In 2016, when Jim Snee took over as CEO of US-based Hormel Foods, the company has also adopted a new positioning as a ‘Global Branded Food Company’ with the goal of accelerating the group’s international sales business. However, fast forward to 2023, Hormel Foods now sells to more than 80 countries however international market only contributed 6% to its overall sales revenue.
The bottomline is that the growth was rather tepid and this was mainly attributed to COVID-19 pandemic and bird flu outbreaks affecting sales. Sales in Hormel’s largest overseas market, China is still struggling to recover as the country is the last to open up for international trade and travel after the pandemic.
Although this could just be temporary before growth starts to pick up again, Hormel usually saw a better 2nd half of the year in terms of sales for its international business in the past few years.
Hormel Foods however has reported some major achievements in international markets despite the lacklustre results. Skippy is now the No. 1 peanut butter in Mexico and the Philippines. Sales in Brazil remain elevated while Planters sales are bouncing back. Meanwhile, early this year Hormel confirmed its US$400 million investment in Indonesia with a 29% stake in Garudafood, the country’s leading snack food producer. Garudafood is not expected to boost the company’s bottom line anytime soon.
Despite international sales contributing only 6% to its overall revenue, it will continue to remain as part of Hormel’s core tenet or identity.