Hormel Foods has referred to itself as a "global branded food company" since Jim Snee took over as CEO in 2016.
The maker of Skippy and Spam has certainly grown its stable of brands in that time. But the global ambitions from its headquarters in Austin, Minn. have stalled.
After staking out a plan to "aggressively develop our global presence" last year, Snee reported last week that the international business is "structurally sound and increasingly balanced."
Just not growing.
Two outbreaks — COVID-19 and avian influenza — are partly to blame. Sales in Hormel's biggest overseas market, China, are still struggling after the last pandemic lockdown ended this winter. And turkey exports are half what they were last year due to bird flu deaths and export restrictions.
The challenges are temporary, Snee told analysts on a conference call last Thursday. The company's foreign outposts will soon "resume delivering accelerated growth."
"The team in China has aggressive plans in place to drive improved results in the back half of the year," Snee said.
For the past two years, that has been the trend for Hormel's international sales — a better second half of the year.
For the past two years, its international sales have declined overall.
The segment has had some recent wins: Skippy is now the No. 1 peanut butter in Mexico and the Philippines. Sales in Brazil remain elevated, and Planters sales are bouncing back.
This winter Hormel invested more than $400 million in a leading Indonesian snack food company. The 30% stake in Garudafood is so far meeting expectations, though it isn't expected to boost the bottom line anytime soon.
"As we go along, we certainly think there will be opportunities for us — if the business delivers for us — to take a bigger position," Snee said in March.
Hormel now sells food in more than 80 countries, about 10 more since Snee put "global" at the front of the company's tagline. Though just 6% of the company's sales, international growth is one key to Hormel's overall trajectory for the rest of the year.
It's also a core tenet of the company's evolving identity.
Snee, who once led Hormel's international division, said in an interview last year global growth is still "aspirational."
But last week he made clear he expects, at the very least, short-term growth from "contributions from our branded exports, multinational businesses and partnerships around the world."
Analysts would be pleasantly surprised with the kind of sales boost Hormel is expecting for the second half of the year. A Barclays report said Hormel's efforts are "likely not enough" to reach the 5% sales growth needed over the next several months.
A recovery in turkey volumes and Planters sales gains "generally look achievable," Michael Lavery at Piper Sandler wrote last week.
Overall, Hormel has struggled to sell more pounds of food in recent years as demand diminishes for some products and supply chain challenges hurt others, wrote J.P. Morgan analyst Thomas Palmer. "We are not confident that the volume rebound will be as significant as anticipated."