Tyson Foods’ efforts in recent years to revitalize its chicken business, particularly prepared and value-added formats, are paying off in 2026 as the company taps into consumer demands for affordable, convenient options that align with new federal dietary guidance.
“Even in a dynamic economic environment, protein remains essential in the grocery cart,” CEO Donnie King told investment analysts during the company’s first quarter 2026 earnings call Feb. 2.
For support, he pointed to Nielsen data showing strong sales of Tyson’s retail branded products outpaced total food and beverage retail volume in the 13 weeks ending Dec. 27, which he said reflected broader momentum across the company’s prepared foods and chicken portfolio during the quarter.
“According to Nielsen data, total category food and beverage retail volume declined 1.8%, with dollars up 0.9% over 13 weeks ending in December. In contrast, our retail branded products, which include our national and regional brands, grew by 2.5% in volume and 3.6% in dollars – significantly outperforming the broader sector,” he said.
“This retail growth was broad-based,” he added, highlighting strong volume performance of Tyson‘s national and regional branded fresh chicken, up 10.7%; frozen value-added chicken up 12.2%, Hillshire Farm lunchmeats increased by 10.4%; Hillshire Snacking up by 12.5% and Hillshire Farm smoked sausages up 2.8%.
In addition to the volume growth, he said, the brands grew dollars and shares.
In the same period, the company’s chicken segment overall delivered $459 million in segment operating income with a margin of 10.9% “in a less favorable operating environment,” reflecting the company’s continued effort to make performance improvements through operational efficiencies.
The segment’s results mark a 180-degree turn from a few years ago when Tyson’s chicken business struggled with several missteps and changing consumer behavior that prompted it to shutter multiple US plants while simultaneously investing in a high-tech new facility to produce fully-cooked products with higher margins that also better met consumer demands.
The segment also benefited from the company’s diversified pricing strategy and product mix, which Tyson said kept average selling price steady while supporting margins despite declines in commodity prices and disruptions from the US government’s temporary shutdown in the quarter.
Protein, affordability and federal dietary guidance converge
King also attributed its chicken segment’s success to the product being “an affordable, high-quality protein” that align with recommendations in the new Dietary Guidelines for Americans that emphasize protein’s role in healthy dietary patterns.
Prominently featured in the DGA’s inverted pyramid, which was designed to depict the guidelines, are animal-based protein sources in the upper right corner – giving them prominence over other plant-based sources featured lower down and to the left in the pyramid.
“By advocating for increased animal protein consumption as a leading pillar of a healthy lifestyle, the [Trump] administration has underscored what we have always known: animal protein is a foundational building block of a nutritious diet,” King said.
He added that Tyson’s offering also aligns with updated recommendations to limit artificial flavors, petroleum-based dyes and artificial preservatives, which Tyson has “been ahead of” and has “already proactively removed petroleum-based synthetic dyes and other ingredients, including high-fructose corn syrup, across our US branded portfolio.”
He added: “By simplifying our labels and using the same ingredients you can find in your pantry, we’re providing consumers what they are looking for: protein. It’s real food that tastes good and is good for you.”
Against this backdrop, he added, “the opportunities before us are more promising than ever.”
Prepared foods emerge as a key growth driver
The opportunity for the company’s prepared food segment is also significant, with the segment delivering strong sales up 8.1% in the quarter from a year ago, according to Tyson. This reflects the company’s efforts to enhance the segment’s profitability and fill rates, which COO Devin Cole noted were “solid, but with room to improve.”
Improved performance for prepared food also offers Tyson more predictable pricing, reduces its exposure to commodity swings and taps into labor efficiency and throughput that the company has prioritized in recent years.
With this context, Cole echoed King’s optimism for the year ahead, noting, “the progress achieved in the quarter was expected and has laid the groundwork for an exciting 2026. Growth in prepared foods is important as it grows our customers’ business, expands the reach of our brands and utilizes a sizeable portion of our raw material availability.”
As such, he said, “we see significant opportunities ahead to drive growth and improve profits. Our conviction in this multi-year opportunity to expand profitability in prepared food remains strong.”
