Smithfield Foods
Careers at Smithfield Foods
Mission
Smithfield Foods’ mission is to further transform into a world-class consumer packaged goods and protein company—one that consumers feel good about buying from—and a partner of choice for its customers.
Business segments
Smithfield Foods is a provider of fresh and packaged meats. The firm operates five reportable business segments:
- Fresh Pork – Produces a wide variety of fresh pork products in the U.S. and markets them in the U.S. and to several foreign markets, including China, Japan, Mexico, Russia, and Canada.
- Packaged Meats – Produces a wide variety of packaged meat products in the U.S. and markets them primarily in the U.S.
- Hog Production – Operates several hog production facilities.
- International – Produces a wide variety of fresh pork, poultry, and packaged meats products, including cooked hams, sausages, hot dogs, bacon, and canned meats and markets them primarily in Poland, Romania, and the United Kingdom.
- Corporate – Provides management and administrative services to support the other four segments.
History
Joseph Luter and his son Joseph, Jr. were employees of Gwaltney Packing, a pork producer. At a certain point they decided to launch their own meatpacking plant, and raised $10,000 from neighborhood investors. In 1936 they founded the Smithfield Packing Company in Smithfield, Virginia, and opened its headquarters across the street from their old employer.
Luter later died, and in 1962 Joseph, Jr. passed away suddenly from a heart attack. His son Joseph Luter III abandoned law school to run the business. In 1969 he sold it to Liberty Equities for $20 million. He initially remained as a manager but was let go six months later. The new owner expanded through acquisitions of non-pork firms. By the mid-1970s Smithfield was faring poorly financially.
Luter III saw an opportunity to rejoin the company. He offered to buy it back at a fraction of its worth. He then sold its non-pork businesses, radically lowering its debt. He also got rid of several middle managers and reduced data processing costs, enabling him to cut $2 million in overhead and return the firm to profitability in a matter of seven months.
With the company back in good shape, he began growing it again through acquisitions. This activity began with the purchase of Gwaltney in 1981. It continued with the buying of dozens of pork, beef, and livestock companies, many of which were purchased cheaply due to underperformance. In 2013 Smithfield was acquired by Shuanghui Group, the largest meat producer in China.
Business model of Smithfield Foods
Customer Segments
Smithfield Foods has a mass market business model, with no significant differentiation between customer segments. The company targets its offerings at consumers who desire meat products.
Value Proposition
Smithfield Foods offers two primary value propositions: innovation and brand/status.
The company embraces innovation as part of its culture. It maintains a vertically-integrated platform through which it controls all aspects of development, from conception to packing. The system allows it to consistently supply traceable and high-quality raw material. It has also enabled Smithfield to lead in areas such as sow group housing conversion and the production of ractopamine-free pork, which is of major importance for export markets.
The company has established a powerful brand due to its success. It is the world’s largest hog producer and pork processor, raising 15.8 million pigs each year and producing over 2.7 billion pounds of packaged meat and over 3.8 billion pounds of fresh pork annually. It maintains leading products in several packaged meats categories, with prominent brands such as Smithfield, Eckrich, Nathan's Famous, Farmland, Armour, John Morrell, Cook's, Kretschmar, Gwaltney, Curly's, Margherita, Carando, Healthy Ones, Krakus, Morliny, and Berlinki. It employs 50,000 people throughout North America and Europe and generated $14 billion in annual revenue in its most recent fiscal year. It exported products to over 40 countries around the world. Lastly, it has won a number of honors, including the following:
- 91 awards from the North American Meat Institute (NAMI) in 2015
- Recognition as #1 in water management among meat companies by Ceres in 2015
- Recognition as Sustainable Processor of the Year by Food Engineering in 2014
- The Environmental Excellence Silver Award from the Virginia Department of Environmental Quality for its Smithfield North facility (2013)
- Recognition as a Best of Sustainable Supply Chain winner by McDonald’s (2012)
Channels
Smithfield Foods’ main channels are regional and national supermarket chains, wholesale distributors, the foodservice industry (fast food, restaurant and hotel chains, hospitals, and other institutional customers), export markets, and other processors.
The company promotes its offerings through its website, social media pages, advertising, sports sponsorships, sales incentives such as rebates, and trade promotion programs.
Customer Relationships
Smithfield Foods’ customer relationship is primarily of a self-service nature. Customers use its products while having limited interactions with employees.
Key Activities
Smithfield Food’s business model entails manufacturing its products for its customers.
Key Partners
Smithfield Foods’ key partners are the suppliers that provide it with the raw materials it needs to manufacture its products. Its most common materials are feed grains, including corn, wheat, and soybean meal. It also purchases live hogs for its Fresh Pork segment.
Key Resources
Smithfield Foods’ main resources are its physical resources, which include farms, manufacturing facilities, and distribution centers across North America and Europe. It processes its hogs at nine plants (three in the Southeast U.S. and six in the Midwest).
Cost Structure
Smithfield Foods has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is cost of sales, a variable expense. Other major drivers are in the areas of sales/marketing and administration, both fixed costs.
Revenue Streams
Smithfield Foods has one revenue stream: revenues it generates from sales of its products to its customers.
