Hormel Foods Bets on Transform and Modernize to Drive Profitability

Hormel Foods Corporation (HRL) is leaning heavily on the multi-year Transform and Modernize (T&M) initiative to reshape itself for long-term profitability. While commodity inflation dented margins in the third quarter of fiscal 2025, leadership emphasized that T&M is not simply a cost-cutting program but a full-scale effort to future-fit the business. In the fiscal third quarter alone, approximately 90 projects delivered measurable bottom-line contributions.

A key component of T&M is the modernization of the company's supply chain. This was demonstrated by the strategic decision to partially close a facility and reallocate production to other sites, a move aimed at improving efficiency and scalability. Beyond manufacturing, T&M is also about brand modernization, with the company highlighting the ongoing renovation of brands like Hormel pepperoni. The pepperoni brand's update, which included refreshed packaging and a new campaign, is an investment to excite customers and signal that the brand is evolving with consumer tastes.

Financially, the program is on track to deliver $100-$150 million in incremental benefits in fiscal 2025, with management expecting results near the top end of that range. These savings have already helped soften the impact of a steep jump in pork bellies and persistent beef inflation. With roughly two years of groundwork already laid, Hormel sees T&M as a foundational platform for sustainable growth, bridging today’s challenges with tomorrow’s opportunities.

For Hormel, Transform and Modernize is more than a margin defense mechanism. This is a bet on transforming how it operates. In a volatile industry marked by shifting consumer behaviors and cost swings, that bet could prove central to restoring profitability momentum.

How PPC, TSN & SFD Stack Up Against HRL

Pilgrim’s Pride Corporation (PPC) is leveraging strong consumer demand and operational efficiencies to strengthen its profitability. In the second quarter of 2025, net sales rose 4.3% to $4.76 billion, supported by growth in U.S. and European operations. Beyond commodity exposure, Pilgrim’s Pride is advancing portfolio diversification, with Prepared Foods up more than 20% and branded offerings like Just Bare gaining traction. These initiatives position Pilgrim’s Pride to sustain growth in a competitive protein market.

Tyson Foods, Inc. (TSN) is leaning on its diversified protein portfolio to navigate volatile markets, supported by strong consumer demand for animal protein and resilience across channels. In the third quarter of fiscal 2025, Tyson Foods’ revenues rose 4% to $13.9 billion, with adjusted earnings per share of 91 cents, up 5% year over year. The Chicken segment was a standout, posting $4.22 billion in sales and more than 12% adjusted operating income growth. With operational excellence, brand strength and international expansion, Tyson Foods aims to sustain profitability and reinforce its leadership in the global protein market.

Smithfield Foods, Inc. (SFD) delivered record second-quarter fiscal 2025 adjusted operating profit of $298 million, up 20% year over year, with adjusted operating margin expansion of 60 basis points to 7.9%. Growth was led by Packaged Meats, where strong demand and mix improvements drove a 14.2% margin. Smithfield Foods’ Fresh Pork and Hog Production also improved profitability, aided by cost efficiencies and favorable markets. Backed by its well-known brands, operational agility and sharpened focus on efficiency, Smithfield raised the full-year outlook on the last earnings call, signaling confidence in sustaining profitability gains.

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