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Diving overview:
- Hormel Foods is selling its entire new turkey business to Life-Science Innovations for an undisclosed sum but will retain the Jennie-O brand.
- LSI acquires Hormel’s production facility, feed mill and associated transportation assets in Minnesota. It also plans to enter into a farmer supply agreement and provide co-manufacturing services to Hormel through the end of fiscal 2026.
- The transaction, expected to close by the end of Hormel’s second quarter, includes assets related to turkey hens, a bird used for Thanksgiving. President John Ghingo said the sale is “an important next step in our evolution” that focuses the turkey portfolio on value-added products such as lunch meat.
Dive Insights:
Hormel is scaling back its presence in Turkey as it faces headwinds including falling demand and avian flu, which has killed tens of thousands of birds and increased costs for meat producers since 2022.
Whole turkey prices continue to rise as avian flu limits production. However, due to reduced demand, many companies have held off on passing these costs on to consumers. 2025 Thanksgiving turkey prices have been lowered for consumers due to discounts, with more shoppers choosing chicken or other proteins as the star of their holiday meals.
Leaving the entire turkey business will allow Hormel to focus on growing profitable areas within that segment, including foodservice and value-added. Hormel will retain its tom turkey, a bird used in products such as lean ground turkey, turkey burgers or deli meats.
Ghingo said Jennie-O is the No. 1 brand in the retail ground turkey category and the company will continue to pursue opportunities in this space as protein demand grows.
“We are moving away from business segments that are more product-oriented, more volatile and less tied to consumer demand and trends,” Ginkgo told analysts at the Consumer Analyst Group conference in New York this week.
Other meat producers have also sold agricultural assets to reduce exposure to volatile commodity markets. Pork giant Smithfield has sold off pigs and renegotiated contracts with farmers as it also focuses on lunch meat and value-added products.
