Focusing on the future; With Snee in top spot, Hormel shares plans for growth with shareholders
Published 10:42 am Wednesday, February 1, 2017
After 2016 saw Hormel Foods Corp. celebrate its 125th birthday, open its new Spam Museum and promote Jim Snee to the role of CEO, the company spent Tuesday night outlining to its shareholders how the company is primed for a big future.
“We are well positioned to fuel more record breaking years ahead,” Snee said.
The company’s shareholders filled Austin High School’s Knowlton Auditorium and an overflow area in Ove Berven Gym for the company’s 2017 shareholders meeting.
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Snee briefly outlined results and successes from 2016, touting balance across the company with four of the five business segments showing growth from 2015.
“2016, obviously another banner year for Hormel Foods,” Snee said.
The company saw sales increase by 3 percent to $9.5 billion with a good earning growth, and Snee was pleased the company has increased its dividend for 51 consecutive years.
The company has also delivered earnings growth for 28 of 31 years, which Snee called “unmatched.”
But much of Tuesday’s focus was looking ahead.
“We know we must be focused squarely on our future,” Snee said.
Snee discussed the company’s formula — or its special recipe — for success: building brands, innovation, acquisitions and balanced portfolios.
The company touched on successful new products like Herdez Guacamole Salsa and Skippy P.B. Bites, which Progressive Grocer named two top new products in 2016. The year also saw new growth through its Muscle Milk lines and new yogurt-based smoothies.
But Hormel focused more Tuesday on Vital Cuisine, a line of foods designed for cancer patients. It used former Hormel employee Skip Mayhew as an example of someone who had difficulty eating and swallowing during cancer treatments but benefitted from Vital Cuisine meals.
Hormel continues focusing its growth on multicultural products, the healthy and holistic market, global growth and on-the-go products.
“We are well-positioned for the growing on-the-go trend around the world,” Snee said.
While Hormel’s international division sales declined 4 percent last year with flat profits, Snee said the company is excited about international growth and is opening a plant in Zhejiang province later this year.
Snee said the company’s acquisitions in recent years have been important to the company’s growth.
“They’ll be a key component as we continue to modify our portfolio for the future consumer,” Snee said.
Snee said the company is always on the lookout for potential companies to acquire.
“We are exploring numerous high quality acquisition candidates both in the U.S. and around the globe,” Snee said.
But Snee cautioned acquisitions are difficult and complex, adding a lot goes into getting deals across the finish line.
“We do celebrate when we get them done, because it’s quite an accomplishment,” Snee said.
Snee called Tuesday’s meeting a great night to share the company’s plan and strategic vision with their shareholders and neighbors.
“They want to hear what’s on our minds, they want to hear what’s on our dockets,” Snee said.
Whether they have one share or hundreds or thousands of shares, Snee said all shareholders are important to the company.
“We have a great formula for success in place and then that we have a vision in terms of where we want to take the portfolio, where we want to take the company,” Snee said. “I think it just really helps them better understand.”
Snee said Hormel leaders often refer to their annual shareholders meetings as “the social event of the year” in Austin. Snee was just at a food conference and noted many of those companies have turned their shareholders meeting into an hour-long meeting in a conference room.
“It is so important to the community, but it’s a great way for us to not only recognize our shareholders but for them to hear from us,” Snee said.
Tuesday’s meeting was also a passing of the torch of sorts, as retired CEO Jeff Ettinger, who remains chairman of the board, received a loud round of applause during an introductory video collage and opened the meeting before turning the stage over to Snee.
“I’m excited about Jim’s leadership going forward, and I believe you should be too,” Ettinger said.
Ettinger retired and Snee took over as CEO in October, and Snee said his early days as CEO have gone strong after an orderly, planned transition over last year.
“The beauty of it is Jeff and I have a great working and a great personal relationship as well, so having him as a mentor for the full year, having him remaining as the chairman of the board, it’s really meant a lot to me to have him as a sounding board, as somebody I can bounce ideas off of,” Snee said during a press conference. “Because obviously he’s done the job successfully for over a decade.”
Looking ahead, the Spam Museum is past 100,000 people and looking ahead toward a goal of welcoming 125,000 visitors in its first year after opening last April at its new downtown location.
Though Hormel doesn’t have any celebrations planned in the near future, Snee said the company is remaining a part of the community through things like the Austin Community Recreation Center, a project set to get $5 million in support from the company.
“That’s going to be a great addition to the community,” Snee said. “That’ll be something that everybody will rally around and celebrate.”