Hormel Foods 2015 Annual Report Download - page 4

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Applegate acquisition In May, we announced the
acquisition of Applegate Farms, LLC, the nation’s leading
branded natural and organic meat company. This acquisi-
tion provides our Refrigerated Foods segment a meaningful
entrance into the high-growth natural and organic space.
The Applegate® brand allows us to expand the breadth of our
protein offerings to provide more choice, delivering on
many of the nutritious and holistic attributes desired by a
growing number of consumers.
Dividends 2016 will mark the 50th consecutive year we
have increased our annual dividend, an achievement
matched by few other companies. Effective in the new
fi scal year, the dividend will be $1.16 per share, up from
$1.00 per share in 2015, a 16 percent increase.
Corporate responsibility During fi scal year 2015, we
remained committed to being a leading corporate citizen in
our industry. We were honored to be recognized for our
work, such as being named one of the 100 Best Corporate
Citizens by Corporate Responsibility Magazine for the
seventh consecutive year, one of the Best Companies to Sell
For by Selling Power magazine, and one of the Best Places
to Work for Recent Grads by Symplicity.
We made notable progress toward our 2020 environmental
goals, and also worked on several sodium reduction and
clean label initiatives to continue to offer products that
meet emerging consumer trends.
We contributed approximately $7 million in cash and
product donations to our philanthropic focus areas of
hunger, education, and supporting the local communities
where we operate. We supported hunger relief organiza-
tions in more than 30 communities where we have manu-
facturing locations and donated 2.4 million cans of
Spammy®
shelf-stable poultry product that is fortifi ed with
vitamins and minerals to help prevent childhood malnutri-
tion in Guatemala. A number of our employees and their
family members made the trip to Guatemala to personally
help with Project Spammy operations.
Board member and senior management changes
In October, the company announced the election of James P.
Snee, 48, to the position of president and chief operating
offi cer. Jim was also appointed to the Hormel Foods Board
of Directors. Jim served most recently as a Hormel Foods
group vice president and president of Hormel Foods
International. Jim’s vast experience in both our core
businesses and our emerging growth markets internation-
ally, along with his history of strong leadership, position
him exceptionally well to take on these additional
responsibilities.
As a result of Jim’s advancement, several senior leaders
moved to new positions in October. Larry L. Vorpahl
assumed the position of group vice president and president
of Hormel Foods International. Deanna T. Brady was
appointed to the position of group vice president and
president of consumer product sales. Jeffrey R. Baker
advanced to group vice president, foodservice, and David F.
Weber was promoted to vice president, foodservice marketing.
In March, the company announced the retirement of two
employees with distinguished careers. Julie H. Craven,
vice president, corporate communications, announced her
retirement after many years of supporting and expanding
the company’s communications platform. Wendy A.
Watkins joined Hormel Foods as vice president, corporate
communications, bringing a wealth of industry knowledge
to the role. Joe C. Swedberg, vice president, legislative
affairs, announced his retirement following a successful
career of leadership in legislative affairs, sales, and
marketing. Jeffrey A. Grev advanced to vice president,
legislative affairs.
Outlook We have great momentum heading into fi scal
2016 and should enjoy renewed revenue growth as the year
proceeds. We expect lower input costs to provide a
benefi t for our Grocery Products and Refrigerated Foods
value-added businesses, offsetting modestly lower pork
operating margins. We look for Jennie-O Turkey Store
results to return to normalized levels in the back half of
fi scal 2016, but remain pressured in the early part of the
year as we continue to rebuild our turkey supply chain.
Specialty Foods should deliver increases through the
growth of its Muscle Milk® protein nutrition products, and
we expect International to achieve year-over-year improved
results through the expansion of our business in China
along with increased sales of our SPAM® and SKIPPY®
families of products. Our strong balance sheet positions
us to drive strategic growth through both acquisitions and
internal investments.
Our experienced employees in each of the business seg-
ments are a key factor to the consistently strong results
delivered by Hormel Foods. Our team remains dedicated to
our company’s long legacy of innovation and continuous
improvement, allowing us to provide foods that fi t today’s
lifestyles, interests, and tastes as we address the ever-
changing needs of consumers. We will celebrate the 125th
anniversary of the company in 2016, and with the great
brands and team members we have in place, I believe we
are well positioned for future success in the years to come.
Jeffrey M. Ettinger
Chairman of the Board
and Chief Executive Offi cer