It is perhaps true that you can’t make a silk purse out of a sow’s ear, but it is not true that you cannot make canned pork popular, beloved and even cool.
The resurgent popularity of Spam – the world’s most famous and widespread luncheon meat for half a century – is one of the horses Hormel Foods Corp. has ridden while expanding its profitability and pleasing investors, who have seen share prices double since 2000 and dividends steadily increase.
The company has redesigned its Spam packaging to “contemporize” the product and has – apparently successfully – given it a retro-cool image. Last year the company ran a “Crazy Tasty” advertising campaign to promote Spam, offering recipes for Barbeque Spam Kabobs, Spambled Egg Muffins, Mac’* Spam’* Cheese, QuesaSpamaDillas and Spamburgers. The company reports that Spam sales are growing.
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It is even selling Spam singles, which is the processed pork shoulder version of the individually wrapped Kraft cheese single.
They can be eaten cold or left it in the car’s glove compartment during the day so you can eat it hot on the drive home from work, a Spamobile Spam promoter said during the World Pork Expo in Des Moines, Iowa, this summer.
But the company has also been enjoying the fruits of its investments in turkey products: its Jennie O Turkey line can be found in supermarkets across the country and Hormel is the largest turkey processor in the United States.
As well, it produces a wide range of already cooked and prepared meat products that are taking up a greater share of the fresh meat case every year.
Hormel’s year-to-date sales and earnings per share, excluding an extraordinary item, are both up 15 percent compared to last year and the coompany has a goal of increasing sales by six percent per year and earnings per share by 10 percent per year.
The company has not just been doing well for the past few years. It has increased its dividends 39 years in a row and has paid its quarterly dividends without a break since it first started paying them in 1928.
Hormel officials refused to be interviewed for this story.
The company was founded in 1891 by George A. Hormel, the son of German immigrants. Hormel developed the world’s first commercial canned ham in 1927, the product eventually called Spam.
The origin of the name has long been the subject of debate among Spamficionados. Some say it comes from “spiced ham,” others say “shoulder of pork and ham” is more likely and some say a drunken Hollywood actor came up with the name.
Spam was trademarked as a name in 1937, just in time for the Second World War, when it became a staple of GI rations and reached great popularity when given to long-suffering British civilians who had grudgingly grown accustomed to eating the meat of bulls and worn out ewes during the German submarine offensive.
During its Aug. 25 third quarter results announcement, Hormel chair and chief executive officer Joel Johnson didn’t sound like the head of a tired old meat processing company, but like the boss of a cutting edge food company.
“Our turkey business delivered another outstanding quarter driven by continued value-added sales growth, lower grain markets and efficiencies in our production facilities. Impressive growth from several of our value-added products in refrigerated foods and key categories in the grocery products segments benefited the bottom line as well,” he said.
“The year-over-year improvements in both the top and bottom line reported by the grocery products segment is encouraging.
Two important areas of growth include the Hormel microwave line of products and the Spam family of products.”
