Tyson Foods, Inc TSN, which is bent on expanding its protein-rich products, revealed plans to acquire Tecumseh Poultry LLC, a renowned branded organic chicken producer. The deal will add the popular air-chilled Smart Chicken brand along with a variety of chicken sausages, fresh and deli-style chicken to Tyson Foods’ portfolio. Tecumseh Poultry’s operations are mainly carried out through two plants in Nebraska, which will now form part of Tyson Foods’ business.
Tecumseh Poultry: Another Bountiful Addition
Well, this news came in just after the company announced the sale of non-protein business — Van’s and Sara Lee Frozen Bakery. Notably, Tyson Foods’ latest move underscores its constant efforts to expand protein-rich offerings, as the demand for such products has been growing and is expected to rise further. Along with the widening demography of protein-savvy consumers, consumers’ demand for fresh and organic food options have been growing rapidly, courtesy of rising health consciousness.
Considering these factors, Tyson Foods’ latest move to bring Tecumseh Poultry under its wings fits well and is expected to adequately bolster the company’s organic chicken offerings. Markedly, Tecumseh Poultry uses air-chilling techniques to process chicken, a method that is monitored by the USDA and is considered safe. Moreover, the Smart Chicken brand is quite popular and holds a strong market position in the fresh chicken category. Management stated that Tecumseh Poultry, will be operated as a separate wholly-owned subsidiary. Apart from this, the company’s organic products include brands such as Aidells and NatureRaised Farms.
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Other Strides in Bolstering Protein Offerings
Tyson Foods’ growing appetite for protein-rich products has propelled the company to constantly strike new deals to augment protein-packed offerings. In addition to expanding organic foods, the company has been venturing into alternative sources for meat and protein products, evident from the buyouts of Beyond Meat and Memphis Meats. Further, the company has made several investments to strengthen poultry production in Tennessee. Such efforts, combined with the acquisition of AdvancePierre and Original Philly, indicate the company’s dedicated efforts on augmenting protein-rich food products.
Driven by such fruitful ventures, Tyson Foods’ Chicken, Beef and Prepared Foods segments have been delivering a solid performance since the past few quarters. Management expects demand for protein to continue rising and is on track to make most of all opportunities in the space. Such efforts have also been boosting investors’ confidence in this Zacks Rank #3 (Hold) stock that has rallied 15.5% in the past year compared with the industry’s 4.9% gain. That said, we expect the latest inclusion of Tecumseh Poultry to reward and further augment the company’s performance.
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