HRL » Topics » True Taste

This excerpt taken from the HRL 10-Q filed Jun 9, 2006.
True Taste high-pressure processing technology.

 

Jennie-O Turkey Store

 

The Jennie-O Turkey Store (JOTS) segment consists primarily of the processing, marketing, and sale of branded and unbranded turkey products for the retail, foodservice, and fresh customer markets.

 

JOTS net sales increased 1.9 percent for the second quarter and 2.1 percent for the six months ended April 30, 2006, versus the comparable periods of fiscal 2005. Sales tonnage decreased 3.8 percent for the second quarter and 4.7 percent for the six months, compared to fiscal 2005 results. The tonnage reductions reflect decreased commodity tonnage, resulting from lower livability in Company owned flocks and fewer poult placements at the beginning of the year. Flock livabilities have improved over the first quarter, and the Company expects further progress over the remainder of the fiscal year. Net sales grew despite the decreases in tonnage due to the Company’s continued emphasis on reducing commodity sales, while building its value added portfolio of products. Value added tonnage gains were noted in all three of the Retail, Deli, and Foodservice business units, with combined tonnage up 11.6 percent for the quarter and 10.0 percent for six months, compared to fiscal 2005. Commodity pricing was mixed for the quarter and year-to-date period, with fresh breast meat above prior year levels but fresh thigh meat trailing last year’s levels. Although whole bird pricing was favorable compared to 2005, the second quarter is not historically a strong volume quarter.

 

Segment profit for JOTS decreased 20.6 percent for the second quarter and 1.9 percent for the first six months of fiscal 2006 compared to the prior year. The decrease for the quarter is due primarily to increased feed and energy-related costs compared to fiscal 2005, and decreased commodity meat sales. Feed costs per ton for the

 

 

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second quarter were 3.1 percent higher than last year due to unusually low costs in the second quarter of fiscal 2005, but remain lower for the comparable six month period. Higher energy-related costs also reduced segment profit for the quarter by approximately $3,800, driven by higher propane costs and freight expenses.

 

The Company’s value added business units continued to increase their overall operating profit contribution through new distribution of existing product lines and continued success in new product development. In the retail division, product lines reflecting strong second quarter increases over the prior year were Jennie-O Turkey Store branded fresh whole birds (up 307,000 lbs. or 12.5 percent), Jennie-O Turkey Store

This excerpt taken from the HRL 10-K filed Jan 13, 2006.
True Taste Technology high pressure processing. This initiative is proceeding on target with Company expectations. No other new product in fiscal 2005 required a material investment of the Company assets.

Domestically, the Company sells its products in all 50 states. Hormel products are sold through Company sales personnel, operating in assigned territories coordinated from sales offices located in most of the larger U.S. cities, as well as independent brokers and distributors. During fiscal 2004, dedicated sales teams were also developed to serve major retail customers and coordinate sales of both Grocery Products and Refrigerated Foods products. As of October 30, 2005, the Company had approximately 610 sales personnel engaged in selling its products. Distribution of products to customers is primarily by common carrier.

Through HFIC, the Company markets its products in various locations throughout the world. Some of the larger markets include Australia, Canada, China, England, Japan, Mexico, and Micronesia. The distribution of export sales to customers is by common carrier, while the China operations own and operate their own delivery system. The Company, through HFIC, has licensed companies to manufacture various Hormel products internationally on a royalty basis, with the primary licensees being Tulip International of Denmark and CJ Corp. of South Korea.

EXCERPTS ON THIS PAGE:

10-Q
Jun 9, 2006
10-K
Jan 13, 2006
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