Tyson Foods 2014 Annual Report Download - page 7

RESEARCH AND DEVELOPMENT
We conduct continuous research and development activities to improve product development, to automate manual processes in our processing
plants and growout operations, and to improve chicken breeding stock. Our Discovery Center includes 19 research kitchens and a USDA-
inspected pilot plant. The Discovery Center enables us to bring new market-
leading retail and foodservice products to the customer quickly and
efficiently. We also lease an approximately 73,000 square foot research and development facility outside Chicago, Illinois assumed in our
Hillshire Brands acquisition. Research and development costs totaled $52 million , $50 million , and $43 million in fiscal 2014 , 2013 and
2012 , respectively.
ENVIRONMENTAL REGULATION AND FOOD SAFETY
Our facilities for processing chicken, beef, pork, turkey and prepared foods, milling feed and housing live chickens and swine are subject to a
variety of international, federal, state and local environmental laws and regulations, which include provisions relating to the discharge of
materials into the environment and generally provide for protection of the environment. We believe we are in substantial compliance with such
applicable laws and regulations and are not aware of any violations of such laws and regulations likely to result in material penalties or material
increases in compliance costs. The cost of compliance with such laws and regulations has not had a material adverse effect on our capital
expenditures, earnings or competitive position, and except as described below, is not anticipated to have a material adverse effect in the future.
Congress and the United States Environmental Protection Agency are considering various options to control greenhouse gas emissions. It is
unclear at this time when or if such options will be finalized, or what the final form may be. Due to the uncertainty surrounding this issue, it is
premature to speculate on the specific nature of impacts that imposition of greenhouse gas emission controls would have on us, and whether
such impacts would have a material adverse effect.
We work to ensure our products meet high standards of food safety and quality. In addition to our own internal Food Safety and Quality
Assurance oversight and review, our chicken, beef, pork and prepared foods products are subject to inspection prior to distribution, primarily
by the United States Department of Agriculture (USDA) and the United States Food and Drug Administration (FDA). We are also participants
in the United States Hazard Analysis Critical Control Point (HACCP) program and are subject to the Sanitation Standard Operating Procedures
and the Public Health Security and Bioterrorism Preparedness and Response Act of 2002. Additionally, our International operation is subject to
various other food safety and quality assurance oversight and review.
EMPLOYEES AND LABOR RELATIONS
As of September 27, 2014 , we employed approximately 124,000 employees. Approximately 108,000 employees were employed in the United
States and 16,000 employees were in foreign countries, primarily Brazil, China and Mexico. Approximately 32,000 employees in the United
States were subject to collective bargaining agreements with various labor unions, with approximately 18% of those employees included under
agreements expiring in fiscal 2015 . The remaining agreements expire over the next several years. Approximately 10,000 employees in foreign
countries were subject to collective bargaining agreements. We believe our overall relations with our workforce are good.
MARKETING AND DISTRIBUTION
Our principal marketing objective is to be the primary provider of chicken, beef, pork and prepared foods products for our customers and
consumers. We build the Tyson®, Jimmy Dean®, Hillshire Farm®, Sara Lee® frozen bakery, Ball Park®, Wright®, Aidells® and State Fair®
brands while supporting strong regional and emerging brands primarily through well-defined product-specific advertising, marketing, and
public relations efforts focused toward key consumer targets with specific needs. We identify distinct markets and business opportunities
through continuous consumer and market research. These efforts are designed to present key products as everyday solutions to relevant
consumer problems; thereby becoming part of regular eating routines. We utilize our national distribution system and customer support
services to achieve the leading market position for our products.
We have the ability to produce and ship fresh, frozen and refrigerated products worldwide. Domestically, our distribution system extends to a
broad network of food distributors and is supported by our owned or leased cold storage warehouses, public cold storage facilities and our
transportation system. Our distribution centers accumulate fresh and frozen products so we can fill and consolidate partial-
truckload orders into
full truckloads, thereby decreasing shipping costs while increasing customer service. In addition, we provide our customers a wide selection of
products that do not require large volume orders. Our distribution system enables us to supply large or small quantities of products to meet
customer requirements anywhere in the continental United States. Internationally, we utilize both rail and truck refrigerated transportation to
domestic ports, where consolidations take place to transport to foreign destinations.
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