Top meat company is a lightning rod

Food & Drug Packaging, July, 2005 by Pan Demetrakakes

Tyson Foods is the biggest meat and poultry company in America. That title, at times, seems like a big, fat target on the company's back.

This year, Tyson has borne the brunt of many of the concerns and criticisms leveled at the meat industry as a whole. These include:

* Mad-cow disease. The second case of bovine spongiform encephalopathy (BSE) in the U.S. was confirmed this summer, a situation that posed a severe detriment to America's ability to export beef. Tyson's shares declined 3% on the news. Company CEO John Tyson told investors in early July that the BSE situation might delay Japan's decision to resume imports of U.S. beef.

* Worker safety. In June, Tyson settled a case with the state of Kentucky stemming from the 1999 deaths of two workers from methane-gas inhalation. The company paid a fine of $184,525, the largest in the state's history.

* Animal rights. Tyson was one of several meat companies targeted in undercover operations by People for the Ethical Treatment of Animals (PETA). A videotape shot by a PETAL operative who gained employment at the Tyson plant in Heflin, Ala., and released in May, purportedly showed chickens being scalded and mutilated while alive. Tyson responded by calling the tape "carefully edited" and blaming the PETA operative for not preventing the alleged abuse.

But whatever criticism Tyson catches, it hasn't seemed to affect the company's revenues. Sales were up 7.7% in 2004, reaching $26.4 billion. The trend continued in the most recent quarter, with sales reaching $6.4 billion, up 3.4% from the same period last year. Beef is the largest single segment of Tyson's business, with sales of $2.8 billion in the most recent quarter, which was about 44% of total sales. Chicken amounted to 32% of the total; pork, 13%; and prepared foods, 11%.

Prepared foods, including fully cooked products, represent an area with high innovation potential for Tyson, in both products and packaging. In recent years, Tyson was among the first to use retort pouches to provide products like cooked, diced chicken breasts that require no refrigeration. Tyson also uses thermoformed trays with flexible lidding for a line of refrigerated entrees. More recently, Tyson changed the packaging of one of its cooked offerings to better showcase the product. Its Heat N'Eat whole cooked chicken, which had been in a printed pouch, was reformatted this year in a black plastic tray with clear, printed film lidding. The new packaging shows off the product as well as the old pouch, while allowing the chicken to stand upright for better shelf presence.