Hormel Foods

Part
01
of four
Part
01

Hormel Retailer Score

Hormel Foods Corp. ranks 37th this year in 3BL Association's 100 Best Corporate Citizens, a drop from last year's 16th rank. The main factors contributing to Hormel's drop in ranking are its climate change, governance, and financial performance.

3BL Association's 100 Best Corporate Citizens

Hormel 3rd Quarter 2019 Results of Operations

  • Hormel's relatively low ranking (by 3BL Association) in terms of financial performance can be supported by the company's latest quarterly report, where Hormel reported a decline in "net earnings per diluted share of $0.37, compared to $0.39 per diluted share in the third quarter of fiscal 2018."
  • In the report, the company cited "higher effective tax rate and weakness in the grocery products segment" as factors contributing to the decline, which "strong results from refrigerated foods were unable to offset."
  • The company's profit in the grocery products segment was "negatively impacted by the divestiture of CytoSport, significantly higher avocado costs, and lower Skippy® peanut butter pricing."
  • Hormel also highlighted the Jennie-O Turkey Store segment's decline in profit, which, as reported, is a result of "lower sales from retail and food-service value-added items."

Research Strategy

To verify whether Hormel's retail scores dropped recently, our initial strategy was a direct search on business information websites. However, business websites like Simply Safe Dividends and Nasdaq don't seem to have a company scoring for its retail performance. Instead, information about financial performance were found using this strategy, specifically, Hormel's dividend growth slowing down.

A direct search for Hormel's retailer score led us to individual product consumer ratings from retailers such as Walmart, Target, and Amazon, far from our target information. So, we shifted gears and scoured market research websites, such as Kantar. Kantar annually publishes PoweRanking, a ranking of retailers and manufacturers based on metrics ranging from strategy to business fundamentals. Unfortunately, only the top 5 retailers and the top 5 manufacturers are shown on the summary, and the full copy of the report can only be accessed through a paywall. Hormel was not among the top 5 in both 2018 and 2017 ranking, but a deep dive of Kantar news archive revealed that in 2014, Hormel, considered a mid-size manufacturer, was ranked 19th among retailers and manufacturers.

Since the information we got falls outside our acceptable timeline, we moved on towards brand valuation websites, such as Brandz. Like Kantar, Brandz annually publishes Top 75 Most Valuable Global Retail Brands, a ranking of retailers based on their financial value and brand contribution. Unfortunately, Hormel was not in both 2019 and 2018 ranking.

Determined to provide, at least, insights into Hormel's retail scores, we searched news articles that may point us to a metric-based scoring of the company. A press release from Hormel's website claims that the company was named one of the 100 Best Corporate Citizens for the 11th consecutive year. Tracing the source, 3BL Association, an organization that annually ranks 1,000 largest US public companies based on environmental, social, and governance transparency and performance, we found valuable information about this year and last year's scores of Hormel Food Corp. Finally, we corroborated the information using the data from Hormel's latest quarterly report.

Part
02
of four
Part
02

Hormel E-Commerce

Hormel Foods has incorporated several e-commerce features on their website. These include, but are not limited to — product grouping, product review and rating, information subscription, promotional and discounting, and personalization. These are further highlighted below.

Personalization Feature

  • Hormel has incorporated an ‘add to favorites’ feature on their website, which allows customers to add or save a list of their favorite products.
  • This feature enables users to gain instant access to a central section of the website where they can review the things they are willingness to buy perhaps after getting their paycheck or generally at a later point in time. This makes total sense from the buyer’s point of view — it’s fast, super easy and convenient.

PROMOTIONAL & DISCOUNTING FEATURE

  • Hormel utilizes coupons as a means to incentivize shoppers into buying their products. The company offers free printable coupons available on Hormel’s website. Buyers can save on their favorite products once they show these coupons at stores selling Hormel products.
  • Research has shown coupons to be a robust e-commerce tool in the online retail business. 91% of coupon redeemers admit that they would revisit retails with coupons.

INFORMATION SUBSCRIPTION FEATURE

  • The information subscription feature available on the Hormel website is another e-commerce tool that the company employs.
  • Email subscribers are continuously updated on new products, new offers, and new store locations near them where they can efficiently and conveniently buy Hormel food products. Additionally, subscribers can also access recipes and be in the know concerning special savings and events Hormel hosts and participates in.

PRODUCT GROUPING FEATURE

  • Hormel Foods has grouped their food products on their site into various categories, brands and menu Ideas.
  • This enables an easy and fast way of locating products by the end-users visiting their site as well as managing the products from the back end side by site administrators.
  • End-users need only have an idea of the general category, brand or menu idea within which their food product of desire falls into and then proceed to narrow down the search by navigating to that category.

PRODUCT REVIEW RATING FEATURE

  • Hormel Foods has incorporated a product review and rating feature on their website for their various food products.
  • This includes a clickable five-star rating feature for each product and a text area for typing your review for a given product. This feature is particularly useful in getting to know how end-users perceive a given product.


Part
03
of four
Part
03

Hormel Acquisitions

Columbus Manufacturing, Ceratti, Fontanini Italian Meats and Sausages, Justin’s, Applegate, CytoSport, and Skippy are the last seven companies acquired by Hormel Foods Corporation.

Columbus Manufacturing

  • Hormel Foods acquired Columbus Manufacturing Inc., a company that sells premium deli meat and salami, to position itself as a total deli solutions provider and to further enhance its other deli brands.
  • Hormel Foods acquired Columbus Manufacturing on October 31, 2017.
  • Hormel Foods acquired Columbus Manufacturing for an amount of $850 million.
  • Here is a link to a relevant article about the acquisition of Columbus Manufacturing by Hormel Foods.
  • As evidenced by its latest annual report, Hormel Foods gave no quantitative measure of the benefit of its acquisition of Columbus Manufacturing.
  • Albeit Hormel Foods gave no quantitative measure of the benefits of its acquisition of Columbus Manufacturing, its net sales in the refrigerated food segment increased due to the demand for its Columbus brand deli items. This enabled it to meet its earnings expectations.

Ceratti

  • Hormel Foods acquired Ceratti, a branded and value-added cold-cuts and meat company, as a way for it to enter the fast-growing Brazilian meats market, and an entry point for it to expand into South America.
  • Hormel Foods acquired Ceratti on August 24, 2017.
  • Ceratti was acquired for $104 million.
  • Here is a link to a relevant article about the acquisition of Ceratti by Hormel Foods.
  • As stated in its 2018 annual report, Hormel Food’s acquisition of Ceratti contributed to the company being able to surpass the previous year’s results in the international segment.

Fontanini Italian Meats and Sausages

  • Hormel Foods acquired Fontanini Italian Meats and Sausages, a branded foodservices company that specializes in authentic Italian meats and sausages and other premium meat products, to expand its foodservice business.
  • Hormel Foods acquired Fontanini Italian Meats and Sausages on August 16, 2017.
  • Hormel Foods acquired Fontanini Italian Meats and Sausages for $425.7 million.
  • Here is a link to a relevant article about the acquisition of Fontanini Italian Meats and Sausages by Hormel Foods.
  • The acquisition of Fontanini helped Hormel Foods to achieve higher volume and net sales in the fourth quarter of 2018.

Justin’s

  • Justin’s, a pioneer in nut butter-based snacks, was acquired by Hormel Foods to strengthen its presence in the specialty natural and organic nut butter snacks market.
  • Hormel Foods acquired Justin’s on May 26, 2016.
  • Hormel Foods acquired Justin’s for $280.9 million.
  • Here is a link to a relevant article about the acquisition of Justin’s by Hormel Foods.
  • Justin’s contributed an incremental sales of $24.3 million to Homer Foods in the last quarter, and $36.8 million in the fiscal year that ended October 30, 2017.

Applegate

  • Hormel Foods acquired Applegate, a major player in the natural and organic value-added prepared meats market, to expand its offerings in the organic and natural products category. Applegate operates autonomously as an independent subsidiary in Hormel Food’s Refrigerated Foods segment.
  • Hormel Foods acquired Applegate on July 13, 2015.
  • Hormel Foods acquired Applegate for $774.1 million.
  • Here is a link to a relevant article about the acquisition of Applegate by Hormel Foods.
  • Applegate contributed an increment of $236.8 million in net sales and 36 million lbs in the fiscal year of 2016.

CytoSport

Skippy

  • Hormel Foods acquired Skippy, a peanut butter-producing company, to strengthen and expand its brand portfolio with a non-meat protein product. Skippy is sold in over 30 countries in five continents.
  • Hormel Foods acquired the US-based Skippy business on January 31, 2013, while the China-based Skippy business was acquired on November 26, 2013.
  • Hormel acquired the US-based Skippy business for $665.4 million, while the China-based business was acquired for $41.9 million.
  • Here is a link to a relevant article about the acquisition of Skippy by Hormel Foods.
  • The acquisition of Skippy contributed an incremental net sales of $28.9 million to Hormel Foods, in the 2104 fiscal year. Also, the US business contributed an incremental net sales of $86.5 million in the first quarter of 2014, and an incremental net sales of $272.8 million in the fiscal year of 2013.
Part
04
of four
Part
04

Hormel Brands (A)

A complete listing and brief description of all Hormel brands, organized product segment (grocery, refrigerated, Jennie-O-Turkey, and international and other) was gathered from the Hormel website. Based on previous research, we were then able to determine which product segment each brand belonged.

Brands

Jennie-O Turkey

  • This is both a brand and segment (Jennie-O Turkey segment). It collects together a variety of cuts, pre-marinated, cured, and spiced turkey meats (e.g., ground turkey, turkey sausage, turkey franks or turkey burgers).

Refrigerated Foods Segment

Hormel Always Tender

  • This brand encompasses pre-seasoned and pre-marinated (uncooked) meats, specifically pork loins and pork roasts and is part of the refrigerated foods segment.

Applegate

  • Organic and natural (no fillers and nothing artificial) meats is gathered under this brand, including bacon, sandwich meats, breaded chicken, burgers, hot dogs, and sausages. Applegate is part of the refrigerated foods segment.

Austin Blues Barbecue

  • This brand includes precooked (i.e., slow smoked over hardwoods) meats in the BBQ tradition, including ribs, pulled chicken, beef brisket, or pulled pork and is part of the refrigerated foods segment.

Bacon 1

  • This brand offers precooked--by a patent-pending cooking technique--bacon to ensure flavor, eye appeal, and texture. This brand is part of the refrigerated foods segment.

Hormel Black Label Bacon Products

  • Under this brand is gathered fresh, hardwood smoked, mostly center-cut slices of bacon. This brand is part of the refrigerated foods segment.

Burke Products

  • This brand includes fully cooked refrigerator-packaged meat toppings--pepperoni, sausage, Canadian bacon or meatballs--that can be added to pizzas or other dishes. It falls under the refrigerated foods segment.

Cure 81 Hams

  • This brand includes smoked and cured hams--both boned and bone in. It also includes ham cubes and ham steaks. This is part of the refrigerated foods segment.

Dan's Prize

  • This brand offers a natural, quality meats in different cuts--for example, sliced deli, pot roast, prime rib, brisket, and corned beef. It is part of the refrigerated foods segment.

Hormel Deli Meats

  • This brand includes meats found in the deli section of the store--roast beef, pastrami, salami, mesquite smoked turkey breast, or smoked honey cured ham. This is part of the refrigerated foods segment.

Don Miguel

  • This brand features refrigerated, prepacked Mexican-inspired foods, such as burritos and breakfast casseroles. It is part of the refrigerated foods segment.

Hormel Fire Braised Meats

  • This brand designates seared and then braised meats (e.g., pork loin, ribs, or boneless chicken thigh). This is part of a refrigerated foods segment.

Fontanini

  • This brand includes fully cooked Italian meats (for pizza and pasta toppings), Mediterranean inspired meats (e.g., gyros), and specialty sausages (e.g., sweet or mild). It is part of the refrigerated foods segment.

Hormel Fuse Burger

  • This brand designates ground meats (turkey or beef) blended with whole grains to make into burgers or sandwiches. It is part of the refrigerated food segment.

Wholly Guacamole

  • This brand includes fresh, packaged (single or multiple use) guacamole. It is part of the refrigerated food segment.

Hormel Gatherings

  • This is a brand of prepacked, arranged party trays and snack packs (crackers, meats, fruits, cheeses). It is part of the refrigerated food segment.

Hormel Health Labs

  • This brand offers a variety of products designed by food scientists to address dietary and health issues, for example, diabetes, cancer treatment and recovery, or digestive health. It is part of the refrigerated foods segment.

Lloyd's Barbecue

  • This brand includes both tubs of bbq'd meats (heat up and serve) and pre-marinated baby back and spare ribs. It is part of the refrigerated foods segment.

Natural Choice Meats

  • This brand designates 100% natural (no artificial ingredients or preservatives) deli meats, snack packs, and bacon. It belongs in the refrigerated foods segment.

Grocery Product Segment

Hormel Side Dishes

  • Hormel Side Dishes are packaged, microwave-ready side dishes to accompany meals (e.g., mashed potatoes or macaroni and cheese). It is part of the

Hormel Mary Kitchen Hash

  • This is a brand of canned hashes--corned beef, roast beef, and sausage. It is part of the grocery product segment.

House of Tsang

  • This brand is a collection of Asian-flavored, bottled sauces (e.g., General Tso or Bangkok Peanut Sauce). It is part of the grocery product segment.

Embasa Peppers

  • This is a brand of chipotle and jalapeno peppers packaged for use in spicing up recipes. It is part of the grocery product segment.

Dona Maria

  • This is a brand of Mexican cuisine sauces--a variety of moles--and Nopalitos (cured cactus). It is part of the grocery product segment.

Herdez Salsas

  • This brand includes a variety of bottled sauces, e.g., guacamole salsa or salsa verde. It is part of the grocery product segment.

Dinty Moore Stew

  • Dinty Moore stews are canned and microwave-cup stews (e.g., chicken and dumpling, beef stew, or scalloped potato and ham). This is part of the grocery product segment.

Del Fuerte

  • This brand consists of packaged (in cartons) tomato sauces with Mexican spices (e.g, chile and chipotle). It is part of the international and other segment.

Stagg Chili

  • This brand designates canned chilis (meat and beans). It is part of the international and other segment.

Hormel Bacon Toppings

  • This brand encompasses precooked and packaged 100% bacon toppings, such as crumbles, pieces, sprinkles and bits. It is part of the grocery product segment.

Justin's

  • This is a brand of sustainably sourced, natural nut butters (cashew, peanut, or almond) and peanut butter cups. This is part of the grocery product segment.

Valley Fresh

  • This brand designates fully-cooked, canned, all natural chicken meat. It is part of the grocery product segment.

Bufalo Products

  • This is a salsa, hot sauce brand made from chilies. It is part of the grocery product segment.

Chi-Chi's Mexican Products

  • This brand includes tortillas, salsa, chips, and spice mixes used in Mexican cuisines. It is part of the grocery product segment.

Hormel Taco Meats

  • This is a brand of packaged, seasoning spices for taco meats. It is part of the grocery product segment.

Herb -Ox Bouillon

  • This brand includes bouillon granules (vegetable, chicken, or beef) to flavor soups and stews. It is part of the grocery product segment.

La Victoria

  • This is a brand of bottled salsas (including organic ones) and taco sauces. It is part of the grocery product segment.

Vital Cuisine

  • This brand includes protein shakes, meals, and whey powders targeted to individuals with dietary restrictions (cancer treatment, diabetes, or malnutrition). It belongs in the grocery product segment.

Premium Chicken Meats

  • This brand offers canned, chicken meat chunks from breast, light, and dark meats. This is part of the grocery product segment.

Hormel Chili

  • Collected under this brand are different canned chilis, including vegetarian, chunky beef, and no beans. This is part of the grocery product segment.

Hormel Compleats

  • This brand collects a variety of microwave ready-to-eat meals, such as beef stew, chicken Alfredo, or macaroni and cheese. It is part of the grocery product segment.

Spam

  • This is a brand of seasoned and canned meats (ham) with a variety of flavors (teriyaki, classic, black pepper, or chorizo). It belongs in the grocery product segment.

Skippy

  • This is a brand of peanut butter products (spreads, natural peanut butter, and peanut butter snacks). It belongs in the grocery product segment.

International and Other Segment

Cafe H Global Proteins

  • Under this brand is offered pre-flavored and spiced meats to add to internationally-inspired dishes, such as Korean Tacos or Pozole and it is part of the International and Other Segment.

Columbus Craft Meats

  • Columbus Craft meats include Italian salamis, deli whole cuts (e.g., carved ham or rotisserie chicken), Italian meats (e.g., prosciutto and capicolla), and charcuterie meats. It is part of the international and other segment.

DiLusso Deli Meats

  • This brand offers a variety of premium deli meats (e.g. cranberry sage turkey breast), deli condiments (e.g., basil aioli), and deli cheeses (e.g., muenster). It is part of the international and other segment.

Research Strategy

The team first identified Hormel brands on their website and also the individual websites (in the cases when those existed) of brands. We drew our description of each brand from these sources. Building on previous research, the team was also able to organize these brands into each segment (refrigerated foods, grocery products, Jennie-O Turkey, and international and other).
Sources
Sources

From Part 03
From Part 04