Smithfield Foods Inc (NASDAQ: SFD)

Smithfield is an American food company and an industry leader in value added packaged meats and fresh pork with over $14 billion in annual sales. The company employs approximately 34,000 people in the United States and approximately 2,500 in Mexico. It produces and distributes a wide variety of packaged meats and fresh pork products domestically and abroad, maintaining high quality standards through relationships with thousands of U. S. family farmers and blue chip global customers.

Smithfield generates revenue primarily from the sale of its branded and private label packaged meats, fresh pork, and related products. Revenue streams include sales to retail outlets such as grocery supermarkets and club stores, foodservice customers including restaurants and institutions, industrial users that use the products as raw materials, and export markets abroad. Export sales accounted for 13% of total sales for the nine months ended September 29, 2024. The company also earns income from its hog production operations through internal transfers of live hogs to its fresh pork processing facilities.

The company operates through the following segments: Packaged Meats, Fresh Pork, and Hog Production.

• Packaged Meats: This segment produces a wide variety of value added products including bacon, sausage, hot dogs, deli and lunch meats, dry sausage, ham, ready to eat entrees and other prepared foods, which are sold through retail, foodservice, industrial and export channels.

• Fresh Pork: This segment processes hogs into primal, sub primal and offal cuts such as bellies, butts, hams, loins, picnics and ribs, supplying fresh pork to external customers and providing approximately 80% of the Packaged Meats segment’s raw material needs.

• Hog Production: This segment raises hogs on company-owned and contract farms in the United States and Mexico, delivering live hogs to the Fresh Pork segment to support the vertically integrated supply chain.

Smithfield holds a leading position in the U. S. protein market, ranking as the number two branded provider by volume across the 25 key packaged meats categories with an approximate 20% market share, according to Circana. It is also the largest fresh pork processor in the United States with roughly 23% market share, as reported by National Hog Farmer. The company competes with major processors such as Tyson Foods, Hormel Foods, JBS USA and Pilgrim’s Pride, while maintaining competitive advantages through its scale, diversified brand portfolio, integrated supply chain and strong relationships with farmers and customers.

Smithfield serves a diverse customer base that includes national and regional grocery retailers, foodservice chains, industrial users and international buyers. Specific retail customers include Walmart, Sam’s Club, Costco, Kroger and Albertsons; foodservice clients encompass McDonald’s, Subway, IHOP and Jersey Mike’s, supported by distributors such as Sysco, U. S. Foods and Performance Food Group. Walmart alone represented about 12% of the company’s consolidated sales in 2023. The company also exports to markets across North America, Asia, Latin America and other regions.