Hormel Foods Corporation · NYSE:HRL

Hormel Foods — Investor Day (June 2017)

38 slides from Hormel Foods's investor day presentation, Jun 15, 2017

  1. Slide 1: Glenn Leitch

    Glenn Leitch 16 Years with Hormel Foods Group Vice President; President, Jennie-O Turkey Store Hormel Foods Career History 2011: Group Vice President; President, Jennie-O Turkey Store 2011: General Manager, Jennie-O Turkey Store 2001: Senior Vice President, Commodity & Supply, Jennie-O Turkey Store

  2. Slide 2: Jennie-O Turkey Store: A Long-Term Growth Story

    Jennie-O Turkey Store A Long-Term Growth Story Glenn Leitch Group Vice President, President, Jennie-O Turkey Store

  3. Slide 3: Agenda

    Agenda • A HISTORY OF GROWTH • Positioned To Compete • A Compelling Outlook 3

  4. Slide 4: Consistent Long-Term Growth

    Consistent Long-Term A HISTORY OF GROWTH Growth Volume Net Sales Segment Profit 920 $2,000 $350 1% 5% 10% Millions Million Pounds Millions $1,800 900 10 YR CAGR 10 YR CAGR $300 10 YR CAGR $1,600 880 $1,400 $250 $1,200 860 $200 $1,000 840 $150 $800 820 $600 $100 $400 800 $50 $200 780 $0 $0 2006 2007

  5. Slide 5: Business Dynamics in the First Half of 2017

    Business Dynamics in the A HISTORY OF GROWTH First Half of 2017 Turkey Commodity Markets Competitive Markets Increased Expenses Breast Price/Pound $6.00 $5.00 $4.00 $3.00 Concrete Perimeters $2.00 $1.00 $0.00 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4

  6. Slide 6: Cyclical Dynamics Of The Turkey Industry

    Cyclical Dynamics A HISTORY OF GROWTH Of The Turkey Industry Turkey Lifecycle Jennie-O Turkey Store $350 18.9% 20.0% Tom Turkey 16.9% $329 18.0% 16.3% $300 110 Days 14.0% 15.4% 13.9% $272 $276 16.0% $250 14.0% 12.5% 11.6% $238 Poult 12.0% 411 DAYS 11.0% $222 $200 35 Days 9.2% $205 10.0% $150 Egg 6.2

  7. Slide 7: Overview: Average Net Sales 2014-2016

    Jennie-O Turkey Store A HISTORY OF GROWTH Overview Average Net Sales 2014 - 2016 Commodity Meats ~10% Whole Turkeys ~10% Retail ~30% Deli ~20% Foodservice ~30% Internal Data

  8. Slide 8: Overview: Average Volume 2014-2016

    Jennie-O Turkey Store A HISTORY OF GROWTH Overview Average Volume 2014-2016 Commodity Meats ~15% Retail ~30% Whole Turkeys ~20% Deli Foodservice ~13% ~22% Internal Data

  9. Slide 9: Results Driven By A Positive Mix

    Results Driven By A HISTORY OF GROWTH A Positive Mix Net Sales - % Value-Added Approximately 80% Approximately 75% 2011 2016 Internal Data

  10. Slide 10: Strong Growth in Ground Turkey

    Strong Growth in A HISTORY OF GROWTH Ground Turkey JENNIE-O® Ground Turkey Servings 700 Millions 600 600M servings of 500 JENNIE-O® ground 400 turkey were 300 consumed in 2016 – 200 Triple the number 100 in 2007. - 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Internal Data

  11. Slide 11: Agenda

    Agenda • A History of Growth • UNIQUE INDUSTRY POSITION • A Compelling Outlook

  12. Slide 12: Sustainable Competitive Advantages

    Sustainable UNIQUE INDUSTRY POSITION Competitive Advantages Brand Products Supply Chain Category Awareness Among Millennials 96% • Midwest location Peer 1 92% • Proximity to Peer 2 83% production facilities Peer 3 79% • Location of DCs Peer 4 63% Peer 5 51% 2016 Hormel JOTS Custom Tracking Measureme

  13. Slide 13: Industry Leadership

    Industry UNIQUE INDUSTRY POSITION Leadership Turkey Category Dollar Share 29% 13% 11% 7% Deli 7% ~20% Peer 4 Private Peer 1 Peer 2 Peer 3 Label Peer 5 IRI L52W 4/9/2017

  14. Slide 14: #1 Market Share in Lean Ground Turkey

    #1 Market Share in UNIQUE INDUSTRY POSITION Lean Ground Turkey Lean Ground Turkey Market Share IRI L52W 4/9/2017

  15. Slide 15: Leadership in Numerous Other Categories

    Leadership in UNIQUE INDUSTRY POSITION Numerous Other Categories #1 Market Share #2 or #3 Market Share Fresh Ground Turkey Breakfast Tray 36% Share 69% Share 16% Share 37% Share Fresh Ground Turkey Chub Fresh Ground Turkey Breakfast Chub 75% Share 83% Share 17% Share IRI L52W 4/9/2017

  16. Slide 16: An Industry-Leading Supply Chain

    An Industry-Leading UNIQUE INDUSTRY POSITION Supply Chain Distribution Center Production Facility

  17. Slide 17: Delivering a High-Performing Product

    Delivering a UNIQUE INDUSTRY POSITION High-Performing Product

  18. Slide 18: Supporting the Brand With Effective Advertising

    Supporting the Brand UNIQUE INDUSTRY POSITION With Effective Advertising

  19. Slide 19: Creating Consumer Awareness and Purchase Intent

    Creating Consumer UNIQUE INDUSTRY POSITION Awareness and Purchase Intent Total JENNIE-O® Purchase Intent Advertising Awards Brand Awareness Best Sampling Campaign 2016 62% 2009 57% Credited to ongoing advertising investment, the Jennie-O® brand has grown from 77% to over 96% total awareness. 2015 20

  20. Slide 20: Agenda

    Agenda • A History of Growth • Positioned To Compete • A COMPELLING OUTLOOK

  21. Slide 21: Putting More Turkey On More Plates

    Putting More Turkey A COMPELLING OUTLOOK On More Plates JENNIE-O® Turkey Sausage Chub Volume From Holidays… … to Everyday. 2011 2012 2013 2014 2015 2016 Internal Data

  22. Slide 22: Jennie-O Turkey Skews Toward Millennials

    Jennie-O Turkey ® A COMPELLING OUTLOOK Skews Toward Millennials Household Penetration: Category Awareness Among JENNIE-O® Brand Millennials General Population Gen X Millennials 22% 24% 26% 96% Poultry Peer 1 92% Poultry Peer 2 83% Poultry Peer 3 79% Poultry Peer 4 63% Poultry Peer 5 51% 2016 Hormel

  23. Slide 23: Declining Beef Consumption Creates An Opportunity

    Declining Beef Consumption A COMPELLING OUTLOOK Creates An Opportunity Per-Capita Beef Consumption 100 90 80 70 60 50 40 30 20 10 0 USDA ERS data

  24. Slide 24: Turkey Continues to Take Share From Beef

    Turkey Continues to A COMPELLING OUTLOOK Take Share From Beef Turkey’s Share of Ground Meats 14% 12.3% 12% 11.4% 10.6% 10.2% 9.7% 10% 9.1% 8.5% 8% 6% 4% 2% 0% 2011 2012 2013 2014 2015 2016 2017YTD IRI Total US – Multi Outlet 4/9/2017

  25. Slide 25: Jennie-O Continues to Gain Share of Ground Turkey Category

    Jennie-O Continues to Gain A COMPELLING OUTLOOK Share of Ground Turkey Category Jennie-O’s Share of Ground Turkey Brand Support 45% Made Me More Likely To 40% 38.1% 38.0% 38.1% 39.3% Purchase (% Yes) 37.1% 35.8% 35% 32.6% 2015 ‘Taco Ride’ 30% 25% 69% 20% 15% 2016 ‘Make the Switch’ 10% 5% 0% 76% 2011

  26. Slide 26: Growing our East Coast Distribution

    Growing our A COMPELLING OUTLOOK East Coast Distribution 12% 42% 48% 63% 73% 10% 39% 31% Jennie-O® Ground Turkey Market Share – IRI L52W 4/7/2017

  27. Slide 27: A Continued Focus On Innovation

    A Continued Focus A COMPELLING OUTLOOK On Innovation Snacking Turkey Bacon Expansion All-Natural

  28. Slide 28: High Growth Opportunity With Jennie-O Oven Ready

    High Growth Opportunity With Jennie-O Oven Ready™ ® Net Sales 2013 2014 2015 2016 Internal data

  29. Slide 29: Supporting the Brand With Effective Advertising

    Supporting the Brand UNIQUE INDUSTRY POSITION With Effective Advertising

  30. Slide 30: Retail, Foodservice And Deli Sales Growth

    Retail, Foodservice A COMPELLING OUTLOOK And Deli Sales Growth Value-Added Sales Growth 2011 2012 2013 2014 2015 2016 Internal Data

  31. Slide 31: Expanding Distribution for Premium Deli and Prepared Foods

    Expanding Distribution for A COMPELLING OUTLOOK Premium Deli and Prepared Foods Premium Deli Prepared Foods • Distribution expansion • Expand distribution of boneless and bone-in rotisserie turkey • Innovation through flavor varieties. • Launch slow roasted dark turkey rotisserie • Oven Roasted whol

  32. Slide 32: The Right Foodservice Partners

    The Right A COMPELLING OUTLOOK Foodservice Partners National College and Commercial Non-Commercial K-12 Accts. University

  33. Slide 33: Investments in The Future of Live Production

    Investments in A COMPELLING OUTLOOK The Future of Live Production • Third-party certification through the Agriculture Marketing Service • Production starts this month • Intent is to certify all company production

  34. Slide 34: Investing In Our Future

    Investing In A COMPELLING OUTLOOK Our Future Faribault Plant Melrose Green Field Plant $130 Million Investment in Melrose Internal data Whole Bird Plant

  35. Slide 35: Consistent Growth Through Industry Cycles

    Consistent Growth A COMPELLING OUTLOOK Through Industry Cycles Jennie-O Turkey Store Net Sales $1,800 Millions $1,700 $1,741 $1,672 $1,600 $1,636 $1,602 $1,549 $1,500 $1,467 $1,400 $1,300 $1,310 $1,268 $1,200 $1,228 $1,162 $1,100 $1,105 $1,088 $1,000 $900 $800 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12

  36. Slide 36: Our Goal is to be the Most Profitable Poultry Company

    Our Goal is to be the A COMPELLING OUTLOOK Most Profitable Poultry Company 25.0 20.0 15.0 % Operating Profit 10.0 5.0 0.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 -5.0 -10.0 Jennie-O Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Company Reported Data

  37. Slide 37: Key Takeaways

    A COMPELLING OUTLOOK Key Takeaways • The industry’s best supply chain • A brand that resonates with millennials • A category on the rise with room to grow

  38. Slide 38: Jennie-O Turkey Store: A Long-Term Growth Story

    Jennie-O Turkey Store A Long-Term Growth Story Glenn Leitch Group Vice President, President, Jennie-O Turkey Store

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