US-based Hormel Foods is anticipating growth in the foodservice and club channels after experiencing demand for its Bacon1 product.
In a conference call with analysts yesterday (26 November), the Spam and Jennie-O Turkey Store maker’s CEO, Jim Snee, singled out the product for special mention.
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“While many products across retail deli and foodservice contributed to the sales growth, I would be remiss if I didn’t call out the growth we are seeing from Bacon 1,” he said.
“The Hormel foodservice team is doing an excellent job growing Bacon 1 account-by-account. We also recently introduced the product into the club channel under the brand Hormel Thick Cut Reserve.”
Snee said recent expansion at Hormel’s facility in Wichita, Kansas, is providing “the necessary runway to continue growing this important business”.
Later in the session, he returned to the theme when he said: “When you talk about our foodservice brands, especially Bacon 1 and Fire Braised, the growth opportunities for both of those brands in our foodservice space are still very, very strong.”
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By GlobalDataHe added: “We’re now moving Bacon 1 into the club channel under our Thick Cut reserve brand, where it’s met with a lot of consumer acceptance. So we feel good about both Bacon 1 and Fire Braised, not only in core foodservice, and then we didn’t even talk about the opportunities that they represent in the deli business for the prepared foods section.”
Last month, at an investor day event held at the New York Stock Exchange, Snee outlined the company’s planned transition from what was once just a pork and turkey products manufacturer into a “global branded food company”.
He described the recently launched deli division as its “newest growth engine” to accompany the planned ramp up of its foodservice and international business units.
In the year to 27 October, Hormel’s net sales declined 1% to US$9.5bn. On an organic basis, the company’s net sales rose 1%.
Operating income was also up by 1% – hitting $1.2bn – with net earnings down 3.3% at $979.1m.
