November 20, 2013

Tyson plans to reopen Houston meat processing plant

During Tyson Foods' Q4 2013 earnings conference call, the company's executives provided details about its plans to reopen its Houston lunch meat processing plant in December.

Donnie Smith, president and CEO of Tyson, also addressed plans for some of the company's soon-to-be released products geared toward the breakfast day part and how the company is adjusting to a general trend of demand shifting from foodservice to retail.

The Houston plant was closed this past summer to incorporate what was reportedly a US$15 million renovation to update technology at the sliced meats facility. Jim Lochner, COO of Tyson Foods, says the project is focused on the raw meat production area of the plant and a cooking technology used by a handful of plants in the US supplied by Armor Inox.

Lochner says when the plant was built many years ago, it was considered state of the art, but nowadays, "There is technology that reduces the number of people to handle the logs and prep the area. Now we put our focus on running our diversified mixes and improving overall quality with less potential human error."

Automation inherently reduces the number of hands touching the product and decreases the likelihood for contamination issues, but Lochner points out, "The intention isn't to eliminate that many team members, but to increase the productivity of the plant and add more mix flexibility to a variety of production lines." The variety allows for log production of ham products, chicken and turkey products to traditional lunch meat items. The project, he says and the implementation of the technology was fairly simple, "but it does take time to change out and eliminate the centre of the plant."

Smith also discussed details of what he refers to as a Tyson sub-brand in the handheld breakfast category, a segment Tyson has identified as having significant growth potential. Growing at an annual rate of 20% with sales of approximately US$1 billion, Tyson introduced a raw breakfast sausage product under its Wright Brand Bacon banner about six weeks ago on the strength and familiarity the brand already has established.

Tyson's Day Starts line will be rolled out in early 2014. The Day Starts line is made up of seven items, which include breakfast sandwiches, flatbreads and wrapped omelettes.