Tyson Foods, Inc. (A)
2003 | Case No. M304(A)
Don Tyson, the “king of chicken,” was thinking about fish. As president of Tyson Foods, he had taken Tyson from a small family-owned company to number 110 on the Fortune 500. His relentless work helped move chicken ahead of beef on America’s dinner plate and, by 1994, Tyson Foods had $5.2 billion in sales. It sold 6000 products in 57 countries and had the number one market share for chicken in the United States. Tyson liked to boast, “we’re the largest chicken folks in the world.” Tyson’s production of chicken exceeded all the producers in California, which turned out 250 million birds annually. It processed more chicken than either China or Brazil. Fish presented an opportunity for Tyson. Fishing was a mom-and-pop industry with no outstanding market leader and lacked a major distribution system to move fish through stores to consumers. Tyson Foods had previously solved similar problems in the chicken industry. The company had tremendous experience in enhancing the value of commodity products, was known for helping restaurants develop new menu offerings, and had a strong nationwide distribution network. In 1992, Tyson Foods was considering acquiring Arctic Alaska, a vertically integrated fish processor. Arctic’s thirty-one Pacific Ocean based trawlers caught bottom-fish (i.e., cod and pollack) and crab, which were processed into surimi and fillets for foodservice customers. Domestic customers included SYSCO, Kraft Foodservice, Red Lobster, and Louis Kemp retail seafood—many of Tyson’s customers. The acquisition would be another step toward Tyson’s goal of being the premier “center of the plate” protein provider, but the question was whether Tyson Foods would be able to replicate its chicken success with fish.
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