Kiger's Notebook

Hormel to Rev things up with new snack wrap

Here's some from a pice by Keith Nunes on Meatpoultry.com (A website with protein. Heh.) about Austin's favorite Fortune 500 company, Hormel Foods.

The maker of Spam is rolling out a new snack wrap line called REV.

REV branded snack wraps are being shipped to retailers nationwide and the company plans an advertising campaign in July to promote the new product. The new line is viewed by the company as a way to improve sales and operating income within its Refrigerated Foods business segment.

“We are excited about the potential growth that our new Hormel REV snack wraps will bring to our Refrigerated Foods sales,” said Jeff Ettinger, chairman, president and CEO in a conference call with financial analysts on May 23.

The REV line of products will feature eight varieties, including: pepperoni, ham and cheese, peppered turkey, Meat Lovers Pizza, Italian style ham, hot pepper ham, Italian style, and spicy Italian style. Each wrap features a combination of meats, mozzarella cheese and a flatbread wrap.

Each 3-oz serving features between 15 grams and 18 grams of protein, a nutrition component that is called out on the package.

“We believe the investment we are making in the REV snack wrap rollout will establish the foundation for a beneficial new product platform for the Refrigerated Foods group,” Ettinger said.

During the second quarter of fiscal 2013, ended April 28, Hormel’s Refrigerated Foods segment had operating profit of $54,680,000, up 3 percent from $53,009,000 during the same quarter of the previous year. The segment had sales of $1,011,370,000, down 2 percent from $1,031,975,000.

Ettinger said the decline in the business unit’s sales was attributable to the planned reduction of slaughter levels at its hog processing operation and from exiting a feed sales business.

FTC OKs 'early termination' of Hormel/ Skippy deal

It looks like the Hormel folks in Spamtown USA might be able start spreading the peanut butter goodness in the near future.

Remember the deal where Austin-based Hormel made a deal with Unilever to buy the Skippy peanut butter brand for $700 million?

Well, the Federal Trade Commission granted Hormel's request for "early termination" this week. In case, like myself, you aren't sure what 'early termination' means, here's what that means:

Any person filing an HSR form may request that the waiting period be terminated before the statutory period expires. Such a request for "early termination" will be granted only after compliance with the rules and if both the Federal Trade Commission and Department of Justice Antitrust Division have completed their review and determined not to take any enforcement action during the waiting period. In some instances, after a Request for Additional Information and Documentary Material has been issued, the investigating agency will determine that no further action is necessary and terminate the waiting period before full compliance with the Second Request is made.

So it sounds like a good thing. The deal has been given the green light to speed ahead.

Can the new peanut butter favored Spam be far away? Heh.

75-year-old Spam rings a bell

Spam and the Big Apple = a tasty combo?

Hormel Foods CEO Jeffrey Ettinger made the trip from Austin to New York City Tuesday to mark the 75th anniversary bring ringing the closing bell for the New York Stock Exchange.

 

Here's a quick vid from CNN chatting with Ettinger. He dodges the question Hillshire Farms pretty smoothly and gives a shout out for Austin, "the town that Spam built."  

 And here's a pic of the Spam-flavored lip balm...just because that product still amuses me. Heh.

Hormel's earnings and profit drop in 4Q

Wrapping up a year where it raised prices on many of its products, Hormel Foods Corp. showed a drop in earnings and profit for its fourth quarter, though its sales inched up and it exceeded market estimates.

In its earnings released this morning, the Austin-based Hormel reported an earnings decline of 3 percent to $117.3 million compared to $121 million in the same quarter in 2010.

"Our tonnage was down in comparison with the 14-week quarter last year, but we held our own on volumes in the face of significant pricing actions," said Chairman and Chief Executive Jeff Ettinger. "We are looking for our grocery products, specialty foods and all other (international) units to drive profit growth in fiscal 2012, as our refrigerated foods and Jennie-O Turkey Store segments maintain their position against historically high results."

Despite the poor economy boosting the popularity of its inexpensive Spam and Dinty Moore lines, Hormel was hit with higher costs for pork and other commodities. It passed those costs on supermarket shoppers.

Refrigerated Foods, Hormel's division that represents 36 percent of its operating profit, was down 19 percent in profit compared to last year's fourth quarter. Division includes Hormel's lines of bacon, ham and deli meats. Its volume of sales went down by 8 percent, though its sales in dollars was up by 1 percent.

Its Grocery Products segment, which sells the Spam family of products, marked a 19 percent increase in net profit. However, its volume of sales was down 6 percent and its sales in dollars dropped by 2 percent. This division accounts for 23 percent of the company's operating profit.

Grocery Products' profit was given a boost by Hormel's acquisition of a Fort Worth, Texas-based guacamole maker, Fresherized Foods. That purchase in August was done through MegaMex Foods, a joint venture of Hormel and Herdez Del Fuerte.

The Jennie-O Turkey Store was the standout among the divisions for the quarter with a solid showing with profit climbing by 4 percent and sales going up by 2 percent. Jennie-O accounts for 25 percent of Hormel's operating profit.

For the overall year, the picture looked better than for the quarter. Hormel tallied a 16 percent increase in net earnings to $474.2 million compared to $409 million for 2010.

Canned meat battle Spam vs Prem ends in a tie

Here's some from an article by the PB's legal eye Matt Russell about the resolution of Hormel Foods tussle with Netherlands-based Zwanenberg Food Group.

More of the article can be found here.

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A trademark infringement case involving the iconic yellow and blue packaging of Spam food products has been dismissed in federal court.

A settlement between Austin-based Hormel Foods and Zwanenberg Food Group led to the dismissal of the suit by Judge David Doty Tuesday in U.S. District Court, with both parties agreeing to dismiss all claims and counterclaims.

Hormel filed the suit in March, alleging that Zwanenberg used packaging starting in 2010 on a competing product, Prem, that was "confusingly similar" to Spam.

While Zwanenberg altered the label design at Hormel's request, Hormel maintained that the new label still created confusion because it still used a yellow-on-blue color scheme. The products were sold in Japan and the Philippines, according to the complaint.

Zwanenberg responded that its packaging was unlikely to cause confusion with Hormel's packaging, adding that Spam's yellow lettering on a blue background "is generic and/or otherwise unprotectable as a matter of law."

Hormel CEO: Middling pork profits in 2011, 2012

Here's a snippet of a piece by Marshall Eckblad of Dow Jones about Hormel Foods appearance at Barclay Capital's Back to School Consumer Conference in Boston today.
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"Our expectation for remainder of this year and next year is middle-of-the-road for those margins," said Jeffrey Ettinger, Hormel's president and chief executive. He made the comments during an investor conference in Boston.

Investors have been watching the profit margins at pork processors for signs of weakness as supplies have grown sharply in recent weeks after pork prices hit records in July and August. Higher supplies of pork products along with enduringly high feed costs for hogs could squeeze pork processors much the way chicken processors are currently suffering under a supply glut.

Spam Lip Glaze? Yes, this exists

Here is a taste from my column in today's paper. I lead off with a Hormel product that I can imagine Miss Piggy using.

Check out the print edition for more details, including how well such a lip balm is selling.

The art is from ThinkGeek.Com.

Pucker up with pork-flavored lips.

Austin's Hormel Foods, known for its iconic Spam canned pork, rolled out Spam Lip Glaze balm in early August.

For between $1.95 to $2.99 a tube, fans of Minnesota's favorite canned meat can keep their lips soft and meaty with a Spam-flavored balm.

"Rubbing meat on your face is a good way to get noticed, but probably for all the wrong reasons. But what if you do it because you really want to taste meat, but not eat it? Well, grab yourself some Spam Lip Glaze and you can rub the flavor of meat on your lips without getting weird stares from having bacon hanging from your cheeks."

That's how ThinkGeek.Com describes the latest quirky product that Hormel has branded with the Spam logo.

Hormel's optimistic with solid 3Q numbers

Here's some from a quick piece I whipped together this morning on Hormel Food's third quarter earnings report:

Third quarter increases of earnings and sales are buoying Hormel Food Corp.'s optimism.

The Austin-based food processor rolled out a solid earnings report this morning showing a 15 percent increase in earnings and a 10 percent growth in sales, both compared to the third quarter in 2010.

With those increases, Hormel improved its economic forecast for the fiscal year.

“As a result of our solid results in the third quarter, we are raising our full year guidance range to $1.70 to $1.75 per share from $1.67 to $1.73 per share,” said Jeffrey M. Ettinger, chairman of the board, president and chief executive officer.

For the third quarter, the company showed year-over-year gains in many of its segments.
Grocery products, which contribute about 21 percent to Hormel's total operating profit, grew profits to $30.43 million. That's up 19 percent compared to the same quarter last year, and sales were up 4 percent.

"Our grocery products segment generated solid results, benefiting from strong sales of Mexican products by our MegaMex Foods joint venture, and of our Spam family of products," stated Ettinger in the report. "I was pleased to see sales of our Hormel Compleats microwave meals grow nicely in the quarter."

Also, Jennie-O Turkey Store posted a 14 percent profit increase over 2010.
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The "all other" segment, consisting mostly of the Hormel Foods international operations, posted a whopping increase of 67 percent compared to 2010.

Hormel's largest segment, refrigerated foods, had a 12 percent drop in profits despite a 10 percent increase in sales.

"Lower pork operating margins hindered our refrigerated foods segment results," said Hormel's CEO.

Hormel picks up guacamole maker

Once again showing its taste for Mexican food, Austin-based Hormel Foods is now ready to serve up some guacamole after acquiring the top U.S. producer of the avocado dip.

MegaMex Foods, a joint venture of Hormel and Herdez Del Fuerte, announced this morning that it had wrapped up the purchase of Fort Worth, Texas-based Fresherized Foods.

The financial terms were not released. MegaMex first announced its intention to purchase this company last month.

"This transaction further demonstrates the clear commitment of the MegaMex Foods partners to become the U.S. leader in Mexican food," said Jeff Ettinger, chairman of the board, president and CEO at Hormel Foods.

Fresherized is described as being the top maker  of guacamole in the U.S. under its Wholly Guacamole. It also makes Wholly Salsa and Wholly Queso products.

It employs about 1,500 people. It has facilities in Mexico, Chile and Peru.

In 2010, it was processing 2 million pounds of avocados a week.

"We are pleased with the closing of this purchase "Guacamole continues to build in popularity among consumers, not only as a nutritious and flavor-enhancing dip, but also as a sandwich spread," said Luis Marconi, managing director at MegaMex Foods.

Hormel estimates annual sales from Fresherized will be about $140 million.

Fresherized officials said in 2010 that the company's annual sales had been increasing by 30 percent a year since 2004.

“This acquisition enhances the position of MegaMex Foods as a one-stop-shop for Mexican foods.” said Enrique Hernández-Pons Torres, CEO of MegaMex Foods in this morning's announcement.

This purchase follows MegaMex's 2010 acquisition of Don Miguel Foods Corp., which makes Mexican flavored appetizers and snacks.

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Humane Society takes Hormel to task

Here's some a piece I have in today's paper about the U.S. Humane Society trying to take a bite of Austin's Hormel Foods for its treatment of sows.

Here's a link to the full piece.

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The Humane Society of the United States is calling Hormel Foods' treatment of pigs into question using a shareholder resolution. The humane society owns about $3,000 worth of shares in the Austin food-processing company.

The humane society is asking for disclosure of how many of the company's breeding pigs are confined in gestation.

"Hormel appears to be behind the times on this issue, and shareholders deserve to understand what the company is — or isn’t — doing to correct its support for this unnecessary and extreme cruelty," said Josh Balk, director of corporate policy for the humane society's farm animal protection division.

The humane society made its request Wednesday in a shareholder resolution. Hormel responded with a limited statement. It  did not respond to requests for specific information about its use of gestational crates.

"On a regular basis, Hormel Foods studies the best industry practices for sow housing, which includes consulting with noted experts within the field of animal care," stated Julie H. Craven of Hormel Foods in an email.

Gestation crates are metal cages that critics say are not large enough for an animal to turn around in. The humane society says the crates "virtually immobilize breeding sows for most of their lives."

Proponents of the practice say it keeps the animals from attacking each other and prevents injuries.

The humane society estimates that 70 percent of breeding sows in the U.S. are housed in gestation cages, but the campaign against the practice has heated in during the past 10 years. Eight states have passed laws to phase out the use of the cages. The issue has not come up at the Minnesota Legislature.

In 2012, Arizona's Humane Treatment of Farm Animals Act takes effect. It will affect Hormel directly. Hormel-owned Clougherty Packing has a large facility in Arizona, which raised about 250,000 animals a year in 2007.

Craven said the company will eliminate gestation crates in Arizona next year. In her emailed statement, she said that that change "will give us a first-hand opportunity to learn more about this sow housing option.

"We will then evaluate and consider implementing group sow housing at other company-owned farm operations.”