Tyson Foods (NYSE:TSN) issued a press release announcing a new strategy aimed at health-conscious consumers: The company will no longer use antibiotics on its chickens. From a marketing and branding point of view, Tyson's move makes a huge amount of sense.
The use of antibiotics on animals meant for human consumption has always carried some controversy, and the debate over safety won't end anytime soon. Today, consumers demand nutritious, high-quality products, and they're beginning to view natural and/or organic foods as superior options to conventionally processed fare. Companies like Whole Foods (NASDAQ:WFMI) and Wild Oats (NASDAQ:OATS) have certainly taken full advantage of this trend. Just last week, I wrote an article centering on Kellogg's (NYSE:K) move to make healthier cereals for the company's younger fans.
Tyson is betting that consumers' reluctance to antibiotic-laced food is not just some Atkins-like fad. This is more about feeling confident about the safety of our food than trying to shave off a few pounds. Tyson realizes that there's no value in fighting the tide anymore. Fast-food purveyors such as McDonald's (NYSE:MCD) and Yum! Foods (NYSE:YUM) have put up with pressure in recent years to change their recipes and offer menu selections that won't wreak havoc on the heart (not to mention precautions relating to mad cow disease and the avian flu).
Denying chickens their antibiotic fix doesn't come free. Tyson says that people will pay a higher price for its poultry. This is a risk, especially since the consumer-products industry is already struggling to pass higher costs along to buyers. But I just don't see it being a problem; Tyson says its research shows that consumers are willing to pay a premium for peace of mind when it comes to the foods they eat.
Overall, I think this is a smart idea for Tyson. It should add value to the brand, and the risk/reward consideration regarding the higher prices the company will have to charge is quite favorable. The zeitgeist today demands quality food that's safe to eat. Antibiotic-raised chickens arguably don't fit that bill anymore, and I think conveying Tyson's recent decision will provide the food distributor with an excellent catalyst to distinguish itself from rivals in consumers' minds.
More tasty Takes on Tyson Foods:
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Fool contributor Steven Mallas owns none of the companies mentioned. As of this writing, he was ranked 12,046 out of 30,759 in the Motley Fool CAPS system. Don't know what CAPS is? Check it out. The Fool has a disclosure policy.
