Tyson Foods, Inc. (TSN): Business Model Canvas [10-2024 Updated]

Explore the dynamic business model of Tyson Foods, Inc. (TSN), a leader in the protein industry. This comprehensive overview delves into the company's key partnerships, activities, and resources, illustrating how Tyson delivers high-quality products while maintaining a commitment to sustainability. Discover how their diverse customer segments and innovative revenue streams position them for continued success in a competitive market.

Tyson Foods, Inc. (TSN) - Business Model: Key Partnerships

Collaborations with livestock suppliers

Tyson Foods collaborates extensively with livestock suppliers to ensure a consistent supply of high-quality meat products. In fiscal 2024, Tyson reported significant costs associated with livestock procurement, with total livestock costs reaching approximately $4.7 billion across all segments. This figure reflects a strategic focus on maintaining strong relationships with suppliers to secure premium livestock at competitive prices.

Partnerships with food retailers and distributors

Tyson Foods has established robust partnerships with major food retailers and distributors, facilitating extensive distribution channels. In the first nine months of fiscal 2024, Tyson's sales to retail customers amounted to $18.2 billion, representing a 2.1% increase compared to the previous year. Key retail partners include Walmart, Kroger, and Costco, which collectively account for over 30% of Tyson's total sales. The company also engages with foodservice distributors, driving additional sales of approximately $11.8 billion during the same period.

Partnership Type	Sales (in millions)	Percentage of Total Sales
Retail	$18,228	45.9%
Foodservice	$11,814	29.7%
International	$5,661	14.2%
Industrial and Other	$4,041	10.2%

Alliances with agricultural producers

Tyson Foods maintains strategic alliances with agricultural producers to enhance supply chain efficiency and sustainability. These partnerships focus on sustainable farming practices and animal welfare, aligning with consumer trends towards ethically sourced products. In fiscal 2024, Tyson invested approximately $1.2 billion in sustainability initiatives, including collaborations with agricultural producers to promote responsible farming techniques. This investment underscores Tyson's commitment to improving its supply chain while ensuring the quality and safety of its products.

Tyson Foods, Inc. (TSN) - Business Model: Key Activities

Processing of beef, pork, and chicken

Tyson Foods processes a significant volume of beef, pork, and chicken, which are core components of its business model. For the three months ended June 29, 2024, Tyson reported:

Segment	Sales (in millions)	Operating Income (Loss) (in millions)
Beef	$5,241	($69)
Pork	$1,462	($62)
Chicken	$4,076	$244

In total, the sales from beef, pork, and chicken segments amounted to approximately $10,779 million for the quarter. The operating income for the chicken segment showed a positive trend, contrasting with losses in the beef and pork segments, largely attributed to increased operational costs and market pressures.

Manufacturing prepared food products

Tyson Foods also focuses on manufacturing prepared food products, which include items such as ready-to-eat meals, snacks, and other processed foods. For the three months ended June 29, 2024, the prepared foods segment generated:

Sales (in millions)	Operating Income (in millions)
$2,432	$203

This segment has seen consistent growth, with a slight increase in sales compared to the previous year, driven by enhanced product offerings and marketing strategies.

Supply chain management and logistics

Effective supply chain management is critical to Tyson Foods’ operations, enabling the company to efficiently manage its logistics and distribution networks. The company reported total sales of $13,353 million for the three months ended June 29, 2024. Cost of sales was approximately $12,475 million, reflecting a cost of sales as a percentage of total sales at 93.4%.

Tyson's supply chain activities include:

• Optimizing transportation routes to reduce costs
• Investing in technology for better inventory management
• Collaborating with suppliers to ensure quality and sustainability of raw materials

For the nine months ended June 29, 2024, the company reported total operating income of $884 million, reflecting a significant rebound from previous periods, supported by improved efficiencies in supply chain operations.

Tyson Foods, Inc. (TSN) - Business Model: Key Resources

Extensive processing facilities

Tyson Foods operates a robust network of processing facilities that are crucial to its production capabilities. As of June 29, 2024, the company reported a total of $884 million in capital expenditures for property, plant, and equipment, which reflects ongoing investments to enhance production growth, safety, and operational efficiencies.

Strong brand portfolio (e.g., Jimmy Dean, Hillshire Farm)

Tyson Foods boasts a diverse and strong portfolio of brands, including well-known names like Jimmy Dean and Hillshire Farm. The company achieved total sales of $39.744 billion for the nine months ended June 29, 2024, with significant contributions from its branded products. The breakdown of sales by segment reveals:

Segment	Sales (in millions)
Beef	$15,218
Pork	$4,465
Chicken	$12,174
Prepared Foods	$7,379
International/Other	$1,744
Total	$39,744

Skilled workforce and operational expertise

Tyson Foods relies on a skilled workforce that is essential for maintaining operational expertise across its various production segments. The company reported an operating income of $884 million for the nine months ended June 29, 2024, compared to an operating income of $68 million for the same period in the previous year. This improvement is attributed to enhanced operational efficiencies and effective workforce management.

The company's effective tax rate for the nine months ended June 29, 2024, was 25.9%, reflecting the financial health and operational stability of the organization.

Tyson Foods, Inc. (TSN) - Business Model: Value Propositions

High-quality protein products

Tyson Foods, Inc. (TSN) is a leading protein producer, generating substantial sales across its various segments. In the third quarter of fiscal 2024, Tyson reported:

• Total sales of $13.4 billion, a 1.6% increase compared to the same quarter in fiscal 2023.
• Beef sales of $5.2 billion, representing a 4.4% increase in sales volume.
• Pork sales of $1.5 billion, with a 12.6% increase in average sales price.
• Chicken sales of $4.1 billion, despite a decline in sales volume of 0.4%.
• Prepared Foods segment sales of $2.4 billion, up by 2.0% in sales volume.

Diverse range of food offerings

Tyson Foods offers a diverse portfolio of products catering to various consumer needs. The breakdown of sales by segment for the first nine months of fiscal 2024 is as follows:

Segment	Sales (in millions)	Operating Income (Loss) (in millions)
Beef	$15,218	($310)
Pork	$4,465	($24)
Chicken	$12,174	$579
Prepared Foods	$7,379	$676
International/Other	$1,744	($37)
Total	$39,744	$884

Commitment to sustainability and animal welfare

Tyson Foods has made significant strides in sustainability and animal welfare. Key initiatives include:

• Investing between $1.2 billion and $1.3 billion in capital expenditures for fiscal 2024, focusing on production growth and sustainability.
• Reduction of feed ingredient costs by approximately $305 million in the Chicken segment due to improved sourcing practices.
• Active engagement in animal welfare programs, which include audits and adherence to welfare standards, demonstrating a commitment to ethical practices.

As of June 29, 2024, Tyson Foods holds a current ratio of 1.8, indicating strong liquidity to support its operational and sustainability commitments.

Tyson Foods, Inc. (TSN) - Business Model: Customer Relationships

Direct engagement with retail and foodservice customers

Tyson Foods maintains a robust direct engagement strategy with its retail and foodservice customers, generating significant sales across various segments. For the three months ended June 29, 2024, Tyson's external sales were segmented as follows:

Segment	Retail Sales (in millions)	Foodservice Sales (in millions)	Total Sales (in millions)
Beef	$2,566	$1,318	$5,241
Pork	$464	$141	$1,462
Chicken	$1,720	$1,567	$4,076
Prepared Foods	$1,434	$876	$2,432
International/Other	$0	$0	$582
Total	$6,184	$3,902	$13,353

Tyson's direct engagement strategy includes maintaining close relationships with grocery retailers, food service distributors, restaurant operators, and other commercial entities, which has proven critical for driving sales and ensuring customer loyalty.

Loyalty programs and promotions

Tyson Foods actively implements loyalty programs and promotional strategies aimed at enhancing customer retention and engagement. The company utilizes various promotional campaigns across its product lines, which include discounts, bundled offers, and seasonal promotions. For example, Tyson's Prepared Foods segment reported a slight increase in sales volume of 2.0% for the three months ended June 29, 2024, which can be attributed to effective promotional strategies that resonate with consumers.

In the nine months ended June 29, 2024, Tyson's sales in the Prepared Foods segment reached $7,379 million, reflecting a marginal increase compared to the previous year. The company continues to invest in marketing and promotional activities that strengthen brand loyalty and enhance customer experience, thereby driving repeat purchases.

Customer service support for product inquiries

Tyson Foods emphasizes comprehensive customer service support to address product inquiries and concerns. The company has established multiple channels for customer engagement, including phone support, online chat, and email communication. This support is vital for addressing consumer inquiries related to product quality, safety, and nutritional information.

As of June 29, 2024, Tyson Foods reported a net income attributable to the company of $191 million for the third quarter, demonstrating a recovery in financial performance, which is partly due to improved customer satisfaction and engagement efforts. The effective management of customer service inquiries contributes to maintaining Tyson's reputation as a reliable supplier in the protein market.

Tyson Foods, Inc. (TSN) - Business Model: Channels

Retail grocery stores

In the third quarter of fiscal 2024, Tyson Foods generated $6,184 million in sales through retail channels. This represented a substantial portion of its overall revenue, highlighting the importance of grocery partnerships in its distribution strategy. The retail sector accounted for 46.3% of total external sales during this period.

Segment	Retail Sales (in millions)	Change from Previous Year
Beef	$2,566	+11% from Q3 FY 2023
Pork	$464	+17.7% from Q3 FY 2023
Chicken	$1,720	-5.6% from Q3 FY 2023
Prepared Foods	$1,434	+2.7% from Q3 FY 2023

Foodservice distributors

Tyson Foods also leverages foodservice distributors to reach restaurants, hotels, and other food establishments. In Q3 FY 2024, foodservice sales totaled $3,902 million. This channel represented 29.2% of Tyson's total external sales, demonstrating its critical role in the broader food supply chain.

Segment	Foodservice Sales (in millions)	Change from Previous Year
Beef	$1,318	+4.8% from Q3 FY 2023
Pork	$141	+12.8% from Q3 FY 2023
Chicken	$1,567	-4.2% from Q3 FY 2023
Prepared Foods	$876	-2.4% from Q3 FY 2023

Online platforms for direct sales

In recent years, Tyson Foods has expanded its online presence, facilitating direct sales through e-commerce platforms. While specific revenue figures from online sales were not disclosed, the growing trend towards digital shopping is evident, particularly following the pandemic. The company is investing in its digital infrastructure to enhance customer engagement and streamline online orders.

Overall, Tyson Foods' channels of distribution reflect a balanced approach, combining traditional retail, foodservice, and emerging online platforms to effectively reach diverse consumer segments.

Tyson Foods, Inc. (TSN) - Business Model: Customer Segments

Retail consumers

Tyson Foods serves retail consumers through various channels, offering a wide range of protein products such as beef, pork, chicken, and prepared foods. In the third quarter of fiscal 2024, retail sales amounted to approximately $6.2 billion, representing a significant portion of the company's total revenue.

Segment	Sales (in millions)
Beef	$2,566
Pork	$464
Chicken	$1,720
Prepared Foods	$1,434
Total Retail Sales	$6,184

Foodservice operators (restaurants, schools)

Tyson Foods also targets foodservice operators, including restaurants and schools, providing them with bulk protein products and prepared meals. Foodservice sales in the third quarter of fiscal 2024 were approximately $3.9 billion, reflecting the company's strong presence in this market segment.

Segment	Sales (in millions)
Beef	$1,318
Pork	$141
Chicken	$1,567
Prepared Foods	$876
Total Foodservice Sales	$3,902

International markets

Internationally, Tyson Foods engages in various markets, distributing its products to consumers and foodservice operators outside the United States. In the third quarter of fiscal 2024, international sales reached approximately $1.9 billion.

Segment	Sales (in millions)
Beef	$707
Pork	$322
Chicken	$256
Prepared Foods	$58
Total International Sales	$1,925

Tyson Foods, Inc. (TSN) - Business Model: Cost Structure

Raw Material Costs (Livestock and Feed)

In fiscal 2024, Tyson Foods reported a cost of sales of $37.177 billion for the first nine months, with raw material costs significantly influencing this figure. The decrease in input costs per pound contributed to a reduction of approximately $133 million in the overall cost of sales. Specifically, the Chicken segment saw a decrease of about $665 million due to reduced feed ingredient costs.

Operational Expenses (Labor, Utilities)

For the first nine months of fiscal 2024, Tyson Foods incurred selling, general, and administrative expenses amounting to $1.683 billion, representing 4.2% of sales. This includes a notable increase in team member costs, which rose by $51 million, largely attributed to performance-based compensation.

Marketing and Distribution Expenses

Tyson's marketing, advertising, and promotion expenses decreased by $45 million during the third quarter of fiscal 2024 compared to the same period in the previous year. The total selling, general, and administrative expenses for the third quarter were $537 million, which reflects a decrease from $579 million in the prior year.

Cost Category	Q3 FY2024 (in millions)	Q3 FY2023 (in millions)	9 Months FY2024 (in millions)	9 Months FY2023 (in millions)
Cost of Sales	12,475	12,463	37,177	37,361
Selling, General, and Administrative	537	579	1,683	1,656
Marketing and Promotion Expenses	Not disclosed	Not disclosed	Decrease of 45	Not disclosed

Additionally, Tyson's operational strategies have led to increased efficiency, which is anticipated to further reduce costs in the long term. The company expects total capital expenditures between $1.2 billion and $1.3 billion for fiscal 2024.

Tyson Foods, Inc. (TSN) - Business Model: Revenue Streams

Sales from Beef, Pork, and Chicken Products

For the third quarter of fiscal 2024, Tyson Foods reported sales of:

Segment	Sales (in millions)	Change from Q3 2023 (in millions)
Beef	$5,241	$285
Pork	$1,462	$138
Chicken	$4,076	$(136)

In the first nine months of fiscal 2024, the sales figures were:

Segment	Sales (in millions)	Change from 2023 (in millions)
Beef	$15,218	$922
Pork	$4,465	$191
Chicken	$12,174	$(731)

Revenue from Prepared Food Items

In the third quarter of fiscal 2024, sales from prepared foods amounted to:

Sales (in millions)	Change from Q3 2023 (in millions)
$2,432	$49

For the first nine months of fiscal 2024, prepared foods sales were:

Sales (in millions)	Change from 2023 (in millions)
$7,379	$36

International Sales and Exports

In the third quarter of fiscal 2024, international sales were reported at:

Sales (in millions)	Change from Q3 2023 (in millions)
$582	$(51)

For the first nine months of fiscal 2024, international sales totaled:

Sales (in millions)	Change from 2023 (in millions)
$1,744	$(135)

Total sales for Tyson Foods in the third quarter of fiscal 2024 reached:

Total Sales (in millions)	Change from Q3 2023 (in millions)
$13,353	$213

In the first nine months of fiscal 2024, total sales were:

Total Sales (in millions)	Change from 2023 (in millions)
$39,744	$211