Is Tyson Smart to Sell Its Jerky Business When Jerky Sales Are Flourishing?
Tyson Foods (NYSE: TSN) announced early in the year that it sold off Golden Island Jerky, one of the brands it won just six years ago in a knock-down, drag-out bidding war against Pilgrim's Pride Corporation for control of Hillshire Brands. With meat snacks of all kinds thriving as a rapidly widening group of consumers decides they're a great thing to sink their teeth into, Tyson's decision to sell the brand -- possibly at a loss -- looks odd at first glance. Some analysts view the sale as a desperate effort, but some important data suggests a different reason and outcome.
At first glance, Tyson's decision to divest itself of the Golden Island Jerky brand seems questionable. Jerky, especially nutrient-rich, healthy types like those made by Golden Island, has caught on like wildfire among multiple new demographics in the past decade. This adds to, rather than replacing, continued high demand among its original core purchasers, American working class men. Women and professionals now also favor jerky and other meat snacks as nutritious, energy-dense, highly portable foods for busy lifestyles.
Mordor Intelligence estimates worldwide meat snack sales will grow at a 9% compound annual growth rate from 2019 through 2024. Other research indicates that jerky, considered in isolation from other meat snacks, is growing 4.2% annually, a trend forecast to continue through 2022 at a minimum.
Source Fool.com
