Hormel Foods Corporation · NYSE:HRL
Hormel Foods — Investor Day (June 2017)
26 slides from Hormel Foods's investor day presentation, Jun 15, 2017
Slide 1: Tom Day, Group Vice President, Refrigerated Foods
Tom Day 36 Years with Hormel Foods Group Vice President, Refrigerated Foods Hormel Foods Career History 2013: Group Vice President, Refrigerated Foods 2010: Group Vice President, Foodservice 2007: Senior Vice President, Foodservice 2000: Vice President, Foodservice Sales 1998: Director of Sales, Foo
Slide 2: The Evolution of Refrigerated Foods
The Evolution of Refrigerated Foods Tom Day Group Vice President Refrigerated Foods
Slide 3: Agenda
Agenda • THE EVOLUTION OF REFRIGERATED FOODS • Growing Our Retail Business
Slide 4: A Diverse Segment
Refrigerated Foods: THE EVOLUTION OF REFRIGERATED FOODS A Diverse Segment HORMEL FOODSERVICE MEAT PRODUCTS ~1/3 ~1/3 ~1/3 Fresh Pork Internal data
Slide 5: Steady Performance Improvement
Steady THE EVOLUTION OF REFRIGERATED FOODS Performance Improvement Refrigerated Foods Net Sales Refrigerated Foods Segment Profit 5,000 4% CAGR 700 Millions Millions 4,500 600 4,000 15% CAGR 3,500 500 3,000 400 2,500 300 2,000 1,500 200 1,000 100 500 - - 2006 2007 2008 2009 2010 2011 2012 2013 2014
Slide 6: Constant Evolution of Refrigerated Foods
Constant Evolution of THE EVOLUTION OF REFRIGERATED FOODS Refrigerated Foods 1991 2004 2005 2006 2010 2013 2014 2015 2017 Refinery & Feeds : Acquisition : Divestiture/Dissolution
Slide 7: A History of Consistent, Positive Mix Shift
A History of Consistent, THE EVOLUTION OF REFRIGERATED FOODS Positive Mix Shift Value-Added Sales Growth Consistently Adding Value to Our Products Refrigerated Foods Approximately 80% Approximately 70% 2012 2016 Internal data – Excludes Farmer John related sales
Slide 8: Growth in Value-Added Translates to Increased Sales & Margins
Growth in Value-Added THE EVOLUTION OF REFRIGERATED FOODS Translates to Increased Sales & Margins Pork Butt Value-Added Ladder Profitability Bone-In Butts Consumer & Operator Value
Slide 9: Increasing Our Value-Added Mix Fuels Margin Expansion
Increasing Our THE EVOLUTION OF REFRIGERATED FOODS Value-Added Mix Fuels Margin Expansion Utilization & Optimization “The Pig Pen” Commodity Sales 46M lbs. Internal data 2011 2016
Slide 10: Moving the Boulder
Moving THE EVOLUTION OF REFRIGERATED FOODS the Boulder Refrigerated Foods Segment Margin 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Internal data
Slide 11: Agenda
Agenda • The Expansion of Refrigerated Foods • GROWING OUR RETAIL BUSINESS
Slide 12: Our Leading Brands
Our GROWING OUR RETAIL BUSINESS Leading Brands #1 Brands #2 or #3 Brands Convenience Bacon Raw Bacon Premium Approximately 57% Share Lunchmeats 38% Share Lunchmeats 80% 9% Share 12% Share Adult 74% Share 31% Share 37% Share* Shredded BBQ Meat Snacking Ribs 9% Share 16% Share 11% Share 21% Share 54%
Slide 13: HORMEL BLACK LABEL Bacon
GROWING OUR RETAIL BUSINESS HORMEL BLACK LABEL Bacon ® ® Premium Bacon Net Sales CAGR +13.1% 2013 2016 IRI, Syndicated POS Data, Total US – Multi Outlet, 52W Ending 4/9/2017
Slide 14: HORMEL Pepperoni
GROWING OUR RETAIL BUSINESS HORMEL Pepperoni ® Net Sales CAGR +4.5% 2013 2016 Source: IRI, Syndicated POS Data, Total US – Multi Outlet, 52W Ending 4/9/2017
Slide 15: HORMEL GATHERINGS
GROWING OUR RETAIL BUSINESS HORMEL GATHERINGS ® ® ® ® Net Sales CAGR +6.8% 2013 2016 Source: IRI, Syndicated POS Data, Total US – Multi Outlet, 52W Ending 4/9/2017
Slide 16: HORMEL NATURAL CHOICE Meats
GROWING OUR RETAIL BUSINESS HORMEL NATURAL CHOICE Meats ® ® The #1 Natural Lunch Meat, #1 Natural Pepperoni and #2 Natural Bacon Total Sliced Lunch Meat Category Net Sales $5.2B Sales Natural/Organic $0.4B CAGR +14% +4.9% Mainstream Value $2.2B $2.6B -2% -6% 2013 2016 Source: IRI, Syndicated POS Dat
Slide 17: We Have Work To Do in Certain Categories
We Have Work To Do GROWING OUR RETAIL BUSINESS in Certain Categories Prepared BBQ Side Dishes Entrees
Slide 18: Applegate: Changing the Meat We Eat
Applegate GROWING OUR RETAIL BUSINESS Changing the Meat We Eat ® HHP 4.4 5.1 Approximately 80% 2014 2016 Conventional Channel Sales Sales +8.5% Sales +4.1% Sales +21.3% Sales +7.4% Sales +14.3% Nielsen L52wks – 4/22/17
Slide 19: Growing the Applegate Brand
Growing the GROWING OUR RETAIL BUSINESS Applegate Brand ® Foodservice Sales Fresh Pork Sales Restaurants Hotels College & Universities
Slide 20: Investing In Our Brands
Investing In GROWING OUR RETAIL BUSINESS Our Brands Meat Products Advertising Investment ($M) +65% FY 2012 FY 2016 Internal data – Meat Products including Applegate® (pre-acquisition)
Slide 21: Commercial Reel
Commercial Reel GROWING OUR RETAIL BUSINESS
Slide 22: Investing In Our Brands
Investing In GROWING OUR RETAIL BUSINESS Our Brands Net Sales +13% FY 2012 FY 2016 Internal data – Meat Products including Applegate® (pre-acquisition)
Slide 23: Innovating in the Categories Where We Compete
Innovating in the GROWING OUR RETAIL BUSINESS Categories Where We Compete
Slide 24: Investing In Our Growth
Investing In GROWING OUR RETAIL BUSINESS Our Growth Internal data
Slide 25: Key Takeaways
Key GROWING OUR RETAIL BUSINESS Takeaways • Continued focus on shifting our mix towards more value-added products • We have many exciting brands with a long runway for growth • We are investing in advertising and capital to grow our retail business
Slide 26: The Evolution of Refrigerated Foods
The Evolution of Refrigerated Foods Tom Day Group Vice President Refrigerated Foods