Hormel Foods Stock

Hormel Foods Corporation operates as a processor of meat and food products. The company engages in the manufacturing and distribution of branded, value-added consumer items rather than commodity fresh meat products.

The company has continually expanded its product portfolio through organic growth and acquisitions. In 2021, the company acquired the Planters snack nuts business, expanding its presence in the growing snacking space.

During fiscal 2023, the company purchased a 30% common stock interest in PT Garudafood Putra Putri Jaya Tbk (Garudafood), a food and beverage company in Indonesia, expanding its presence in Southeast Asia and supporting global execution in the snacking and entertaining category.

Segments

The company operates through three segments: Retail, Foodservice, and International.

Retail

The Retail segment primarily consists of the processing, marketing, and sale of food products sold predominantly in the retail market. This segment also includes the results from the company's MegaMex Foods, LLC joint venture.

Foodservice

The Foodservice segment primarily consists of the processing, marketing, and sale of food and nutritional products for foodservice, convenience store, and commercial customers.

International

The International segment processes, markets, and sells the company's products internationally. This segment also includes the results from the company's international joint ventures, equity method investments, and royalty arrangements.

Products and Distribution

The company develops, processes, and distributes a wide array of food products in a variety of markets and manufactures its products through various processing facilities and trusted co-manufacturers. The company's products primarily consist of meat, nuts, and other food products sold across multiple distribution channels, such as the U.S. Retail, the U.S. Foodservice, and International.

Domestically, the company sells its products in all 50 states. The company's products are sold through its sales personnel, who operate in assigned territories or in dedicated teams serving major customers and who are coordinated from sales offices predominately located in major U.S. cities. The company also utilizes independent brokers and distributors. Products are primarily distributed by common carrier.

The company has a global presence within several major international markets, including Australia, Brazil, Canada, China, England, Indonesia, Japan, Mexico, the Philippines, Singapore, and South Korea. Distribution of export sales to customers is by common carrier, while the China and Brazil operations own and operate their own delivery systems. The company has licensed companies to manufacture various products internationally on a royalty basis, with the primary licensees being Danish Crown UK Ltd., and CJ CheilJedang Corporation. The company also has minority positions in food companies in the Philippines (The Purefoods-Hormel Company, Inc., 40 percent holding) and Indonesia (Garudafood, 30 percent holding).

Customers

The company serves many customers throughout the world across various sales channels. Sales to the company's largest customer, Walmart Inc. (Walmart), accounted for approximately 15 percent of consolidated gross sales less returns and allowances during the year ended October 29, 2023 (fiscal 2023). Walmart is a customer for the company's Retail and International segments. The company's top five customers collectively represent approximately 36 percent of consolidated gross sales less returns and allowances.

Patents and Trademarks

The company holds 23 U.S. and eight foreign patents. Most of the trademarks the company uses are registered in the U.S. and other countries. Some of the more significant owned or licensed trademarks used by the company or its affiliates are:

HORMEL, ALWAYS TENDER, APPLEGATE, AUSTIN BLUES, BACON 1, BLACK LABEL, BREAD READY, BURKE, CAFÉ H, CERATTI, CHI-CHI'S, COLUMBUS, COMPLEATS, CORN NUTS, CURE 81, DAN'S PRIZE, DI LUSSO, DINTY MOORE, DON MIGUEL, DOÑA MARIA, EMBASA, FAST 'N EASY, FIRE BRAISED, FONTANINI, HAPPY LITTLE PLANTS, HERDEZ, HORMEL GATHERINGS, HORMEL SQUARE TABLE, HORMEL VITAL CUISINE, HOUSE OF TSANG, JENNIE-O, JUSTIN'S, LA VICTORIA, LAYOUT, LLOYD'S, MARY KITCHEN, MR. PEANUT, NATURAL CHOICE, NUT-RITION, OLD SMOKEHOUSE, OVEN READY, PILLOW PACK, PLANTERS, ROSA GRANDE, SADLER'S SMOKEHOUSE, SKIPPY, SPAM, SPECIAL RECIPE, THICK & EASY, VALLEY FRESH, and WHOLLY.

The company's patents expire after a term that is typically 20 years from the date of filing, with earlier expiration possible based on its decision whether to pay required maintenance fees. As long as the company continues to use its trademarks, they are renewed indefinitely.

Research and Development

The company's research and development expenses were $33.7 million for the year ended October 39, 2023.

History

The company was founded in 1891. It was incorporated in Delaware in 1928. The company was formerly known as Geo. A. Hormel & Company and changed its name to Hormel Foods Corporation in 1995.