Hormel Foods Corporation HRL has been benefiting from focus on innovations and effective product launches to boost assortment strength. The company’s wholly-owned subsidiary — Jennie-O Turkey Store — launched a turkey barbacoa innovation to aid foodservice operators.
The completely-cooked turkey barbacoa, seasoned and marinated using paprika, garlic and guajillo chili pepper spices, is an on-trend innovation. The lean turkey protein is popular among people seeking more flavorful and nutritious menu options. The launch gives foodservice operators a nutritious protein alternative, making it easy for them to prep a meal.
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Boosting Assortments: A Key Driver
Hormel Foods is focused on undertaking impressive innovations. Recently, the company introduced Happy Little Plants pepperoni style topping. The innovation is aimed at impressing both plant-lovers as well as pork enthusiasts. Management highlighted that the innovation bodes well amid consumers’ changing preferences to include more plant-based foods in their lifestyle.
In February 2021, the company introduced the Hormel pretzel bites and cheese tray — a new addition to the Hormel Gatherings line. With the introduction of Hormel pretzel bites and cheese tray, the company expects to bring restaurant trends inside consumers’ homes. The launch is appropriate amid increasing home-based working and schooling trend as well as smaller get togethers during the pandemic. In December 2020, it launched plant-based protein puffs under the Happy Little Plants brand line-up. With rising health consciousness, plant-based food alternatives are gaining prominence. This provides opportunities for companies like Hormel Foods to diversify and grow.
The Zacks Rank #2 (Buy) company is benefiting from robust foodservice recovery, elevated retail, deli and international demand as well as better supply-chain performance. Second-quarter fiscal 2021 net sales surpassed the Zacks Consensus Estimate and increased 8% year over year. In its second-quarter call, management stated that e-commerce sales increased in double-digits in the last 12 weeks (according to IRI) and the company is seeing increased share in key categories. We believe that Hormel Foods’ impressive performance along with effective product launches is likely to keep it well placed.
Shares of Hormel Foods have inched down 0.9% so far this year compared with the industry’s growth of 12.2%.
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