The record sales and profits that Hormel Foods reported for the third quarter back in August tell only part of the much larger success story being written by the 122-year-old company’s executive team.
“Among the officer group, the average tenure is 26 years, which is pretty remarkable,” said Julie Craven, Hormel’s vice president of corporate communications. “Our legacy is that people come to work here and stay.”
Far from stifling innovation, at Hormel such longevity promotes innovation, spurs acquisitions and creates a culture of diversity — all overseen by Jeffrey M. Ettinger, the company’s resourceful chairman, president and chief executive officer.
Since assuming the presidency in 2004 and adding the CEO and chairman titles the following year, Ettinger has fostered a company culture based on the three pillars of innovation, diversity/inclusion and corporate responsibility.
“Now that he’s been in his current positions for seven years, he’s hitting his stride, not just talking about these initiatives, but showing results,” said Craven.
Innovation has been one of the most visible wins. Ettinger himself attributed the company’s winning quarter to a portfolio of products that is at once broad — stretching from turkey to pepperoni to microwavable meals — yet focused on supporting the whole.
“The strength of our balanced business model and the vibrancy of our branded value-added portfolio should support continued sales and earnings growth as we close out fiscal 2012,” Ettinger told investors during a third-quarter conference call.
Wall Street has been impressed with Hormel’s ability to increase volumes during an otherwise flat year for most CPG companies. Ettinger said that all five of the company’s divisions registered gains in profit, with total sales topping $2 billion for the quarter, an increase of more than 5% on volume growth of 4%.
“We have a lot of items that are connecting well with consumers overall,” he said to investors.
A Cohesive Workforce
While the products grab the spotlight, the company’s employees make them, and make them better. Ettinger led the creation of the Diversity and Inclusion Council, which seeks to promote an expanding workforce that is balanced and reflects the consumers that buy Hormel products.
“Jeff understands that going forward, success is going to require us to capture all the talent that’s available to us, the strength that diversity gives you,” said Craven.
The council has prompted the company to hire a diversity and inclusion manager and in the past year, a number of employee resource groups. The entire effort is designed to empower employees.
“You can make all the hires you want, but if the culture and the workplace isn’t welcoming, they’re not going to stay,” said Craven.
A cohesive workforce has allowed Hormel to forge deeper relationships with the supermarket channel. In the process, the company has been honored for its collaborative efforts, which, of course, include helping the retailer sell more product. Over the past year, some of the nation’s largest chain food stores have honored Hormel for its marketing prowess, including Wal-Mart Stores (Supplier of the Year), Ahold USA (Fresh Vendor of the Year) and Target (Vendor of the Year for Perishables).
Hormel has also implemented a number of programs that help the community at large. As a food company, Hormel is able to feed millions. It developed Spammy, a vitamin- and mineral-fortified, shelf-stable turkey spread. Currently, it’s in the middle of a three-year commitment to deliver 1 million cans of Spammy to needy families in Central America.
Ettinger himself serves on the boards of Hunger Free Minnesota, the Grocery Manufacturers of America and the company’s own Hormel Foundation, among others.
There is one ongoing challenge that’s just as important to Ettinger (pictured above), though it lacks the charity of the other initiatives. After becoming president, Ettinger and his team created the Billion Dollar Challenge, which set a goal for the company to generate $1 billion in sales from new products by the end of fiscal year 2009. Hormel surpassed that goal two years early, in 2007, reporting total sales of $6.2 billion with more than $1 billion generated in new product sales...
Source: Argentine Beef Packers S.A.
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