatest gains
i Tripled grilled panini sales, mostly through the
retail channel
Quick-N-Easy brand’s expansion into club stores
i Launched a three-item heat-and-serve appetizer tray
under the Smithfield and Quick-N-Easy brands
33
OUR FAMILY OF COMPANIES
www.patrickcudahy.com
www.814americas.com
Founded in 1888 in Milwaukee, Wisconsin, Patrick Cudahy specializes in high-quality, branded
packaged meats for the foodservice, deli, and retail channels. Primary lines of business include
precooked and traditional bacon, dry sausage, ham, and sliced meats. Patrick Cudahy is among
the top three U.S. producers of precooked bacon. The company has long been identified with
Sweet Apple-Wood Smoke Flavor®, one of its most popular bacon varieties. In 2005, Patrick
HEADQUARTERS:
Cudahy, WI
PRESIDENT:
William G. Otis
EMPLOYEES: 2,300
Cudahy purchased 814 Americas as part of its expansion into the fast-growing Hispanic market.
MAJOR BRANDS
i Patrick Cudahy
i Realean
i Higüeral
i El Miño
i La Abuelita
i Riojano
i Pavone
i Canada
i Caribbean
i Japan
MAJOR MARKETS
i United States
i Mexico
P
PROCESSING
FACILITIES
i Cudahy, WI
i Sioux Center, IA
i Elizabeth, NJ
FISCAL 2007 HIGHLIGHTS
i Enjoyed 10-percent volume growth for premium dry
sausage and specialty Italian deli products
i Increased volume and revenue by 15 percent in the
i Expanded capacity for precooked bacon in Sioux Center,
Iowa, to support rapid category growth
i Focused on improving productivity across all operations to
Hispanic foods segment; expanded distribution and product
keep core Patrick Cudahy business competitive; improved
introductions drove strong performance across all brands at
line efficiencies by 20 percent
814 Americas
34
S
HEADQUARTERS:
Buffalo Grove, IL
www.smithfieldinnovationgroup.com
SENIOR VP & COO:
Michael Formichella CMC
www.thepeanutshop.com
www.smithfieldhams.com
www.smithfieldcollection.com
EMPLOYEES: 5
HEADQUARTERS:
Toano, VA
VP & GENERAL MANAGER:
Wm. W. “Pete” Booker, III
EMPLOYEES: 30
Founded in 2003, the Smithfield Innovation Group is a
The Smithfield Specialty Foods Group is the gourmet products
culinary think tank that develops new food product ideas
division of Smithfield Foods. Home of The Peanut Shop of
for the Smithfield Foods family of companies. Chef Michael
Williamsburg and Genuine Smithfield Ham, it sells dozens
Formichella and his team capitalize on emerging trends
of high-quality nuts, meats, desserts, and dressings. These
in foodservice, retail, and deli. As a result, they create
products are popular choices for gifts and incentives, and they
solutions that set Smithfield companies apart from the
are available through the company’s catalogs, Web sites, and
competition and address unique customer needs.
four retail locations in Virginia, Georgia, and South Carolina.
KEY CAPABILITIES
MAJOR BRANDS
i Developing original, cost-effective menu solutions
i The Peanut Shop of Williamsburg
i Paula Deen Collection
i Providing culinary expertise specific to each customer’s needs
i Genuine Smithfield Ham
i Basse’s Choice
i Assessing the operational needs of foodservice operators as they
MAJOR MARKETS
relate to time, space, and labor
i United States
FISCAL 2007 HIGHLIGHTS
FISCAL 2007 HIGHLIGHTS
i Created marinated meats and 40-ounce dinner kits for
i Posted double-digit sales growth, in part through
club stores as well as rubbed loins for grocery stores
i Developed 10 Paula Deen sauces for QVC and specialty
stores and stuffed beef filets for a large retailer
broader catalog distribution and strategic partnerships
i Introduced Paula Deen Collection Sauces & Seasonings
through The Peanut Shop of Williamsburg
35
OUR FAMILY OF COMPANIES
The fifth-largest beef processor in the United States, the Smithfield Beef Group specializes in highquality USDA Prime and Choice beef. It processes more than 2 million head of cattle each year for
annual sales exceeding $2.5 billion. Smithfield Beef Group provides fresh beef in sub-primal and
case-ready packaging for both the retail and foodservice industries. Specialty brands include
Cedar River Farms Natural, which comes from cattle raised without the use of growth-promoting
HEADQUARTERS:
Green Bay, WI
PRESIDENT:
Richard V. Vesta
EMPLOYEES: 5,600
hormones. In addition to a strong domestic base of customers, Smithfield Beef Group exports to
more than 20 countries. The Smithfield Beef Group was created following Smithfield Foods’ 2001
acquisitions of Packerland Holdings and Moyer Packing Company.
SUBSIDIARIES
i Packerland Packing Company, Inc.
i Sun Land Beef Company
i Packerland Transport, Inc.
i Packerland–Plainwell, Inc.
i Moyer Packing Company
i Cattle Production Systems, Inc.
i Smithfield
i Aberdeen Farms Black Angus
i Packerland
i Cedar River Farms Natural
i Showcase Foods
MAJOR BRANDS
MAJOR MARKETS
i United States
i Japan
36
i Mexico
i Canada
www.sfbeef.com
PROCESSING FACILITIES
i Green Bay, WI
Sub-primal cuts, ground beef chubs
i Plainwell, MI
i Souderton, PA
Sub-primal cuts, ground beef chubs,
Sub-primal cuts, ground beef chubs,
case-ready ground beef
case-ready ground beef, patties
i Tolleson, AZ
Sub-primal cuts
FISCAL 2007 HIGHLIGHTS
S
i Increased volumes by 11 percent on a year-over-year basis
i Returned beef processing to profitability in spite of
due to growth in foodservice and retail customer base
i Re-entered Japanese and Korean markets successfully
following end of ban on U.S. beef
i Launched the Aberdeen Farms Black Angus brand
successfully
i Expanded high energy fed Holstein capabilities through
additional strategic alliances with calf feeders
challenging industry conditions
i Repositioned all processing facilities under the Smithfield
Beef Group banner
i Increased efficiencies at the Tolleson, Arizona, facility
through major reconfiguration of the harvest area
i Established a strategic alliance to be the exclusive
producer of Premium Gold Angus Beef
37
OUR FAMILY OF COMPANIES
www.fiveriverscattle.com
HEADQUARTERS:
Loveland, CO
Formed in 2005, Five Rivers Ranch Cattle Feeding LLC is an independently operated joint
venture between the cattle feeding businesses of ContiGroup Companies, Inc., and Smithfield
Foods, Inc. Five Rivers, the world’s largest cattle feeder, has a combined feeding capacity of
PRESIDENT & CEO:
Mike Thoren
more than 800,000 head of cattle. It has 10 locations in Colorado, Idaho, Kansas, Oklahoma,
and Texas. From one-load and hobby cattle feeders to large-scale beef processors, Five Rivers
EMPLOYEES: 575
provides exceptional service to a variety of cattle-feeding customers.
COLORADO
i Colorado Beef
i Gilcrest Feedlot
i Kuner Feedlot
i Hartley Feeders
i XIT Feeders
i Yuma Feedlot
IDAHO
i Interstate Feedlot
KANSAS
i Grant County Feeders
OKLAHOMA
i Cimarron Feeders
TEXAS DS
i Coronado Feeders
FISCAL 2007 HIGHLIGHTS
i Instituted an aggressive management recruitment and
development program
i Dedicated substantial capital to ensuring sustainable
environmental compliance at multiple locations
38
i Completed several significant capital improvements focused
on improving energy and milling efficiencies
i Provided existing and new customers with cattle for valueadded and branded beef programs
www.murphybrownllc.com
Murphy-Brown, LLC, is the world’s largest hog producer and a key part of Smithfield Foods’
vertical integration strategy. The company was established in 2001 following the acquisitions
of Brown’s of Carolina, Carroll’s Foods, Murphy Family Farms, and Circle Four Farms. MurphyBrown owns approximately 1 million sows, with 85 percent based in the United States. Its U.S.
operations bring nearly 13 million hogs to market annually. Murphy-Brown International
HEADQUARTERS:
Warsaw, NC
PRESIDENT:
Jerry Godwin
EMPLOYEES: 5,700
produces more than 2 million additional hogs each year. The company’s Smithfield Premium
Genetics subsidiary is charged with improving swine genetics throughout the organization.
MURPHY-BROWN EAST
250 company-owned farms and approximately 1,200 contract producer farms
i North Carolina
i Pennsylvania
MURPHY-BROWN WEST
50 company-owned farms and approximately 500 contract producer farms
iCiColoradoIllinois i
i Iowa
Missouri
i Oklahoma
South Dakota
i Texas
Utah
i Missouri
Oklahoma
i South
Texas Dakota
i Utah
Illinois
i Illinois
Iowa
i South Carolina
i Virginia
MURPHY-BROWN
MAJOR BRANDS INTERNATIONAL
i Mexico: Norson
i Poland: Agri Plus
i Mexico: Granjas Carroll de Mexico (GCM)
i Romania: Smithfield Ferme
FISCAL 2007 HIGHLIGHTS
i Expanded farming operations in Mexico and began
increasing Circle Four Farms sow herd in Utah
i Continued dramatic growth in Europe, expanding farms
i Established team to manage transition of sows from
individual gestation crates to group housing
i Partnered with North Carolina energy provider to promote
in Poland and Romania by 16,000 and 24,000 sows,
legislation that would offer incentives to hog farms that
respectively
produce electricity from renewable sources
i Completed construction of a feed mill in Romania and
began construction of a second
i Completed implementation of Animal Welfare Management
System at Murphy-Brown West
39
Butterball, LLC, is the largest U.S. turkey producer, with annual sales exceeding $1.2 billion.
Smithfield Foods owns 49 percent of the company, a joint venture with Maxwell Farms, Inc.,
of Goldsboro, North Carolina. Formerly Carolina Turkeys, the company adopted the Butterball
name in acquiring the brand in October 2006. The celebrated Butterball name is the most widely
recognized brand in the turkey industry and carries more than a half-century of brand equity.
HEADQUARTERS:
Mount Olive, NC
CEO:
Keith Shoemaker
EMPLOYEES: 5,700
Primary lines of business include whole turkeys and parts, cooked turkey breasts, turkey
sausages, ground turkey, lunchmeat and fresh tray pack, bone-in and boneless turkey. Available
through retail, deli, and foodservice channels, Butterball products are sold in 20 countries.
MAJOR BRANDS
i Butterball
i Carolina Turkey
MAJOR MARKETS
40
i United States
i Costa Rica
i The Bahamas
i Mexico
i Panama
i Dominican Republic
i China
i Guatemala
i Russia
i Bermuda
i Puerto Rico
www.butterball.com
PROCESSING FACILITIES
i Mount Olive, NC
Cooked deli breasts, pre-packaged fresh tray
i Carthage, MO
i Longmont, CO
Pre-packaged fresh tray pack turkey, raw bulk turkey
Pre-packaged sliced turkey, cooked deli
pack turkey, ready-to-eat frozen breasts,
turkey medallions, pre-packaged frozen
turkey breasts, raw turkey breasts
breasts, raw meats, hot dogs
i Jonesboro, AR
i Huntsville, AR
Cooked deli breasts
Pre-packaged fresh, frozen, and cooked
i Kinston, NC
Sliced turkey products (bulk and pre-packaged)
i Ozark, AR
whole turkeys, pre-packaged bone-in tray
Pre-packaged fresh and frozen whole turkeys
pack turkey products
FISCAL 2007 HIGHLIGHTS
S
i Increased sales of Butterball pre-packaged whole turkeys
i Broadened foodservice national account distribution with
by 5 percent
i Widened market-leading Butterball brand share while
category sales declined 3 percent
i Introduced All Natural line of cooked deli breasts
addition of several national restaurant chains
i Began selling turkey medallions to a major food
manufacturer for a new line of consumer branded products
i Realized double-digit international value-added sales by
introducing branded items into five new markets
i Expanded distribution of Butterball lunchmeats with
introduction of chicken varieties
i Enhanced U.S. deli distribution with addition of several
major grocery retailers
41
OUR FAMILY OF COMPANIES
HEADQUARTERS:
Paris, France
Groupe Smithfield is the home of Aoste, Jean Caby, Stegeman, Nobre, and many
of Western Europe’s other most popular branded packaged meats. Its annual sales total
$1.9 billion. Smithfield Foods owns 50 percent of this joint venture with Oaktree Capital
Management, LLC. The company was formed in 2006 through the combination of Smithfield’s
Groupe Jean Caby subsidiary and the former Sara Lee European Meats business. Primary
PRESIDENT:
Robert A. Sharpe II
EMPLOYEES: 6,650
product lines include dry sausage, dry ham, cooked ham, cooked sausage, poultry, pâté, hot
dogs, and ready-to-eat meals. Groupe Smithfield serves Europe’s modern and traditional retail
trade as well as a large and growing number of foodservice customers.
SUBSIDIARIES
i Nobre
i Groupe Aoste
i Imperial
i Stegeman
i Aoste SB Germany
MAJOR BRANDS
i Aoste
i Stegeman
i Cochonou
i Marcassou
i Justin Bridou
i Nobre
i Jean Caby
MAJOR MARKETS
42
i France
i Luxembourg
i Belgium
i Portugal
i The Netherlands
i Germany
i U.K.
www.aoste.de
www.imperial.be
www.nobre.pt
PROCESSING FACILITIES
i Portugal
Cooked ham, dry ham, sausage, salami,
i Belgium
Cooked ham, dry ham
ready meals
i France
i The Netherlands
Cooked ham, dry ham
Dry ham, dry sausage, cooked ham,
cocktail sausage
FISCAL 2007 HIGHLIGHTS
S
i Finished the year significantly ahead of plan, leading to
i Launched initiative to reposition Jean Caby and Aoste
increased sales targets for fiscal 2008
i Reaped operational efficiencies through the merger of
Jean Caby and Aoste in France
i Struck an agreement with McDonald’s for the production
of a salad
i Agreed with Weight Watchers to increase product range
products for the high end of the private-label market
i Developed plan to improve margins by optimizing the
manufacturing platform for the French companies
i Increased budget for marketing and advertising by
35 percent to revamp brands and develop new products
i Began producing sandwiches for a top-quality bakery chain
of new low-fat and low-salt varieties from 12 to 20
43
OUR FAMILY OF COMPANIES
www.animex.pl
Animex is Poland’s largest producer of fresh and packaged meats and home of the prized
Krakus ham. With annual sales of approximately $775 million, its primary lines of business
include fresh pork, beef, and poultry as well as smoked and cooked hams, sausages, hot dogs,
bacon, canned meats, and pâtés. Animex products are available in more than 50 countries at
retail and through foodservice channels. Smithfield Foods acquired a controlling stake in the
HEADQUARTERS:
Warsaw, Poland
PRESIDENT:
Darek Nowakowski
EMPLOYEES: 8,750
company in 1999.
MAJOR BRANDS
i Krakus
i Morliny
i Mazury
i Poland
i European Union
i Japan
i United States
i South Korea
i Yano
MAJOR MARKETS
PROCESSING FACILITIES
i Szczecin
i Morliny
i Opole
i Ilawa
i Zamosc
i Elk
i Starachowice
i Debica
i Suwalki
i Grodkow
i Krakow
FISCAL 2007 HIGHLIGHTS
i Introduced the Yano brand in Poland with cooked hams,
i Began selling fresh pork to the Japanese market
sausages, hot dogs, and other value-priced products
i Enjoyed 45-percent U.K. volume growth, mainly through
i Increased export volumes by 30 percent, largely due
to increased sales in the European Union and Far East
44
new line of convenience poultry products and introduction
of packaged meats in Tesco stores
www.smithfieldfoods.ro
Smithfield Foods entered the Romanian meat products market in 2004 by acquiring Agrotorvis.
Smithfield PROD’s annual sales have since grown to more than $60 million. Romania’s European
Union accession in 2007 positions the company to play a key role in Smithfield’s expansion
strategy on the continent. Its primary product line is fresh pork, principally for retail customers.
Smithfield PROD also owns a 50-percent stake in food distributor Agroalim and cold storage
HEADQUARTERS:
Timisoara, Romania
PRESIDENT & CEO:
Morten Jensen
EMPLOYEES: 430
warehouse company Frigorifer.
MAJOR BRANDS
i Comtim
MAJOR MARKETS
i Romania
PROCESSING FACILITIES
i Timisoara
i Tulcea
FISCAL 2007 HIGHLIGHTS
S
i Opened refurbished pork processing plant in Timisoara
i Built state-of-the-art rendering and wastewater treatment
facilities for Timisoara plant
i Doubled sales of fresh pork due largely to expansion of
Smithfield Ferme hog production operations
i Invested in Frigorifer vegetable packing plant, funded in
part by the European Union
i Began distribution of fresh pork cuts to retail trade
i Invested in Frigorifer warehouse expansion
F
45
FINANCIAL SUMMARY
Fiscal Years (dollars and shares in millions, except per share data)
2007
2006
2005
$ 11,911.1
$ 11,403.6
$ 11,248.4
OPERATIONS
Sales
1,134.8
1,092.3
1,212.3
Selling, general, and administrative expenses
745.6
673.8
643.6
Interest expense
175.4
148.6
132.2
188.4
185.2
300.7
166.8
172.7
296.2
$ 1.68
$ 1.65
$ 2.68
Gross profit
Income from continuing operations
Net income
(1)
(1)
PER DILUTED SHARE
Income from continuing operations (1)
(1)
1.49
1.54
2.64
Book value
20.03
18.11
16.93
Weighted average shares outstanding
111.9
112.0
112.3
$ 1,372.5
$ 1,161.3
$ 1,421.2
6,968.6
6,177.3
5,773.6
3,092.9
2,558.3
2,274.7
2,240.8
2,028.2
1,901.4
2.01
1.88
2.30
58.0%
55.8%
54.5%
$ 477.7
$ 381.6
$ 193.2
Depreciation expense
219.3
200.1
187.0
Common shareholders of record
1,128
1,196
1,269
53,100
52,500
51,290
Net income
FINANCIAL POSITION
Working capital
Total assets
Total debt
(2)
Shareholders’ equity
FINANCIAL RATIOS
Current ratio
Total debt to total capitalization
(3)
OTHER INFORMATION
Capital expenditures, net of proceeds
Number of employees
(1) Fiscal 2001 income from continuing operations and net income include a gain of $45.2 million, or $.41 per diluted share,
from the sale of IBP, inc. common stock, net of related expenses.
(2) Total debt is equal to notes payable and long-term debt and capital lease obligations including current portion.
(3) Computed using total debt divided by total debt and shareholders’ equity.
46
2004
2003
2002
2001
2000
1999
1998
$ 9,178.2
$ 7,075.3
$ 6,554.4
$ 5,123.7
$ 4,511.0
$ 3,550.0
$ 3,867.4
933.6
603.9
873.4
762.3
529.3
448.6
347.9
559.4
487.9
491.5
416.2
353.7
280.4
222.4
118.5
85.5
87.1
81.5
67.5
38.4
31.9
167.9
14.8
193.0
214.3
68.0
89.6
53.4
227.1
26.3
196.9
223.5
75.1
94.9
53.4
$ 1.50
$ .14
$ 1.75
$ 1.95
$ .69
$ 1.09
$ .67
2.03
.24
1.78
2.03
.76
1.16
.67
14.31
11.83
12.41
10.05
8.21
6.47
4.83
111.7
109.8
110.4
110.1
98.8
81.9
79.5
$ 1,059.9
$ 939.9
$ 917.1
$ 635.4
$ 609.9
$ 215.9
$ 259.2
4,828.1
4,244.4
3,907.1
3,250.9
3,129.6
1,771.6
1,083.6
1,787.0
1,642.3
1,391.7
1,188.7
1,219.8
610.3
415.8
1,598.9
1,299.2
1,362.8
1,053.1
902.9
542.2
361.0
2.05
1.90
2.06
2.01
1.98
1.46
2.03
52.8%
55.8%
50.5%
53.0%
57.5%
53.0%
53.5%
$ 133.5
$ 166.0
$ 136.5
$ 108.0
$ 87.1
$ 91.2
$ 91.7
165.2
148.3
124.9
114.5
101.0
59.3
42.3
1,332
1,195
1,390
1,345
1,514
1,230
1,143
46,400
44,100
41,000
34,000
36,500
33,000
19,700
47
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
Fiscal Years (in millions, except per share data)
Sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Interest expense
Equity in income of affiliates
Income from continuing operations before income taxes
Income taxes
Income from continuing operations
Loss from discontinued operations
Net income
Income from continuing operations per diluted common share
Net income per diluted common share
2007
2006
2005
$ 11,911.1
10,776.3
$ 11,403.6
10,311.3
$ 11,248.4
10,036.1
1,134.8
1,092.3
1,212.3
745.6
175.4
(38.9)
673.8
148.6
(9.2)
643.6
132.2
(17.5)
252.7
279.1
454.0
64.3
93.9
153.3
188.4
185.2
300.7
(21.6)
(12.5)
(4.5)
$ 166.8
$ 172.7
$ 296.2
$ 1.68
$ 1.49
$ 1.65
$ 1.54
$ 2.68
$ 2.64
CONSOLIDATED CONDENSED BALANCE SHEETS
Fiscal Years Ended (in millions)
April 29, 2007
April 30, 2006
$ 57.8
689.1
1,805.8
181.0
$ 89.4
650.0
1,584.2
151.7
2,733.7
2,475.3
2,345.1
997.8
892.0
2,040.9
936.9
724.2
$ 6,968.6
$ 6,177.3
$ 15.2
239.1
524.0
582.9
$ 43.1
215.7
516.2
539.0
1,361.2
1,314.0
2,838.6
514.1
2,299.5
517.3
4,713.9
4,130.8
13.9
18.3
ASSETS
Cash and cash equivalents
Accounts receivable
Inventories
Prepaid expenses and other current assets
Total current assets
Property, plant and equipment, net
Goodwill and other intangible assets
Investments and other assets
Total assets
LIABILITIES AND SHAREHOLDERS’ EQUITY
Notes payable
Current portions of long-term debt and capital lease obligations
Accounts payable
Accrued expenses and other current liabilities
Total current liabilities
Long-term debt and capital lease obligations
Deferred income taxes and other long-term liabilities
Total liabilities
Minority interests
Total shareholders’ equity
Total liabilities and shareholders’ equity
48
2,240.8
2,028.2
$ 6,968.6
$ 6,177.3
MANAGEMENT
MANAGEMENT BOARD
C. LARRY POPE
President and
Chief Executive Officer,
Smithfield Foods, Inc.
CAREY J. DUBOIS
Vice President and
Chief Financial Officer,
Smithfield Foods, Inc.
JOSEPH W. LUTER, IV
President,
The Smithfield Packing Company,
Incorporated
RICHARD J.M. POULSON
Executive Vice President,
Smithfield Foods, Inc.
JERRY H. GODWIN
President,
Murphy-Brown, LLC
DAREK NOWAKOWSKI
President,
Animex Sp. z o.o.
ROBERT W. MANLY, IV
Executive Vice President,
Smithfield Foods, Inc.
ROBERT G. HOFMANN, II
President,
North Side Foods Corp.
WILLIAM G. OTIS
President,
Patrick Cudahy Incorporated
MORTEN JENSEN
Chief Executive Officer,
Central and Eastern Europe
ENRICO PIRAINO
President,
Stefano Foods, Inc.
C. LARRY POPE
President and
Chief Executive Officer
MICHAEL H. COLE
Vice President,
Chief Legal Officer, and Secretary
JERRY HOSTETTER
Vice President,
Investor Relations and Corporate
Communications
RICHARD J.M. POULSON
Executive Vice President
JEFFREY A. DEEL
Vice President and
Corporate Controller
GEORGE H. RICHTER
President,
Farmland Foods, Inc.
JOSEPH B. SEBRING
President,
John Morrell & Co.
RICHARD V. VESTA
President,
Smithfield Beef Group
CORPORATE OFFICERS
ROBERT W. MANLY, IV
Executive Vice President
DOUGLAS P. ANDERSON
Vice President,
Rendering
CAREY J. DUBOIS
Vice President and
Chief Financial Officer
BART ELLIS
Vice President,
Operations Analysis
JEFFREY M. LUCKMAN
Vice President,
Livestock Procurement
HENRY L. MORRIS
Vice President,
Operations
JAMES D. SCHLOSS
Vice President,
Sales and Marketing
MICHAEL D. FLEMMING
Vice President and Senior Counsel
KENNETH M. SULLIVAN
Vice President and
Chief Accounting Officer
DHAMU THAMODARAN
Vice President,
Price-Risk Management
DENNIS H. TREACY
Vice President, Environmental
and Corporate Affairs
VERNON T. TURNER
Corporate Tax Director
MANSOUR ZADEH
Chief Information Officer
DIRECTORS
JOSEPH W. LUTER, III
Chairman of the Board
C. LARRY POPE
President and
Chief Executive Officer,
Smithfield Foods, Inc.
ROBERT L. BURRUS, JR.
Former Chairman and Partner in
the law firm of McGuireWoods LLP
CAROL T. CRAWFORD, ESQ.
Former Commissioner,
U.S. International Trade
Commission
PAUL J. FRIBOURG
Chairman, President, and
Chief Executive Officer,
ContiGroup Companies, Inc.
RAY A. GOLDBERG
Moffett Professor of
Agriculture and Business
Emeritus at Harvard
Business School
WENDELL H. MURPHY
Private Investor,
former Chairman of the Board
and Chief Executive Officer of
Murphy Farms, Inc.
FRANK S. ROYAL, M.D.
Physician
MELVIN O. WRIGHT
Formerly a senior executive
of Dean Witter Reynolds,
now Morgan Stanley
MICHAEL J. ZIMMERMAN*
Executive Vice President and
Chief Financial Officer,
ContiGroup Companies, Inc.
JOHN T. SCHWIETERS
Vice Chairman, Perseus LLC,
a merchant bank and private
equity fund management company
*Advisory Director
49
CORPORATE INFORMATION
COMMON STOCK DATA
The common stock of the company has traded on the New York Stock Exchange under the symbol SFD since September 28, 1999.
Prior to that, the common stock traded on the Nasdaq National Market under the symbol SFDS. The following table shows the
high and low sales prices of the common stock of the company for each quarter of fiscal 2007 and 2006.
First
Second
Third
Fourth
2007 HIGH
LOW
2006 HIGH
LOW
$ 29.63
30.51
27.26
31.50
$ 25.90
25.67
24.40
25.27
$ 31.12
31.34
31.47
29.63
$ 25.69
25.90
26.95
25.00
HOLDERS
As of May 31, 2007, there were 1,114 record holders of the common stock.
DIVIDENDS
The company has never paid a cash dividend on its common stock and has no current plan to pay cash dividends. In addition,
the terms of certain of the company’s debt agreements prohibit the payment of any cash dividends on the common stock. The
payment of cash dividends, if any, would be made only from assets legally available for that purpose and would depend on the
company’s financial condition, results of operations, current and anticipated capital requirements, restrictions under thenexisting debt instruments, and other factors then deemed relevant by the board of directors.
CORPORATE HEADQUARTERS
Smithfield Foods, Inc.
200 Commerce Street
Smithfield, VA 23430
757-365-3000
www.smithfieldfoods.com
TRANSFER AGENT AND REGISTER
Computershare Investor Services LLC
2 North LaSalle Street
Chicago, IL 60602
312-360-5302
INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
Ernst & Young LLP
One James Center, Suite 1000
901 East Cary Street
Richmond, VA 23219
FORM 10-K REPORT
Copies of the company’s 10-K Annual Report are
available without charge upon written request to:
Corporate Secretary
Smithfield Foods, Inc.
200 Commerce Street
Smithfield, VA 23430
757-365-3000
ir@smithfieldfoods.com
50
ANNUAL MEETING
The annual meeting of shareholders will be held on
August 29, 2007, at 2 p.m., at Williamsburg Lodge,
310 South England Street, Williamsburg, VA 23185.
INVESTOR RELATIONS
Smithfield Foods, Inc.
499 Park Avenue, Suite 600
New York, NY 10022
212-758-2100
ir@smithfieldfoods.com
CEO AND CFO CERTIFICATIONS
The company’s chief executive officer and chief financial officer
have filed with the SEC the certifications required by Section 302
of the Sarbanes-Oxley Act of 2002 regarding the quality of the
company’s public disclosure. These certifications are included as
exhibits to the company’s Form 10-K Annual Report for fiscal 2007.
In addition, the company’s chief executive officer annually certifies
to the NYSE that he is not aware of any violation by the company
of the NYSE’s corporate governance listing standards. This
certification was submitted, without qualification, as required
after the 2006 annual meeting of shareholders.
The company makes available free of charge through its Web site
(www.smithfieldfoods.com) its annual report on Form 10-K,
quarterly reports on Form 10-Q, current reports on form 8-K,
and any amendments to those reports as soon as reasonably
practicable after filing or furnishing the material to the SEC.
Design and Writing: RKC! (Robinson Kurtin Communications! Inc)
Executive & Feature Photography: Burk Uzzle • Printing: The Hennegan Company
This report is printed on recycled paper.
SMITHFIELD FOODS, INC.
200 Commerce Street, Smithfield, VA 23430
757.365.3000
www.smithfieldfoods.com