October 5, 2009

Tyson Foods and Food Lion merged last week that revived the new Holly Farms label in an exclusive deal that lifts other brands from fresh poultry cases except one -- homegrown Perdue Farms.

The deal involves Tyson's poultry processing plant on Virginia's Eastern Shore in Temperanceville, which is expected to produce tray packs for the Holly Farms "value-added" brand, said Gary Michelson, a corporate spokesman.

Market demand for the label could eventually increase poultry production and add several hundred jobs, particularly at a primary plant in Wilkesboro, North Carolina, he said.

Food Lion is removing Tyson and the corporate Food Lion fresh poultry from shelves to make way for Holly Farms. Perdue, though, keeps a limited presence at most Food Lion locations, and a stronger presence at 150 mid-Atlantic grocery stores where demand for the poultry label is high.

The Wilkesboro, N.C.-born Holly Farms was acquired by Tyson in 1989, and then retired a decade or more ago. Tyson decided to roll it out again recognizing it was "a well-known brand."

Luis Luna, a Perdue spokesman at the poultry giant's Salisbury headquarters said Food Lion will continue to carry Perdue products.

Perdue's Perfect Portions (individually wrapped breasts), ground chicken and oven-stuffer roasters make up a select line of Perdue products at all Food Lion LLC stores, confirmed Christy Phillips-Brown, a spokeswoman at the Food Lion LLC headquarters in Salisbury, N.C. Food Lion and Bloom stores in Delaware, Maryland, Virginia and Pennsylvania, also stock Perdue boneless chicken breasts, thinly20sliced breasts, whole chickens and tenders, Phillips-Brown said.

The Food Lion executive said "all stores will have Holly Farms fresh chicken, exclusive to our customers; before we had Food Lion-brand chicken." There will be certain Perdue (fresh poultry products) that the stores continue to carry; there is a strong brand loyalty to that brand in that market, she said.

Holly Farms is a premium brand offered "at a great price," and also is at Food Lion LLC associated Bloom and Bottom Dollar locations, Phillips-Brown said.

Swapping a corporate label for a branded name is an example of brand differentiation, and in this case, a strategic move in an economic cycle trending toward value buys, observes Memo Diriker, a business analyst and market trend expert at Salisbury University.