Tyson Foods officials announced last week that the Springdale, Ark.-based company is planning to sell off some of its “non-protein” brands.
In a statement, Tyson explained that, “As the company focuses on its growth and value creation, it is exploring the sales of its Sara Lee Frozen Bakery business, Kettle business and Van’s … to sharpen its focus on core businesses and expand its protein leadership position in retail and food service.”
I love this corporate-speak.
When a large organization that dominates a certain business sector buys up a company that operates outside of that sector, the firm’s PR machine spits out a release that lauds the acquisition as “important for our growth” and “accretive to earnings,” and lapses into what reads like poetic verse about “synergies” and “strategies” and “service to shareholders.”
Don’t worry, the company tells the investment community. We’re spending billions, but it’s all good, and it’s totally part of a master plan that will pay off handsomely for anyone smart enough to buy up our stock.
Then, when those acquisitions turn out to be problematic, either from a management standpoint or because earnings didn’t keep pace with the overly optimistic projections, investors get treated to a statement insisting that, “We need to build our core business. That’s what we do best, and that’s where our future growth can be best sustained.”
In other words, when we shell out billions to buy up a company in another sector, trust us: We know what we’re doing. We have to expand our portfolio beyond our primary business to assure our future profitability.
But when it’s time to unload one or more of those previous acquisitions, the message is quite the opposite: We need to maintain our focus, to stay with what we know, strengthen the core operations essential to our profitability.
I guess it’s unrealistic to expect corporate executives to admit something along the lines of, “Okay, we thought we’d be raking it in when we bought up these businesses. Win some, lose some, and now it’s time to unload these losers.”
Scratch That Report
Instead, you get this: “Through our ongoing strategic planning process, we’re continuously looking at ways to maximize the effectiveness and growth potential of our protein-based portfolio of products,” Tom Hayes, Tyson Foods president and CEO, said in a statement.
And now we know why Tyson was “exploring” the sale of Sara Lee, et al.
Just two days after its “we’re-focusing-on-our-protein-portfolio” declaration, the company announced a “surprising agreement,” according to investment analysts, to acquire AdvancePierre Foods for $40.25 a share, a deal worth $4.1 billion.
Cincinnati-based AdvancePierre Foods, which was formed when foodservice supplier Pierre Foods acquired its largest competitor, Advance Food Company, a few years ago, calls itself “a leading producer and distributor of value-added, convenient, ready-to-eat sandwiches, sandwich components and other entrées and snacks to … foodservice, retail and convenience store providers.”
Ironically, AdvancePierre Foods spent a good deal of space in its 2016 annual report bragging about its intentions to “expand our market leading position in growing channels and categories” and “acquire value-enhancing businesses” that would enhance the firm’s top and bottom lines.
“Our commitment to driving growth through acquisitions remains strong,” the key executives stated in the report. “Less than three months after going public, we expanded our high-growth, high-margin sandwich and sandwich component portfolio with the acquisition of Allied Specialty Foods … strengthening our leadership position in raw Philly steak while providing us entry into the fully cooked offering.”
(As a side note, while I understand the strategic outcome, I’m not sure that “leadership in raw Philly steak” is the right phrasing to excite Wall Street types sitting around in some business tower crunching numbers on a spreadsheet).
Turns out, when the price is right, even a $1.5 billion dollar company like AdvancePierre Foods is happy to leave the “leadership positioning” to someone else.
Look, this is no knock on Tyson Foods. The company has experienced impressive growth over several decades, and not just by buying up competitors — uh, excuse me … “acquiring synergistic partners.” Plenty of other meat and poultry companies have tried to follow their blueprint and haven’t enjoyed near the success.
Tyson’s doing a lot of things right.
However, it’s impossible not to notice the similarities between corporate-ese and political-speak, and in either case, the truth lies not so much in the words, but rather in the actions.
Enjoy the wordsmithing of executives’ and politicians’ quotes and tweets.
But pay attention to what they do, not what they say.
The opinions in this commentary are those of Dan Murphy, a veteran journalist and commentator.