Tyson chicken earnings pop as consumers prioritize protein

Dive Brief:

• Tyson Foods said profits in its chicken segment reached its highest level in eight years as surging consumer appetite for protein pushes up poultry demand.
• The poultry and meat processor on Monday reported its third consecutive quarter of increased earnings, with chicken profits doubling compared to the same period a year earlier. Executives attributed the performance to higher sales in the foodservice sector, along with improved efficiencies in manufacturing.
• Chicken sales have helped Tyson offset challenges in beef and pork. Tight cattle supply and lower pork prices have compressed margins in both segments.

Dive Insight:

Many consumers have turned to chicken not only for its protein benefits, but its lower price point compared to beef.

“While the consumer backdrop remains dynamic, one thing is clear to us,” Donnie King, Tyson CEO and president, said on a Monday earnings call. “Consumers remain focused on prioritizing protein in their diets, recognizing its nutritional benefits and its role in supporting a healthy lifestyle.”

A survey from the International Food Information Council found 71% of consumers looked to increase their protein consumption in 2024, up from 59% in 2022. As protein becomes a bigger priority in the American diet, consumers are looking for more convenient ways to get it. Tyson has expanded its presence in foodservice channels and grown its innovation pipeline in prepared foods in response to demand.

“Both protein and convenience continues to win with consumers and we're the market share leaders there,” Wes Morris, Tyson group president of poultry, said during an analyst call.

Tyson raised guidance for its chicken segment, saying it expects the division to generate $1 billion to $1.3 billion in adjusted operating income for fiscal 2025. Despite challenges in beef, executives said the segment performed better than expected amid an uncertain economic environment.

“We are focused on controlling the controllables and we're also adapting with agility to manage the impacts of tariffs, immigration, and market dynamics,” King said.