Hormel Foods’ mission is to elevate the everyday experience by making its products the favorite part of any eating occasion.
Hormel Foods is a food company. The firm operates five reportable business segments:
Grocery Products – Provides shelf-stable food products sold primarily in the retail market.
Refrigerated Foods – Provides branded and unbranded beef and pork products for retail, foodservice, and fresh product customers.
Jennie-O Turkey Store – Provides branded and unbranded turkey products for retail, foodservice, and fresh product customers.
Specialty Foods – Provides private label shelf stable products, nutritional products, sugar, and condiments to industrial, retail, and foodservice customers.
International & Other – Provides products for international sale.
In 1887 George A. Hormel, a wool and hide buyer, borrowed $500 to start an entrepreneurial venture. With his partner Albrecht Friedrich, he launched a pork packing business and retail meat market in Austin, Minnesota. Hormel addressed the business’s production side while Friedrich dealt with the retail side. Despite success in the first few years, their partnership dissolved in 1891.
Hormel went on to establish his own operation, George A. Hormel & Company. With employee George Petersen he converted an abandoned creamery into a meatpacking plant with a slaughterhouse and smokehouse. They also launched Hormel Provision Market, which sold their meat products and rapidly became the city’s biggest and most popular retail meat business.
Despite brisk sales, the firm faced stiff competition from larger meatpackers. In order to compete, it expanded by hiring many new employees and buying more land. It also invested in a new refigeration facility and other equipment. In 1915 it began making lines of dry sausage, and in 1926 it unveiled the first canned ham. The firm went public in 1928 and changed its name to Hormel Foods in 1993.
Business model of Hormel Foods
Hormel Foods has a segmented market business model, with customers that have slightly different needs. The company targets its offerings at retailers, wholesalers, foodservice distributors and operators, and other outlets.
Hormel Foods offers three primary value propositions: accessibility, cost reduction, and brand/status.
The company creates accessibility by providing a broad range of options and making its products widely available. It distributes its products in all 50 U.S. states and throughout the world, with its larger markets including Australia, China, Canada, Japan, England, Mexico, and Micronesia. It also has acquired many companies since its founding, enabling it to greatly diversify its portfolio.
The company reduces costs by providing discounts and deals. It offers free printable coupons on its website for its products.
The company has established a powerful brand due to its success. It markets its products in 75 countries worldwide and generated $9 billion in revenues in 2015. It produces over 30 brands, including prominent ones such as Skippy, Applegate, Spam, Justin’s, and Wholly Guacamole. Lastly, it has won many honors, including:
Placement on the S&P 500 Index, Fortune 500 List, and Barron’s 500 List
Recogniton as one of the Most Trustworthy Companies by Trust Across America
Recognition as one of the 100 Best Corporate Citizens by Corporate Responsibility Magazine
Recognition as one of the Best Companies for Leaders by Chief Executive Magazine
Ranking as #1 on the Best Companies to Sell For list by Selling Power Magazine
M&A Mid-Market Award for Deal of the Year, Mergers and Acquisitions Magazine
Hormel Foods’ main channel is its direct sales team. It also sells its products through independent brokers and distributors. The company promotes its offering through its website, social media pages, print/online/TV advertising, and promotions such as contests and sweepstakes.
Hormel Foods’ customer relationship is primarily of a self-service nature. Customers utilize its products while having limited interaction with employees. That said, there is a personal assistance component in the form of phone and e-mail support.
Hormel Foods’ business model entails the processing, marketing, and sale of its products to its customers.
Hormel Foods’ key partners are the suppliers that provide the goods and services it needs to process its products. The goods and services fall into the following categories:
Packaging – Adhesives, Barrier Film & Bags, Closures - Plastic & Metal, Corner Boards, Corrugated Folding Cartons, Glass Jars, Labels, Netting, PET Containers, Plastic Jars, and Tape
Indirect Supplies – Pallets, Personal Protection Equipment, Poly Bags, R&D Supplies, Safety Supplies, Sanitation Chemicals, and Towels & Tissue
Services – Laundry and Pest Control
Hormel Foods’ main resources are its physical resources, which include three plants that harvest hogs for processing; seven turkey harvest and processing operations; and 35 facilities that produce and distribute other manufactured items. It places a high priority on its intellectual property, with 46 issued patents in the U.S. and 17 foreign issued patents.
Hormel Foods has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is cost of products sold, a variable expense. Other major drivers are in the areas of sales/marketing and administration, both fixed costs.
Hormel Foods has one revenue stream: revenues it generates from the sales of its products to its customers.
James P. Snee,
President and CEO
info: James P. Snee earned a Bachelor of Arts degree in Marketing at New Mexico State University and an MBA at the University of St. Thomas. He previously served as President of Hormel Foods International Corporation and Group Vice President of Hormel Foods.
James N. Sheehan,
SVP and Chief Financial Officer
info: James N. Sheehan earned a Bachelor’s degree in Business Administration at Missouri Western State University. He previously served as Chief Accounting Officer and Treasurer of Hormel Foods and as President of Hormel Financial Services.
Larry C. Lyons,
SVP of Human Resources
info: Larry C. Lyons earned a Bachelor’s degree in Industrial Technology at the University of Wisconsin-Stout. He previously served as VP of Human Resources, Corporate Manager of Safety and Security, and Manager of Personnel and Purchasing at Hormel Foods.
Bryan D. Farnsworth,
SVP of Supply Chain
info: Bryan D. Farnsworth earned a B.S. degree in Manufacturing Administration at Western Michigan University. He previously served as Vice President of Quality Management at Hormel Foods and as Director of Quality Control at Jennie-O Foods.