Hormel Foods Named 2008 Food Processor of the Year

Continuity, the chairman/CEO says, is more of a theme than change. Nevertheless, Ettinger issued a “billion-dollar challenge” to employees when he became president in 2005. The new exec wanted $1 billion of sales to come from new (introduced since 2000) products by 2009. The company declared victory two years early, in 2007.

Now the goal is to double that, to reach $2 billion in new product sales – including those introduced since 2000 — by 2012.

“This is not a fad company,” says Phil Minerich, vice president of research and development. “We do a lot of consumer research and try to follow trends, but we’re in this for the long haul. We’re talking about some products that have been around for 60 and 70 years – products and brands that people can count on.”

There’s also talk of Hormel’s “balanced model.” The company is a blend of commodity meats and value-added brands, of raw animal protein and packaged foods, of foodservice and retail products. “Our balanced model is designed to create value under most market conditions,” Ettinger says. The market conditions in 2008 were certainly a challenge.

Nevertheless, there were star performers. Compleats, the microwave-ready, shelf-stable entrees, saw sales grow by double-digits in 2008. The original line (items such as Beef Steak Tips, Chicken Breast & Gravy and Lasagna) were complemented by a green-packaged healthier line in 2008 (the line meets the USDA’s definition of healthy in regard to calories, sodium, protein and fiber).

Ettinger called the Natural Choice line of sandwich and deli meats his “rookie of the year” in 2007. Hormel’s HPP technology, which kills listeria and other pathogens with water pressure, not heat, allows the line to be produced with no preservatives and no artificial ingredients. The company claims it’s the first nationally available line of natural meats.

And don’t forget SPAM. The canned ham product, which celebrated its 70th birthday in 2007, maintains steady sales in the states but is experiencing double-digit growth internationally in Canada, Japan, Philippines and South Korea. While two domestic plants — Austin, Minn. and Fremont, Neb. — make SPAM, three foreign plants (in Denmark, South Korea and the Philippines) are needed to support the rest of the world. SPAM is sold in nearly 50 nations, from Andorra to Zimbabwe. And it’s seen its share of line extensions, from Lite and Less Sodium to Hot & Spicy or SPAM with Garlic or Black Pepper. It’s available in Singles, too.

Despite the wildly varying crises of the past year, Hormel has weathered them well, says Ettinger. “We’ve had a very strong year in terms of sales. All our business segments are up between 5 and 10 percent, international even more.”

As for the future, Ettinger expresses an interest in more ready meals, including both shelf-stable ones like Compleats and refrigerated ones. The future apparently holds more of the same for Hormel: balancing tradition with innovation.