Hormel celebrates by looking ahead with expansion, international anti-hunger campaignPublished 7:48am Tuesday, February 1, 2011
While Hormel’s record year was a point of recognition during Monday evening’s shareholder meaning, it wasn’t the only cause for celebration.
Having come out of 2010 with a record $7.2 billion in sales and a strong presence in the market, Chief Executive Officer Jeff Ettinger explained to shareholders the company will move forward on two added projects in the new year: an expansion of Austin’s corporate office and an international anti-hunger initiative.
The expansion will break ground in March, with plans to wrap up the project by winter of 2011. Ettinger said in a press conference before the meeting the move was intentionally made after a record setting year, as the company looks to expand its facilities and add positions. The expansion will extend the front of the main corporate office, stretching into the lawn to include a conference room, an auditorium and a break room. The move marks the first expansion to the corporate office in 20 years.
“I think it’s good timing,” Ettinger said.
The success of the company has also pushed the wheels of non-profit work in motion. While Hormel has long been recognized for its work in anti-related hunger campaigns on local levels, it is now pairing with international humanitarian organizations to help malnourished children in Guatemala.
The launch of the company’s newest product, “Spammy,” marks a turning point in the company’s quest to constantly innovate. Spammy, only intended for the use of the anti-hunger program, is a turkey-based spread, fortified with vitamins and minerals. The high protein composition of the treat was specifically created to provide
nourishment to those experiences the effects of malnourishment.
Hormel is working on the new program with Food for the Poor, an internationally recognized organization, and Caritas, a non-profit working on the ground in Guatemala. Ettinger said the company chose Guatemala because of the company’s presence in Latin America and its need for hunger-related help; it’s estimated that half of the country’s children experience malnourishment.
“It’s been a good experience thus far,” Ettinger said of the new venture.
The Hormel team has been on the ground in Guatemala, where it has witnessed the service in action. To insure the Spammy product is not taken away from those enrolled in the program, Caritas mandates that, in order for a family to receive another month’s worth of spread, it must return all cans. The organization plans to use the cans for recycling.
Aside from corporate expansion and international humanitarianism, the focus did land on the company’s wild success in the grocery products division — a group pepperoni belongs to.
Furthering the vision of George A. Hormel, the pepperoni lines have continued to be a stronghold for Hormel. In the past year, new products, such as Pepperoni Minis and Pepperoni Stix have led the division as a leader in the company. Sales of party trays, specifically those tailored for certain holidays and national celebrations, have also carried the division through to record sales.
All five of Hormel’s divisions did see growth in 2010.
What about the animals?
Not everyone who attended Monday’s meeting was in it to applaud Hormel’s plans and accomplishments. A representative with the Humane Society of the United States spoke on behalf of the organization’s concern with Hormel’s use of gestation crates for pigs. The use of the crates, which do not allow for a pig to turn around, have been banned in seven states. The Humane Society representative asked Ettinger when Hormel would begin to move away from the practice, as many of its large corporate meat producing competitors have.
Ettinger responded by saying the company is doing away with the crates in Arizona, a state that has banned the practice. The Arizona location is moving to a sow housing structure toward the end of 2011-12. He said the company will keep its eyes on the switch and consult with animal care experts on how or whether sow housing should move forward to other Hormel locations.
“If it’s different, we would look at doing the same things in other facilities.” Ettinger said.
Shareholders approved a 2-for-1 stock split, announced by Ettinger in December of 2010.
The split will move the company into a more favorable position in the world of stock markets, as the cost of each share will now decrease. Overall shares will remain the same for current stockholders, though individual shares will essentially double. For those who are looking to Hormel to purchase stock, the company’s shares may now appeal to a wider audience, including individual investors.
Ettinger cited the company’s strong performance over the last decade, as well as a bright future as the driving force behind the split.