Austin, Minn. – Hormel Foods Corp. executives don't want the company to be viewed as a stuffy old meatpacker, and they have the portfolio — or at least the foundations of one — to show why.
Still one of the country's biggest meat suppliers — and the proud parent of Spam — Austin-based Hormel in the past three years transformed through acquisitions from a commodities-only organization into a packaged-goods one. With a new chief executive, the company has created an internal goal to stay on a growth path.
The goal: Every year, make sure that 15 percent of revenue comes from products introduced in the past five years. For the fiscal year that ended in October, it hit 12 percent on that mark.
"The 15 percent is a very aggressive number," says the new CEO, Jim Snee, a 27-year company veteran who started in the top job this month. "It's a stretch goal for our organization."
Hitting the gas on growth — Hormel's long-term goal is for regular annual gains of 5 percent in sales and 10 percent in profits — isn't easy for a firm that's already large and whose best-known products, like Spam and Black Label bacon, are well-established. Indeed, Snee says the company simply cannot hit those marks with its existing stable of products.
"Some of our brands, they are great, but they are legacy brands. They will grow, but not at that rate," Snee said. "We have higher expectations for the organization, so we do need to continue to find growth companies to supplement our portfolio."
At the company's headquarters in Austin, Snee and other Hormel executives outlined to the Star Tribune four key categories of companies or products for additional acquisitions: multicultural, healthy, international and on-the-go or snacking. Each category nods to different trends being shaped by long-term changes in the how and what people eat.
And during its fourth-quarter earnings call with investors on Tuesday, company leaders said they have a "robust and full" pipeline of acquisitions targets in the short term.