Meat + Poultry - October 2007 - 114

Photo courtesy of Tyson Foods Inc.

Points of
differentiation
Development of 'new' poultry products
presents challenges
By Keith Nunes
meatpoultry@sosland.com

oultry processors are striving
to stand out in a market where
inflationary pressures are on a
steady rise. The challenge facing poultry processors is to improve efficiencies, but also to offer products at a price
point high enough to cover the cost of
inflation. In the past, the question has
been raised regarding what more may
be done to chicken products to make
them unique? They've been smoked,
grilled, sliced, diced, battered, breaded,
flattened, flavored, injected, skewered,
marinated...what else is left?
For Tyson Foods Inc., Springdale,
Ark., one solution was to think less
about what to put in to the chicken and
more about what to take out. In June,
the company announced it was producing all of its Tyson-brand fresh chicken
from birds raised without antibiotics.
Through consumer research, Tyson
Foods found that 91 percent of consumers agree it's important to have fresh
chicken produced and labeled "raised
without antibiotics."
"We are the first major poultry company to offer fresh chicken raised without antibiotics on a large-scale basis and
at an affordable price for mainstream
consumers," said Dave Hogberg, senior vice president of fresh meal solutions for Tyson, at the time of the line's
launch. "Because of the size and scale
of our operations, we're able to convert
our entire branded business and assure
supply to our customers."
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MEAT&POULTRY

October 2007

Although the product is more expensive, Tyson's market research showed
the higher price is well below the additional cost consumers are willing to
pay for such products.
Richard Bond, CEO of Tyson Foods,
told financial analysts attending this
past month's Lehman Brothers BackTo-School Consumer Conference that
the fresh-chicken volume within the
raised-without-antibiotics line is up almost 35 million pounds on an annu-

"Poultry products have
been smoked, grilled,
sliced, diced, battered,
breaded, flattened,
flavored, injected,
skewered, marinated...
what else is left?"
alized basis. "Retailer interest has allowed us to penetrate markets in areas
we had limited distribution," he said.
"Now we're in the process of converting deli rotisserie and marinated, raw
breaded chicken to the raised-withoutantibiotics platform."
In the past few months, the company
has also launched several other products that move its product development
focus beyond a specific specie and into
a specified "need state."
www.MEATPOULTRY.com

During Bank of America Securities'
37th annual investor conference, held
Sept. 19, Scott McNair, Tyson's vice
president of consumer products, outlined how the company was looking
beyond products and into the kitchens
of consumers.
"There are three [need states] we
have identified and they are: homemade
with health, fast and flexible, and ready
now," he said. "Let's take homemade
with health. That would be when you
have a little extra time in your schedule and want to make that real nice
homemade meal.
"We asked, 'what is it you want in
fresh chicken?' Because fresh chicken is
somewhat of a commodity business and
we're constantly looking for ways to value up our business. The consumer told
us, about 90 percent of them said, 'you
know, we would rather have chicken that
was raised without antibiotics than raised
with antibiotics. And by the way, can you
make it affordable for us?'"
The second need state McNair identified is fast and flexible. "This is when
you have maybe 20 minutes to throw
something in the oven," he told the financial analysts. "One of the new initiatives we have on this need state is our
Any'Tizer line. This was fun because this
is where we use our consumer products
side of the business as well as our foodservice side and collaborated.
"Foodservice obviously has great
insights on what is being sold at the

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Meat + Poultry - October 2007

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