Tyson isn’t chicken
It’s the world’s second biggest meat producer, but now its new CEO is pouring money into animal-free alternatives. Here’s a fascinating look at the man whose adapting this mammoth business in the face of several forces of disruption….
Tyson produces 1 of every 5 pounds of meat consumed in the US. Tom Hayes (left), who’s served as chief executive officer since December 2016, and his 122,000 employees annually process and sell $15-billion worth of beef, $11-billion of chicken, and $5-billion of pork.
They also formulate, package, and sell $8-billion in prepared foods under a brand roster that includes Hillshire Farm, Jimmy Dean, Ball Park Franks, Original Philly Cheesesteak, and Aidells Sausage.
Half of the products are distributed by retail grocers; most of the rest go to McDonald’s, Burger King, Wendy’s, KFC, and other food-service outlets.
Hayes, 53, is an upbeat, shoulder-punching, “call me Tom” kind of leader—“a man of the people,” as more than one member of his team describes him.
All that bonhomie has emboldened and perhaps insulated the CEO, who’s positioned himself as a forward-thinking renegade in an industry many consider ethically unsound, environmentally catastrophic, and mired in old-world thinking.
Since Hayes started, he’s trumpeted the promise of “sustainable proteins” and “cleaner foods” in the media (Squawk on the Street, Mad Money), at conferences (Davos, Milken), and in the Twittersphere.
He’s made practiced statements such as “I took this job to help revolutionise the global food system” and pledged “to raise the world’s expectations for the good we can do through food.”
The language sounds awfully suspicious coming from a man whose company processes about 1.8 billion animals per year.
Tyson operates dozens of mass-scale slaughterhouses and has been criticised for water and air pollution, animal cruelty, and labour violations. It’s also responsible for tens of millions of metric tons of greenhouse gas emissions a year, on par with the whole of Ireland.
“To call it a sustainable or do-gooder company would be absurd,” says Matthew Prescott, senior director of food and agriculture for the Humane Society of the US.
“We’re so big that the industry can’t change if we don’t lead.”
Yet Hayes, whose square-jawed face and brilliantined hair give him the look of a 1950s marketing boss, insists it’s precisely because of Tyson’s scope that he has the potential to make a difference: “We’re so big that the industry can’t change if we don’t lead.”
In his first few months at the helm, Hayes replaced 6 of 10 division heads—many with hires from outside the meat industry. He also created two roles: chief technology officer and chief sustainability officer.
Hayes and his team rolled out new sustainability goals in rapid succession: Tyson would remove antibiotics from all Tyson-branded chicken products in 2017.
It would slash its greenhouse gas emissions 30 percent by 2030, not only internally but also throughout its supply chain. It would continue to improve efficiency at its plants, expand organic product offerings, and practice sustainable land management on 2 million acres of corn grown for animal feed.
Hayes pledged to enhance employee welfare, improve animal treatment, and strengthen rubrics that protect a Tyson-raised animal’s right to “a life that’s worth living”.
He also began trumpeting a plan to shift his company from a grower and processor of meat to a producer, broadly, of proteins.
In May the company became a seed investor in Future Meat Technologies, an Israeli startup developing “cultured meats” from cells in petri dishes.
Tyson was also a major player in a recent investment round for Memphis Meats, a company in San Francisco developing lab-grown beef, poultry, and fish that’s also funded by Bill Gates.
And in December of last year, Tyson joined in a $55 million round of financing for the California-based startup Beyond Meat, the leading brand in plant-based protein products nationwide.
Tyson isn’t the only player in the conventional meat industry making unconventional investments. Cargill bought into Memphis Meats, too. Perdue Farms is investing in humane processing equipment, slow-growth chicken breeds, and niche organic brands. Even Hormel Foods, maker of Spam, is developing animal-free products.
If Tyson doesn’t stay ahead of the game, it runs the very real risk of falling behind. “We want to actively disrupt ourselves,” says Hayes. “We don’t want to be Kodak.”
He won’t disclose how much money he’s plowing into alternative proteins, but for now, it’s far less than he’s putting into status quo meat production. The entire fund Hayes established for sustainable technology investment is $150-million—about half the cost of a poultry complex Tyson is building.
But even his fiercest critics say these investments are a worthwhile start…..