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Effective product launches have been helping Hormel Foods Corporation HRL boost assortment strength as well as meet consumers’ altering tastes and preferences. Progressing along these lines, the company introduced its new 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.
Efforts to Boost Plant-Based Products
The Happy Little Plants brand was first introduced by the company in 2019. The brand offers a range of products that help consumers incorporate plant-based protein in their diet. The new protein puffs are likely to enable consumers to follow a convenient and healthy snacking habit.
The company is launching the latest plant-based protein puffs in three distinctive flavors namely; Ranch, Nacho Cheese, and Cinnamon & Sugar. Markedly, the product contains 16 gms of protein per serving. Also they are free from preservatives and gluten. The company highlights that the protein puffs will be available for purchase only on Amazon.com, Inc. AMZN.
Consumers are becoming increasingly aware regarding the benefits of plant-based protein, and Hormel Foods looks well placed to cater to such growing interests. That said, the company’s efforts to expand its plant-based protein products are likely to yield in the forthcoming periods. We note that other food companies such as Tyson Foods Inc. TSN and Beyond Meat, Inc. BYND are also expanding their plant-based protein products offerings.
Focus on Boosting Portfolio Strength & Capacity Expansion
Hormel Foods efforts to develop and launch new products are helping it boost sales. During its fiscal fourth-quarter earnings call, management highlighted that the company achieved its goal of generating 15% of sales from new products that were formed in the last five years. In this context, brands such as Hormel Cup N' Crisp pepperoni, SKIPPY peanut butter squeeze packs, Herdez Salsa Cremosas as well as Happy Little Plants among others have been contributing to the upside.
Further, the company is making strategic advertisement investments to support growth of its brands. Also, the company’s well-chalked acquisitions are boosting its product portfolio strength. In this regard, the buyouts of Sadler's Smokehouse, Columbus, Fontanini and Ceratti are worth mentioning.
Additionally, Hormel Foods is on track with strategic investments for boosting capacity. During fourth-quarter fiscal 2020, the company carried out the Burke pizza toppings plant expansion. Moreover, its facility expansion in Nevada, Iowa will provide additional capacity for pizza toppings. Also, Hormel Foods plans to open its new dry sausage manufacturing unit in Omaha, NE during the first half of 2021. Management also highlighted that it is focusing on expanding the capacity of its pepperoni business.
While Hormel Foods’ retail business continues to remain sturdy, it is witnessing declines in its foodservice business. This can be due to reduced demand from various foodservice venues amid the pandemic. Also, Hormel Foods’ is grappling with escalated costs associated with the pandemic. Shares of this Zacks Rank # 3 (Hold) company have declined 4.4% in the past three months compared with the industry’s rise of 1.8%.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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