Speaker 1:
From the library of the New York Stock Exchange, at the corner of Wall and Broad Streets in New York City, you're Inside the ICE House, our podcast from Intercontinental Exchange on markets, leadership, and vision, and global business, the dream drivers that have made the NYSE an indispensable institution of global growth for over 225 years. Each week, we feature stories of those who hatch plans, create jobs and harness the engine of capitalism, right here, right now at the NYSE, and at ICE's 12 exchanges, and six clearing houses around the world. And now, welcome, Inside the ICE House. Here's your host, Josh King of Intercontinental Exchange.
Josh King:
The idea that a company must remain innovative, lest they become part of the backwash of progress is a topic we've talked about many times on this podcast. A recent study from PricewaterhouseCoopers found that 97% of CEOs think that innovation should be a company's top priority. But, unfortunately for them, 94% of those same CEOs think their company is failing on that score. Clearly, despite capital investments, focus and gleaming laboratories, successful innovation and imagination remains hard to come by.
Josh King:
The topic of today's show is how one company, one of the oldest 200 companies trading on the New York Stock Exchange has charted an innovative future forward by looking back to its longstanding motto, "Originate, don't imitate." The 128-year-old company has an impressive lineage of bringing new products to market, including one that helped the Allies win World War II. 75 years later, in 2019, they're still at it, introducing a new line of alternative proteins for the plant curious. From its start in 1891, this Fortune 500 company, headquartered in Austin, Minnesota, has become the steward of more than 40 internationally recognized brands distributed in the 75 countries across the globe.
Josh King:
I'm talking, of course, about Hormel Foods Corporation, that's NYSE ticker symbol HRL. The entire executive team has set up shop this week at the NYSE to hold their Investor Days, something that so many of our listed companies use our impressive spaces for, and of course, to ring our closing bell, bringing the days trading to an end, not only for Hormel and it's 23 billion dollars of market capitalization, but for the 2,300 other companies who call our exchange home as their trading venue of choice.
Josh King:
So joining us Inside the ICE House today, Hormel's CEO, Jim Snee, and we're going to slather on the Skippy, spread the Wholly Guacamole, and fry up the Old Smokehouse bacon as we talk about how Hormel is proving that big food can improve the world, communities, and the people they serve, equally important for its CEO, what investments Hormel is making to ensure that it will be the food company of the future.Our conversation with Jim Snee, chairman, president, and chief executive officer of Hormel Foods, right after this.
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Josh King:
Our guest today, Jim Snee, is chairman, president, and chief executive officer of Hormel Foods. He joined the company in 1989, and his held roles throughout its divisions, and at the company's global headquarters. Jim was named president and chief operating officer in October, 2015, becoming Hormel's CEO in 2016, the same year that the company celebrated its 125th anniversary of its founding, and Jim was elected chairman of the board the next year. Welcome Inside the ICE House.
Jim Snee:
Wow, it's awesome to be here. Thank you for that wonderful introduction.
Josh King:
I watched your presentation to analysts in Freedom Hall of the NYSE this morning. Good reception from investors this morning at your Investor Day?
Jim Snee:
I think so. It's obviously an honor for us to be part of the New York Stock Exchange, but an even bigger honor to be here, to talk to our investors, and to really share our story. It's a story over 28 years that... It's evolved. And what we like to say is, we don't have a strategy of the day, of the week, of the month. It's this constant evolution of strategy that really makes us uncommon in the marketplace. And uncommon is a word that we use a lot in our organization, because it really describes who we are and how we go about our business. Today, in our Investor Day presentations, the individual presenters on average had 30 years of experience with our company. Not 30 years in the industry, 30 years with our company. That's unprecedented and uncommon. And, so when they're talking, they are the resident experts.
Jim Snee:
And everybody's always looking for something new, exciting, dynamic. And I think we have all of that, but we do it our way. And, so as we think about how important it is to build brands... And we have incredibly iconic, well developed, longstanding brands. And we like to say, "Nobody builds brands like we do," because it's an art and a scientist. And I know, firsthand, I've got some of the best artists and scientists on my team. You talk about innovation, and innovation is part of our business model. So when we think about building brands, being able to innovate against those brands, but then also having the insight to strategically and thoughtfully acquire businesses to compliment who we are, that's what really balances us as a company. So the words that we use a lot are uncommon and balance, because we think that's important to never get too far out of whack.
Josh King:
You say that, "Nobody knows this business better than we do." And when I was up in Freedom Hall, looking at you and your team up there, I also looked at the audience too. And these are people who have millions of dollars invested in your company. And yet, I look at them, and if I were to describe them as a whole, I'd say, "Boy, they skew pretty young." The people there have not been in this business all of the time that you and your team have been, and yet, they are making their investment decisions with their portfolios and deciding whether to go with Hormel or another company. Are there things that you learn from them on a day like today or in other discourse? And how do you get your pulse on the investment community?
Jim Snee:
Yeah. So we go about it a couple of different ways. The Investor Day is just one of the times that we interact with our investors. We take our show on the road and we'll travel to their offices or, quite frankly, they'll come to Austin, Minnesota, because we think it's important for them to see where we live, where we work, how strong our culture is. The other thing that I would say, and you make a really, really good point in terms of, it's our responsibility to educate them about our business. They can't possibly know everything that we know and sometimes they make assumptions. And, so we have to make sure that we arm them with all the facts that we have, so when they do make those assumptions or those investment decisions, they're as well informed as they can be.
Jim Snee:
And, so it is our responsibility to tell our business story. But then, also today, we really told our social story, which is incredibly important to us. And it's a platform that we call Our Food Journey, and there's really three pillars. The first is our people and our partners. Nothing is more important than the people that work in our organization, because none of it happens without them. Our partners are equally important. They help support our business. The second part of this is making sure that we invest, and lift up our communities where we live, and work. And, so we do that, yeah, through charitable donations, but it's the engagement of our employees in their communities. It's our ability to deliver on the sustainability goals that we've set. When we do that, that makes those communities even better and more sustainable. And then, really, the third thing is, when you think about what we do at our core, we're all about food.
Jim Snee:
And, so I said nothing brings people together like food, but we also have an obligation to enrich people's lives through food. And we can do that. We have a business called Hormel Health Labs and it's a very little known product in our portfolio, but it helps people who have a medical condition where they can't swallow, called dysphasia. And that improves their life. And maybe it's that, maybe it's somebody looking to have a Columbus Craft Meat charcuterie tray because they're entertaining, or a parent who wants to feed their kid a nutritious and healthy Skippy Peanut Butter sandwich. Those are the ways that we make those lives better. And, so through that food journey, we have that social responsibility as well.
Josh King:
Well, I'm glad that you brought up Skippy, Jim. It's very important to me. Because when I helped organize Investor Days for Hartford Insurance and First Data Corporation, our products were found in financial portfolios or payment networks, rather on your grocer's freezer or on the shelves. But we always put our wears on display outside the meeting room and Hormel is no different. So when I was down watching some of your show this morning, I picked up some of your P.B. & J Minis. And, so let's dig in. This is the first episode that we've ever done which we'll be actively sampling some of the product. So would you rather the strawberry or the grape jelly as we go further?
Jim Snee:
Well, as you would expect me to say, I can take either one. I want you to have your preference.
Josh King:
I'll go grape.
Jim Snee:
All right, all right, love strawberry jelly.
Josh King:
So I have a confession to make. On this show, I am biased. And this is the sound of packaging opening, dear listeners. You won't have it very long as a distraction for your show, for long, but I'm going to take a bite.
Jim Snee:
Well, hold on.
Josh King:
Oh.
Jim Snee:
Tell me what you see.
Josh King:
Well, I see a Skippy Peanut Butter and some jelly, and it is delicious.
Jim Snee:
Golden brown.
Josh King:
Golden brown.
Jim Snee:
Enrobed around delicious peanut butter and jelly, right?
Josh King:
I got to tell you, I stole-
Jim Snee:
You didn't wait that long.
Josh King:
I took a half-dozen others because they're going right home to the house later, Jim.
Jim Snee:
Well, I know, but your listeners want to know. They want to hear. They want you to... Now you take another bite. Really?
Josh King:
No, it's heavenly.
Jim Snee:
Unbelievable.
Josh King:
It's just heavenly.
Jim Snee:
It is heaven, thank you. But it's a golden brown, enrobed, right? We've got dough that enrobes the peanut butter and the jelly, as you take another bite. Tell me about the flavor, besides heavenly.
Josh King:
Well, it tastes exactly like that sandwich that I know and love, that my wife makes for me and the kids.
Jim Snee:
Exactly.
Josh King:
I am curious about-
Jim Snee:
How much labor did you put into this?
Josh King:
Zero.
Jim Snee:
Right. You opened the package.
Josh King:
It came right out of the pack.
Jim Snee:
Yeah, exactly. So think about a parent who's looking for a nutritious snack for a child. Perfect.
Josh King:
It's great.
Jim Snee:
Right? Open the package and you're done. Oh, you got to take the bite. Can I have a bite?
Josh King:
No, please do. And I'm going to tell you this story while you enjoy your P.B. & J mini. Because although we live here in the city, we have a place upstate. All the time, we stop at Hannaford's, Cairo, New York, buy 2 64-ounce tubs of Skippy, one for upstate, one for downstate, and there's a good deal of labor that goes into it. We like it. My wife prefers it on a toasted Thomas's English Muffin. But this is a great innovation for us and a real discovery.
Jim Snee:
I finished mine first.
Josh King:
I'm sorry. Well, there we go.
Jim Snee:
So let's talk about this because it's simple, right? It's basic, but how innovative is it? Right? It's incredibly innovative. And you say, "Why has it taken so long for someone to come out with a snack-size, handheld, peanut butter and jelly snack for kids, multiple ones that truly meet their needs?
Josh King:
What's the shelf life?
Jim Snee:
Incredible. I don't know the actual shelf life, but I will tell you that from freezer, when you take it out, you let it thaw, and that's how you achieve the softness, the freshness of the bread.
Josh King:
I'm going into my second now.
Jim Snee:
Yes, I see that. The disbursement of the peanut butter and jelly throughout the sandwich is fantastic, right?
Josh King:
How does it manufacture like this? Is this an injection? How does it get in?
Jim Snee:
Yeah, I actually haven't seen the line, but there is proprietary technology to make sure that there's good distribution of the peanut butter and jelly throughout the bread. Did you ever think you'd have a conversation about a peanut butter and jelly sandwich?
Josh King:
This is our first, I said, our first active sampling episode of Inside the ICE House. After a 135 episodes, we are finally eating and doing this over a meal. We're going to do this more often.
Jim Snee:
I do think there's an interesting story here. And you talked about innovation, and how important it is, and how CEOs talk about it. But then, how does it really play out in the organization? And Skippy, I think, is a poster child for our ability to innovate. So when we acquired the Skippy brand in 2012, 2013, we looked at that business and said, "Okay, we know how to manage iconic brands, so this isn't too far of a stretch. We know the center of the store business," but the key insight we had was, we can innovate. And the exact words were, "We need to take peanut butter out of the jar." And, so we, right away, went to work and we created what were called Skippy P.B. Bites.
Jim Snee:
And, so it was a peanut butter covered pretzel, a double peanut butter, and bite size snacks in a cup. That was our first venture. And then, Skippy P.B. & Jelly Minis were really our second big innovation with the Skippy brand that had lacked innovation for many, many years. So it was knowing or having that insight at the time of acquisition, beyond just buying the business, and growing distribution, and hoping to sell more jars of peanut butter, which we have. But also thinking, "How can we bring peanut butter into consumers lives in new and different ways?
Josh King:
Who did you buy from in 2011, 12?
Jim Snee:
Unilever.
Josh King:
As your guys are in the M&A room, and deciding what to go after, and Unilever is not some fly-by-night operation,-
Jim Snee:
No, they are not.
Josh King:
... they've been at that for a long time, they couldn't have figured this out? Did you say, "We need that name, because we can do better for it than Unilever has?"
Jim Snee:
Yeah. I think, like you say, Unilever is an amazing organization. But in terms of where Skippy fell on their priority list, it just wasn't at the top of the list. They had so many other businesses and brands that they were focused on that this had fallen to the bottom. But when we looked at it and thought about where it fits in our portfolio, it was at the top of the list, so it got a lot more time and attention. And, so that was the opportunity that we saw. It wasn't that they weren't capable of doing it. It just didn't have the same priority that it did in our portfolio.
Josh King:
So take the flip side of that story. I think, earlier this year you completed the sale of CytoSport, which is the maker of Muscle Milk, sold it to Pepsi for about half-a-billion dollars. Did you think that they could probably be a better steward of that brand than you've been able to be?
Jim Snee:
That's exactly right. Sometimes you do have to look at your portfolio and say, "Who's the best owner of the business?" And, so when we bought the business, Pepsi was our distribution partner. And, so we had the business relationship around Muscle Milk.
Josh King:
So I want to get into more innovation happening over in Austin, Minnesota, in a minute. But I want to start with the stability of the business, and of its executives, and the people that you talked about on the stage today. You've been with Hormel yourself for 30 years now, and you're only the 10th CEO in the company's history. We think we know how a sausage gets made, but how does a Hormel person get made and stay with the company for so long? What's your story?
Jim Snee:
This is where you're supposed to say, "You don't look that old."
Josh King:
You don't look that old, Jim Snee.
Jim Snee:
All right, thank you. Coming out of college, I'd love to tell you that I had this grandiose strategic vision for looking at companies and picking the one that I was going to spend my career were with, but that would be a lie.
Josh King:
That was New Mexico State?
Jim Snee:
The New Mexico State.
Josh King:
The New Mexico state.
Jim Snee:
The New Mexico State University.
Josh King:
What's the mascot?
Jim Snee:
Aggies,-
Josh King:
The Aggies.
Jim Snee:
... in Las Cruces, New Mexico.
Josh King:
Are you from New Mexico?
Jim Snee:
I grew up in Albuquerque. I was born in New York-
Josh King:
ABQ.
Jim Snee:
Born in New York city, but grew up in Albuquerque.
Josh King:
I got to ask, what brought the Snee family from New York City to Albuquerque?
Jim Snee:
My father retired. He was a City of New York sanitation worker and-
Josh King:
New York's boldest.
Jim Snee:
... had lived in New York his entire life and has... When he retired, my mother and him said, "We're getting the kids the heck out of here." And, so he took us to Albuquerque and that's where I grew up. Great place to grow up.
Josh King:
Partridge Family, Point me in the direction of Albuquerque.
Jim Snee:
Maybe not quite that extreme, but it's got some similarities.
Josh King:
Yes, okay.
Jim Snee:
So graduated from New Mexico State and honestly was looking for a job, right? And the offer came through from a number of different companies, and Hormel Foods was one starting in San Francisco, and they offered me a company car starting in the sales route. Who could pass that out, as a starving college student? And really, from there, it was this combination of, I believe, hard work on my side, but then opportunity that was created from the company.
Jim Snee:
And, so one of the things that we do really, really well is we recognize people who are performers. And then, we also create opportunities through additional job responsibility. We have great training programs and it allows people really to achieve everything they're capable of. The question I get quite often is, "Did you ever think you'd be CEO of a Fortune 500 company?" And the answer is, "No." Right? If I had written the script for my life back in 1989, it would not have had this as part of that script. But I joined a great company who obviously had a great track record of performance, but then also had other great people to contribute to that and then recognized hard work, recognized performance and gave me the right opportunities along the way to round out my career. And I've had a number of different jobs in the organization. So I like to say I've had a career within a career.
Josh King:
Those first few years, 1989 onward, Northern California, company car, is it a trunk full of Spam and you're just calling on accounts?
Jim Snee:
A trunk full of bacon. Trunk full of bacon, and I did deliver cases of bacon to some of the finest hotels in downtown San Francisco, and the sell them product. But it was a great learning experience and you learn the business from the ground floor up. And I wouldn't have changed a thing about where I went to school, the experiences I had, the opportunity that that education gave me with Hormel foods. But then, even within the company, to your point, I've been in back of a lot of kitchens. And I've seen the way food is prepared, and I see the challenges that food service operators have. I've walked the meat case with the meat manager and understand what it is that they're looking for, how they want to connect with the consumers, how they want to drive profitability in their business.
Jim Snee:
And, so I think having that view of the business, but then coming up through the company, and the network, and the connections, the relationships that you form are just absolutely irreplaceable. The people that we presented with this morning, all of us have come up throughout the organization. And, so we know each other's families, we see each other at the grocery store, we see each other at church. And I always like to joke and say, "The great thing about our company is we know each other. The bad thing about our company is we know each other."
Josh King:
We know each other. Let's talk about that company that in which everybody knows each other's names. It has this unique ubiquitous place in American and, really, world culture. One of the oldest brands in Hormel's portfolio even lent its name to a successful Broadway play.
Josh King:
Ham and Spam. It's a bit redundant in rhyme, scheme and content, but Hormel leaned in on the joke, sponsoring some of the show and even partnering to give ticket holders access to collectors edition cans of Spam. Did I read that Hormel's reporting, right, that the sales of Spam actually rose in the nine of the shows first 10 years it was on Broadway?
Jim Snee:
That's correct. That's did you see the show?
Josh King:
I have not seen the show.
Jim Snee:
I have seen the show. It's an amazing show. Obviously it's a great testament to the brand, but the one thing about the Spam brand that we love is, it's a great way for us to not take ourselves too seriously. And, so we're very respectful and we know what the brand means to the company, but at the same time, people love to have fun with it. And if that's the way that they engage with the brand even more, good for us.
Josh King:
When you're folks were originally in New York City and ultimately came to Albuquerque, was Spam in the kitchen cupboard in ABQ?
Jim Snee:
Yes, spam was in the cupboard and Spam is in the cupboard today.
Josh King:
I'm sure it is, today. But you grew up with it. Your mom-
Jim Snee:
Absolutely.
Josh King:
... made sandwiches?
Jim Snee:
Actually, Spam and Dinty Moore Beef Stew were staples in our house.
Josh King:
I love Dinty Moore Beef Stew and Dinty Moore Chili. Who is Dinty Moore?
Jim Snee:
Who is Dinty? He's a larger-than-life lumberjack who does great things in the forest, and he's incredibly hungry, and Dinty Moore Beef Stew is his food of choice.
Josh King:
So today's Hormel, not the same one that we grew up with in that age with Mr. Moore himself or even when you joined back in 1989. How many brands now make up the current portfolio? And what are some of the things that the average listener would be surprised to find out are part of your family?
Jim Snee:
The number that we really like to talk about, which surprises consumers, customers, investors, is the fact that we have 40 brands, 40 brands that are number one or number two in the categories in which they compete. So the ones that are easy to identify, right, Hormel Pepperoni, Hormel Chili, anything that has the umbrella brand. But, quite honestly, there's a people who don't realize that we own Skippy Peanut Butter. As our portfolio has evolved over time, we've leaned into the natural and organic space. And, so another East Coast business that we bought several years ago was Applegate. We bought a Justin's brand, which is leaders in almond nut butter out of Boulder, Colorado. Most people don't realize we own Wholly Guacamole, and guacamole is everywhere. And, so it's a lot of these brands that we don't have the Hormel name on, and it's not for any particular reason. It's just that consumers resonate with the brand in a better way, so we're not going to disrupt it.
Josh King:
So I want to hear from Sohui Kim. She's the chef and owner of Insa. It's a Korean barbecue right here in Brooklyn, New York, talking about the cultural importance of Spam in her menu.
Sohui Kim:
When I started out my culinary career, you start experimenting a little bit and you go back... It's all about your identity, your national identity, your personal identity, your family identity, and it sort of fuses. And somehow Spam is there.
Robert Ku:
It was during World War II where it gained international prominence because it became part of the American military rations. And, so wherever American soldiers went, they probably had Spam with them. And the places where you find Spam popular are places where the American military had major presence, Hawaii, Guam, Okinawa, parts of Japan, Philippines, and Korea.
Sohui Kim:
And that's Robert Ku. He's an author who's written about the cultural politics of eating Asian in the United States. Jim, you've led Hormel Foods international business for several years, and as CEO, completed the company's first international acquisition. How has that side of the business grown from when people traveling from the United States to visit relatives in the Pacific Islands, Southeast Asia would pack their suitcases full of Spam and route?
Jim Snee:
Well, it really is a phenomena and I didn't fully appreciate it until I took over our international business. And when you think about the iconic presence that Spam has in South Korea, that it has in Okinawa, Japan, that it has in the Philippines, it really is part of their culture. In South Korea, in particular, the idea of receiving a Spam gift box, it's like receiving a bar gold. It's incredible. And when you go to the retail outlets during their two big holiday seasons, these gift boxes are stacked from the floor to almost the ceiling, and it's absolutely incredible.
Jim Snee:
And, so our international presence continues to grow, led by iconic brands like Spam. When we acquired Skippy, it came with a peanut butter plant in China. And then, you mentioned the acquisition that we made in Brazil. And, so not only are we developing the business we've had, but the acquisition in Brazil afforded us the opportunity to learn more about a country and markets that we really didn't know anything about. And, so it was the right size acquisition, about a hundred million dollars, that let us learn a lot more about the consumer, the customers, the supply chain. And it's done everything we've wanted it to do, and we think there's continued opportunities for expansion.
Josh King:
Shelf-stable businesses now make up less than about half of Hormel sales. But in this year you launched a new product line, Happy Little Plants, aimed at the plant curious customers. I'm using air quotes around plant curious. How are you able to bring the first product to market in less than three months?
Jim Snee:
If we take a step back on innovation, so we have an innovation goal of, 15% of our sales by 2020 have to come from items created in the last five years. That's an aggressive goal and we're on track to hit that for next year. And, so it is the Skippy P.B. & J Minis, it's Pumpkin Spice Spam, and then most recently, as you described, it is Happy Little Plants. And, so what we know is that there are consumers who are looking to introduce plants into their diet in bigger ways than ever before. And, so this insight wasn't new to us, and I know there's some other companies that have gone out and had unbelievable valuations, but we were on this before that. And we actually were heading down a path of buying into that market. Once that valuation came out, this potential partner said, "We might want to try and pursue that on our own," and we separated.
Jim Snee:
And, so we had to take a step back, and reflect, and say, "Okay, we're not going to buy it," but we needed to get to this space and we need to get there fast. And, so bringing our resources together and implementing an agile process within our organization to say, "Let's mobilize and get a product to the market that we can optimize as we go. It doesn't have to be perfect." And that's what we set out to do. And, so if it's eight weeks, 10 weeks, whatever the final number was, from inception to the product being in market, to your point, it was under three months. And it was because we had a team of people focused on being agile, who trusted each other, who were empowered and wanted to make a difference.
Josh King:
Let's talk a little bit about the people that you implied. Were talking about Pat Brown and Impossible Foods, Ethan Brown and Beyond Meat. No relation between the two of them, but it has taken the investment world by storm this year, and has got to be a important learning experience for a CEO like yourself, and your team to say, "Well, there is a craving out there to allow people to have a plant-based and vegetable-based protein replacement element of their diet."
Jim Snee:
Again, I said this isn't new to us. So as you think about our portfolio over the last, oh, five or six years, in our Investor Day today, we talked about this evolution of our portfolio. And, so if you go pre 2013, we were all about pork and turkey into the retail market. And then, really, after that with the acquisition of Skippy and then the acquisition of Wholly Guacamole, we have and have had non-meat protein items in our portfolio. And, so, this idea that it's new consumer demand, well, it's been there, it's just maybe the form, the function, and-
Josh King:
Packaging, branding.
Jim Snee:
... it's going to continue to evolve. Right? And I think the next phase is, what is the true consumer acceptance over the long term? And that's yet to play out. We understand that. The other thing that's important for us is we know consumer connect with a lot of these new items, these new trends, in the food service space for the first time. It's easier to try it when somebody else is preparing it for you and people are willing to take a risk there. Well, we've got an incredibly well developed food service business. So we've introduced Happy Little Plants and other plant-based pizza toppings. Our Applegate has a blend burger that has three simple ingredients. So when you start thinking about ingredient lists, it really meets the needs of those customers who are looking for something that's slightly different. They can still live in the world of meat, but they can meet their plant-curious needs as well.
Josh King:
The first Happy Little Plants offering was a ground beef product made from modified soybeans. And I'm wondering, did the research have any connection to The Hormel Institute, which was founded over 75 years ago to study the nutritional value of soybeans?
Jim Snee:
We engaged with The Hormel Institute and said, "You know what? What's your point of view of soy and soybeans in the diet?" And obviously, they've done a lot of research. They're strong advocates for it. They see the benefits of that as a plant-based item in people's diets. And, so I won't say, "Made the decision for us," but it certainly helped inform our decision as we headed down that path.
Josh King:
You've cited The Hormel Institute as part of the reason that Austin, Minnesota should be considered the tech hub of the Midwest. What's The Institute working on today beyond what we just talked about?
Jim Snee:
So The Hormel Institute, if you go back in it's history, it was formed by the son of our founder, Jay Hormel. And Jay was very interested in medical research. And, so over time, it's focus has evolved. It was one of the leading founders of amino acids and today it's focused on cancer research. And, so it's certainly one of the leading cancer research facilities in the United States. A large part of the funding for The Hormel Institute comes from The Hormel Foundation, who is our largest shareholder. They own 48% of our common shares.
Josh King:
After the break, Jim Snee, chairman, and CEO of Hormel Foods and I explore the company's inspired people, inspired food philosophy, and Hormel's future as a global branded food company. We'll be right back after this.
Speaker 7:
And now, a word on ICE's ETF hub.
Speaker 8:
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Speaker 8:
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Josh King:
Welcome back. Before the break, Hormel Foods chairman and CEO, Jim Snee and I were discussing the company's innovative journey. So in conjunction with the 125th anniversary, you built off of Hormel's history as an originator and launched, I think what we mentioned earlier, Inspired People. Inspired Food. to change the narrative around food. Why did the narrative need to be changed?
Jim Snee:
Well, from my perspective, there was a couple of things at play or there was this attack on what I'll call big food, right? And it almost became big, bad food. And I just didn't subscribe to that theory because I know our company. I know who we were. And I was like, "We're not that organization." We are big, yes. Guilty is charged, your honor. But we are big, good food. And we're doing so many good things that we've got to change the narrative internally, and then we've got to do a better job of telling our story externally. So working closely with our communications team, I know mission statements are so popular and every college student is thinking about what the mission statement's going to be for their startup, but when we ask people in our or organization, "What's our mission statement? Tell me what it says," nobody could do it.
Jim Snee:
And, so it was like, "Well, just how meaningful is that if nobody really knows?" And it was a paragraph, and nobody sits down, and remembers a paragraph. So we set out, as a senior executive team, and said, "Listen, I get that academia tells us we need a mission statement, but what's our purpose? What are we really all about? And let's have something that people can latch onto and they can feel good." And I tell you, within probably four to five hours, we came up with Inspired people. Inspired food. It wasn't hard to come up with that. The hard part was saying, "Do we have agreement that this represents our organization and people are going to buy into this?" And it didn't take long. And from where I sit, when you can reach consensus around something like that so quickly with 16 different executives, you've got something. And, so we knew we were onto something with our Inspired People. Inspired Food. purpose, and we launched it at our 125th anniversary, and the reception it received from our team was overwhelming.
Josh King:
So 16 executives is one thing, but how do you distribute that? How do you socialize it within a global organization, people at different economic levels, people doing different jobs, the idea that, as you walk through the door of a Hormel facility, Inspired People. Inspired Food. becomes the mantra of the way they go to work every day?
Jim Snee:
So the other thing that I asked the organization was, "Describe our culture." We've always said, "We've got a great culture, a strong culture." I said, "Tell me in your own words what our culture is," and the response I got more often than not was... It started with, "We're hardworking, Midwestern folk," and you know what? That's great, but that can't be everything.
Jim Snee:
And, so the other thing that we did was, we said, "We need to do a better job of defining our culture, who we are, what we stand for, how things get done around here." And, so we developed what we call our cultural beliefs. And, so there's seven statements that really define who we are and what's important to our organization. And, so linking this cultural belief journey to our purpose journey made it cascadable throughout the organization, with this overarching mantra of, "What you do matters. I don't care where you are in our organization, what do matters. And if you don't do your job, that will be a problem." And, so I think it helped people understand that, A, they're just not a number. They're not a cog in the wheel, what they do matters. And then, when they started to have better clarity and definition around what our culture really was all about, it helped help them understand that they could be inspired people, creating inspired food.
Josh King:
Part of Inspired People. Inspired Food. is your corporate responsibility campaigns. I want to listen to a clip focused on some of Hormel's work that it does in its very own backyard near Austin, Minnesota.
Speaker 9:
The consumers are like family. They're employees, they're our consumers, but they're also friends. They're also people that make Cedar Valley. Their needs come first. Well, when you have a partnership with a Hormel company, that gives us those opportunities. That gives us that ability to do that. We work hand-in-hand with the company, the corporate office. We work with The Hormel Foundation. There's always been support from the CEOs all the way down to their management teams, and they treat us as a partner.
Josh King:
I watched the video of the folks at Cedar Valley Services. They're putting together some of those gift packages, by the thousands, that you were probably talking about. What is Hormel's relationship up with its community?
Jim Snee:
Powerful, invaluable, and I love this example that you've pulled. It means so much to us to be able to lift others up. And I talked a little bit earlier about our food journey and the impact we have on our communities. It's our responsibility and our obligation. A company the size that we are in a town the size we are, we have a lot of influence and we can make a difference. And the difference that we're making in the lives of those at Cedar Valley, it is so rewarding.
Josh King:
Are people with disabilities and-
Jim Snee:
Yep, people who are physically and mentally challenged. And we brought them to our annual shareholder meeting. The first time we revealed this video was at our annual shareholder meeting. And to be looking out on the faces of 2,000 shareholders, some of them crying as they see this video and because they understand the impact that their company is committed to having, but then having a group of these people there stand up and be recognized in a way that they probably have never been recognized in their life, you can't imagine the powerful feelings that ran throughout that auditorium.
Josh King:
The Inspired People. Inspired Food. campaign extends far beyond the confines of Austin and the example of Cedar Valley Services. In 2018, Hormel donated over 7 million dollars in cash and product donations to help end food insecurity. Where do you focus your efforts in this area?
Jim Snee:
Obviously it's hunger and education. We believe that if we can help solve for hunger, it makes education more achievable. And, so as we work domestically and, quite frankly, internationally on hunger or malnourishment efforts, it's important to us because we're a food company. One of the things that we did a decade ago is, we created a product called Spammy. It's a fortified turkey product. It's in a can, and it's everything that we do. It capitalizes on all our strengths. And we identified Guatemala as a country. It leads the world in malnourishment.
Jim Snee:
And, so we were able to put together partnerships and a supply chain to get Spammy into Guatemala, to help the mothers, and to help the children with malnourishment, but then also physical and cognitive development. And the impact has been unbelievable. We also have mission trips for employees and I've made the trip three times. I had a chance to take my youngest child, my daughter, who's a senior in high school this year, and it's just fascinating to see the impact that those families have on our team members and family members. We think we're going to help them, and when it's all said and done, we're the ones that leave with a lot more.
Josh King:
A principle of the campaign is food can also bring people together. I want to hear one little clip.
Tommy Norman:
I was driving down a neighborhood street. They saw me and they ran. So I saw which apartment they went in. I went and knocked on the door, and the mom came to the door, and she asked me what was wrong. And I just told her I was concerned, because the kids ran from me. They hadn't done anything wrong, but they ran from me and I didn't want that. I asked them why they ran. They said they were scared of police. They'd always been taught to be scared of police.
Josh King:
That was Little Rock, Arkansas police officer, Tommy Norman. How did he to your attention?
Jim Snee:
It's really fascinating how people come to us. It's not always us seeking out the stories. It's others who tell us about individuals who have had an impact on their lives and their role that our food played in that life. So it was somebody connecting with our communications department and actually also through our Skippy plant in Little Rock, Arkansas, to say, "You need to know what this individual is doing with your product, how he's making a difference in these communities, how he's building relationships that have been incredibly strained, and developing trust by taking those Skippy P.B. Bites that I talked to you about earlier." And, honestly, who would've ever thought that when we sat down to innovate and create Skippy P.B. Bites, that we would be impacting community relations in Little Rock, Arkansas. And, so it's this far-reaching ability that we have that we never give ourselves credit for. And, so we do need to be thinking about how we impact communities and how we impact society in ways that are never front of mind.
Josh King:
Much of your charitable giving is in relatively small amounts, which seems like a central part of your strategy. How does that theory tie into the Small Changes, Big Impact Food Summit?
Jim Snee:
So they're a little bit different, but still very similar. So we allow our plant communities to donate to charities and organizations in their communities. We don't dictate to them. We want them, because they're so well connected in the community, to allocate those dollars for their best use. But the Small Change, Big Impact Summit really was an incredible event. We partnered with Harvard earlier this year to really talk about what's happening in the world of food. And, so whether it is malnourishment, or food insecurity, or the future of food, or agriculture to, again, understand and remind people that we play a much bigger role in this supply chain. But then, also reminding people that not every idea has to be this huge idea. And, so we had a laundry list of presenters and presentations of people who had done small things, but had incredible impacts, sometimes in their school district, sometimes just in a high school. But I think it was eye opening to so many people to say, "I can make a difference."
Josh King:
As we wrap up Jim Snee, we've touched on Hormel's meat-centric past, its current protein-centric outlook. How does everything going on today lead to what you call your 2020 Plus plan to be a global branded food company?
Jim Snee:
Well, everything we do really informs and is part of who we will become. And, so there's the business side of what we do, and that's the brand building, that's the innovation, that's the acquisitions. But then there's the social part, our food journey of making sure we take care of our team members, take care of our communities, take care of our consumers. All of those things combined is what allows us to have those strategic priorities. And the six priorities I laid out today, I've said those are the things that we have to get done so that we can continue to be successful in the future. And as long as we continue to be successful, we can continue to do all the great things that we've done to touch and lift up so many lives.
Josh King:
As I pop one more Skippy P.B. & J Mini into my mouth in our first active sampling episode of Inside the ICE House, Jim, Hormel CEO's average is 16 years at the helm, if you break it down over the company's history and the number of people who've sat in the top seat. I want to know if we will see you back here to celebrate the company's 140th anniversary, and what will you be most excited about then, you think?
Jim Snee:
Well, I don't know. God willing, I will be. But I think, from my perspective, it's really this continued evolution of the company and it's... We're entering a new chapter as we go into 2020 and beyond this idea of how do we become this global branded food company, because as I said, it's all about the food. And, so I will be most excited when we can say that we are the most admired global branded food company in the world, and you're eating another Skippy P.B. & J Mini.
Josh King:
I will have many more between that point and today. Jim Snee, thank you so much for joining us Inside the ICE House.
Jim Snee:
I had a lot of fun. Thank you so much, and thank you for everything you do.
Josh King:
That's our conversation for this week. Our guest was Jim Snee, chairman, president, and chief executive officer of Hormel Foods.
Josh King:
If you like what you heard, please rate us on iTunes, so other folks know where to find us. And if you've got a comment or a question you'd like one of our experts to tackle on a future show, email us at [email protected] or tweet at us, @icehousepodcast. Our show is produced by Pete Ash and Theresa De Luca with production assistance from Stephen Romanchick and Ian Wolff. I'm Josh King, your host enjoying his P.B & J Mini From Skippy Peanut Butter, signing off from a very well satiated library of the New York Stock Exchange. Thanks for listening, and we'll talk to you next week.
Speaker 1:
Information contained in this podcast was obtained, in part, from publicly available sources and not independently verified. Neither ICE nor is affiliates make any representations, or warranties, express or implied, as to the accuracy or completeness of the information and do not sponsor, approve or endorse any of the content herein, all of which is presented solely for informational and educational purposes. Nothing here in constitution offered to sell, a solicitation of an offer to buy any security, or a recommendation of any security, or trading practice. Some portions of the proceeding conversation may have been edited for the purpose of length or clarity.
