Digital Chicken

Leading experts have been warning firms for years to move into the digital era sooner than later. Prodded in part by COVID-19, the country’s top meat producer has apparently heard the message loud and clear.

In a strong step toward the future of a changing industry, Tyson Foods tapped its current president Dean Banks—a former top Silicon Valley tech executive—to become CEO. As a rule, meat production may seem low tech, but COVID-related issues and consumer shifts toward plant-based foods have proven the critical need for faster automation and innovation.

Indeed, the announcement came during the firm’s third-quarter earnings results, which beat analyst expectations but included more than $300 million in pandemic-related costs alone. Along with health and safety measures, the pandemic hit every part of Tyson’s supply chain cost, from increased animal-feed prices to fewer restaurant orders to a decline in production capacity. “They realized the need to move to automation quicker” to make that production more sustainable and scalable, says Christian Hasenoehrl, a Korn Ferry senior client partner and a global account leader.

To be sure, Tyson realized this before the pandemic and before most of its competitors—this week’s announcement was set in motion when the food giant appointed its soon-to-be-CEO to its board in 2017. The company then named him president in December to gain some operational insight in preparation for his eventual elevation to CEO. “Among his board remits was to help lead the future direction of the company and how tech enables that,” says Hasenoehrl.

Cheryl D’Cruz-Young, a Korn Ferry senior client partner who leads the firm’s Chief Procurement Officers practice, says given the complexity of the food supply chain, success will be as much about talent and culture as it is technology. “At the scale at which Tyson operates,” she says, “luring talent with an entrepreneurial, tech-pioneer attitude is going to be critical.”

It’s a problem all meat producers face: a confluence of factors—among them the industry’s poor and outdated reputation, lack of diversity, rural locales, and unclear career paths—make attracting and retaining younger, digitally savvy talent a challenge. At the same time, an entirely new set of competitors is rising up to cater to new ways of shopping for food, like meal-kit deliveries, and a movement toward plant-based meat alternatives.

Tyson, which also produces beef and pork, has done well thus far. In addition to its new CEO, the company in 2017 recruited its chief technology officer from a Silicon Valley firm. It was also among the first investors in the plant-protein start-up Beyond Meat, using the investment as a learning ground to launch its own plant-based unit. Similar investments made through its roughly $150 million venture fund provide a window into new consumer trends, digital innovation, and talent, says Hasenoehrl.

“The food industry is going into unchartered territory,” he says. “It needs leaders with a growth mindset.”