Hormel Foods Corporation, a Delaware corporation, was founded by George A.
Hormel in 1891 in Austin, Minnesota, as George A. Hormel & Company. The
Company started as a processor of meat and food products and continues in this
line of business. The Company name was changed to Hormel Foods Corporation on
January 31, 1995. The Company is primarily engaged in the production of a variety
of meat and food products and the marketing of those products throughout the
United States and internationally. Although pork and turkey remain the major
raw materials for its products, the Company has emphasized for several years
the manufacturing and distribution of branded, value-added consumer items rather
than the commodity fresh meat business. The Company has continually expanded
its product portfolio through organic growth, new product development, and acquisitions.
In June 2008, the Company acquired Boca Grande Foods, Inc. (Boca Grande). Boca
Grande manufactures, sells, and distributes liquid portion products and operates
a facility in Duluth, Georgia.
Internationally, the Company markets its products through Hormel Foods International
Corporation (HFIC), a wholly owned subsidiary. HFIC has a presence in the international
marketplace through joint ventures and placement of personnel in strategic foreign
locations such as Australia, Canada, China, Japan, and the Philippines. HFIC
also has a global presence with minority positions in food companies in Mexico
(Hormel Alimentos, 50% holding) and the Philippines (Purefoods-Hormel, 40% holding),
and in a hog production and processing operation in Vietnam (San Miguel Purefoods
(Vietnam) Co. Ltd., 49% holding).
The Company’s business is reported in five segments: Grocery Products,
Refrigerated Foods, Jennie-O Turkey Store (JOTS), Specialty Foods, and All Other.
Raw Materials
The Company has, for the past several years, been concentrating on processed
branded products for consumers with year-round demand to minimize the seasonal
variation experienced with commodity-type products. Pork continues to be the
primary raw material for Company products. Although the live pork industry has
evolved to large, vertically integrated, year-round confinement operations,
and supply contracts have become prevalent in the industry, there is still a
seasonal variation in the supply of fresh pork materials. The Company’s
expanding line of processed items has reduced, but not eliminated, the sensitivity
of Company results to raw material supply and price fluctuations.
Competition
The production and sale of meat and food products in the United States and internationally
are highly competitive. The Company competes with manufacturers of pork and
turkey products, as well as national and regional producers of other meat and
protein sources, such as beef, chicken, and fish. The Company believes that
its largest domestic competitors for its Refrigerated Foods segment in 2008
were Tyson Foods, Smithfield Foods, and Sara Lee Corporation; for its Grocery
Products segment, ConAgra Foods, Pinnacle Foods, and Campbell Soup Co.; and
for JOTS, Cargill, Inc. and Butterball, LLC.
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