Tyson Foods makes aggressive investments in chicken arm to meet demand  

US – Tyson Foods, an American multinational corporation, is executing aggressive strategies to improve efficiency in chicken production in order to meet the soaring demand for its products.

The company noted that it is investing in automation efforts for tasks including chicken deboning and worker retention programs.

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President and CEO Donnie King told the Wall Street Journal fixing supply issues is also a top priority of the company, and added that it has at times purchased chicken from competitors in order to meet demand.

Demand for chicken, which has been on the rise, is further exacerbating existing supply issues in the meat space.

Despite recent difficulties, Tyson has seen a massive jump in sales as it’s passed along costs related to inflation to consumers.

 In its most recent quarter, Tyson’s sales increased 16% as it raised the prices of its products by 23.8% year-over-year.

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In that earnings report, King said the company is not simply “pricing for inflation;” but part of “doing everything possible to become more productive.”

However, Tyson’s poultry segment had profitability issues, a problem it has faced for some time now.

Tyson posted a US$625 million operating loss for its poultry business in the fiscal year 2021, after passing higher costs for labor, feed, and transportation on to consumers.

Market analysts are calling on Tyson to fix its supply chain if it wants to maintain its foothold in the chicken space as it continues to see its chicken demand spike.

Even with the predictions that more consumers will turn to chicken as inflation constrains their spending, Rabobank said in its annual poultry industry report last week that global poultry demand may slow down compared to previous years.

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The financial institution projected demand will only grow between 0.5% and 1% this year, a decrease from a normal year’s growth of 2.5%.

The report partially attributes the slowdown to supply chain issues in the space, which Tyson may have contributed to.

However, slowing demand could also provide an opportunity for Tyson to catch up if the problems at the company don’t get worse.

Meanwhile, Tyson also plans to partner with SideChef to add shoppable QR codes to Walmart’s and Target’s websites, a new feature that many companies are exploring to make it easier for shoppers to buy ingredients for a recipe.

The company is also planning US$1 billion in “productivity savings” by the end of the fiscal year 2024, according to the report by Grocery Dive.

 It’s a series of changes that the company hopes can revive shareholders’ confidence and recoup lost ground.

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