Americans consumed 180 pounds of beef, pork and poultry in 2018, a 10% increase since 1970, with Tyson Foods (NYSE: TSN) being one of the top choices. Although plant-based meats have risen in popularity, they only made a fraction of sales compared to that of meat and poultry. However, the company has had to reevaluate many factors amid the coronavirus pandemic.
Tyson Foods is one of the largest food companies, with about 20% of the beef, pork and chicken production within the U.S. Additionally, the company delivers brands such as Jimmy Dean and Sara Lee to supermarkets all over.
Amid the global pandemic the company experienced a combination of issues including higher production costs, lower levels of productivity and softer demand. As lockdown orders were implemented and restaurants around the country closed, the multinational corporation found itself struggling. Furthermore, thousands of Tyson employees were infected with coronavirus at various processing plants. Ultimately, many plants were closed down thus hightening the meat shortage in grocery stores everywhere.
“We’ve implemented a wide variety of measures to look after our workers, from measuring temperatures as they come through the door, face coverings, staggered breaks, expanded room and social distancing,” said Stewart Glendinning, CFO of Tyson Foods. “All of these are designed to help keep our workers safe. Keeping our workers safe is what will keep our plants running.”
Third quarter results reflected a 22% fall in profits compared to the previous year. As a consequence, the company decided to replace CEO Noel White with its president Dean Banks.
″Covid-19 has exposed weaknesses in the meat system that people have been talking about for years but that have never been exposed as they were now,” said Christopher Leonard, author of “The Meat Racket.” “Essentially what Covid-19 showed was the profound fragility that happens when you move all of your production into as few slaughterhouses as possible.”