Tyson: Its goals immune to trend

Antibiotic dislike called no burden

Tyson Foods will meet its financial goals despite uncertainty over consumer attitudes toward antibiotics, executives said Wednesday.

Speaking at a Consumer Analyst Group of Europe conference in London, Dennis Leatherby, chief financial officer, said Tyson is well-suited to adapt to customer demand regarding how poultry is raised.

"A couple of weeks ago many of you may have seen an announcement by McDonald's about sourcing chicken without antibiotics that are important to human medicine," he said. "We support McDonald's decision, and, in fact, we worked very closely with them on this decision because we were already headed in that direction."

Shares of Tyson Foods have been down more than 7 percent since March 4, the day McDonald's announced a move away from chicken raised with medically important antibiotics. Anti-microbials that aren't used in human medicine, like ionophores, will continue to be allowed by the restaurant chain.

McDonald's is a "top 10" customer for Tyson, and the company has several facilities dedicated to the chain, Leatherby said.

Investors also have sold stock on fears that export markets will dry up because of trade restrictions over the avian flu. The disease was not mentioned during the consumer-focused conference Wednesday.

Some industry watchers say the concern by McDonald's over antibiotics -- which followed outright bans in higher-priced chains like Chipotle and Panera Bread -- represents a fundamental shift in the industry.

"I think the companies are wising up to the fact that consumers don't want this done," said Patty Lovera, assistant director of Washington, D.C.-based Food & Water Watch. "After all, McDonald's made this announcement at a conference about righting the ship."

In October 2014, Tyson stopped using antibiotics at its 35 hatcheries. From 2011 to 2014 the company reduced human-antibiotic use on farms by 84 percent.

Leatherby said on Wednesday that Tyson had stopped using human antibiotics in chicken feed in January. He also mentioned that a Wilkesboro, N.C.-based Tyson brand offers chicken that is raised without any antibiotic use.

"Our size has allowed us to get more involved in the no-antibiotics-ever offering at retail under our Nature Raised Farms [brand]," Leatherby said.

Lovera said that though restaurants have made moves to limit antibiotic use in food production, it's hard to say how much supermarket purchasing habits have changed among consumers.

"It's hard to know," she said. "We don't have the data."

Apart from antibiotic use, Andy Callahan, president of retail packaged brands, said product development at Tyson's innovation centers in Springdale and Downers Grove, Ill., remains strong.

The company will soon release Ball Park beef jerky and a Hillshire snacking line.

"Innovation is the lifeblood of brand growing," Callahan said. "We have a pipeline that is very strong."

Tyson stock was up more than 2 percent on Wednesday.

Business on 03/19/2015

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