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Item 1. Business

2025-12-05 compared with 2024-12-05 · 57 added, 82 removed, 64 unchanged (68% of the section changed)

General Development of Business

Hormel Foods Corporation, a Delaware corporation (collectively, the "Company", "we," "us," and "our"), was founded by George A.

Hormel Foods Corporation, a Delaware corporation, was founded by George A.

Hormel in 1891 in Austin, Minnesota, as Geo.

Hormel & Company.

The Company started as a processor of meat and food products and continues in this line of business with emphasis on the manufacturing and distribution of branded, value-added consumer items.

The Company builds on its founder’s legacy of innovation, quality, and integrity with focus on its purpose statement — Inspired People.

Inspired Food.™ The Company has continually expanded its product portfolio through organic growth and acquisitions.

Today, the Company is a global branded food company bringing some of the most trusted and iconic brands to tables across the globe with approximately $12 billion in annual revenue generated from more than 80 countries.

The Company originated as a processor of meat and food products and continues in this line of business today.

The Company has expanded its product portfolio through organic growth and acquisitions to become a global branded food company with more than $12 billion in annual revenue.

The Company is built on a foundation of innovation and integrity and a commitment to delivering high-quality, trusted food products across a diverse portfolio of brands and product solutions including Planters ® , SPAM ® , Jennie-O ® , Skippy ® , Applegate ® , Wholly ® , Hormel ® Black Label ® , Fontanini ® , Bacon1 ® , Hormel ® pepperoni, and more than 30 other beloved brands.

The Company is a member of the S&P 500 Index and the S&P 500 Dividend Aristocrats.

When used in this report, the terms "we," "our," "us," and the "Company" mean Hormel Foods Corporation and its subsidiaries, collectively, unless the context otherwise requires or indicates.

Description of Business

The Company currently operates with the following three operating and reportable segments:

The Company currently operates with the following three reportable segments:

Retail, Foodservice, and International.

The Retail segment consists primarily of the processing, marketing, and sale of food products sold predominantly in the retail market in the United States.

This segment also includes the results from the Company’s MegaMex Foods, LLC joint venture.

The Foodservice segment consists primarily of the processing, marketing, and sale of food products for foodservice, convenience store, and commercial customers located in the United States.

The Retail segment consists primarily of the processing, marketing, and sale of food products sold predominantly in retail channels, including grocery stores, mass merchandisers, club stores, natural food chains, drug, dollar and discount chains, and e-commerce providers in the United States (U.S.).

This segment also includes the results from the Company’s MegaMex Foods, LLC (MegaMex Foods) joint venture.

The Foodservice segment consists primarily of the processing, marketing, and sale of food products to distributors and operators across a wide range of providers of food away from home, including restaurants, hospitality, healthcare, K-12, college and universities, and convenience stores in the U.S.

International

The International segment processes, markets, and sells Company products internationally.

This segment also includes the results from the Company’s international joint ventures, international equity method investments, and international royalty arrangements.

Net sales to unaffiliated customers, segment profit, and certain other financial information by segment are reported in Note P - Segment Reporting of the Notes to the Consolidated Financial Statements and in Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The International segment processes, markets, and sells the Company's products through retail and foodservice channels internationally.

This segment also includes the results from the Company’s international joint ventures, equity method investments, and royalty arrangements, as well as operations in China and Brazil.

Net sales, segment profit, and certain other financial information by segment are reported in Note Q - Segment Reporting of the Notes to the Consolidated Financial Statements and in Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Products and Distribution

The Company develops, processes, and distributes a wide array of food products in a variety of markets and manufactures its products through various processing facilities and trusted co-manufacturers.

The Company’s products primarily consist of meat, nuts, and other food products sold across multiple distribution channels, such as United States (U.S.) retail, U.S.

The Company’s products primarily consist of meat, nuts, and other food products sold across multiple distribution channels, such as U.S.

foodservice, and internationally.

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The Company’s products are sold through its sales personnel, who operate in assigned territories or in dedicated teams serving major customers and who are coordinated from sales offices predominately located in major U.S.

The sales team is also responsible for the product portfolio of MegaMex Foods, LLC (MegaMex Foods), a U.S.

The Company's sales team is also responsible for the product portfolio of MegaMex Foods, a U.S.

based Mexican food company, of which the Company owns a minority interest.

Additionally, the Company utilizes independent brokers and distributors.

Products are primarily distributed by common carrier.

Products are primarily distributed by common carriers.

The Company has a global presence within several major international markets, including Australia, Brazil, Canada, China, England, Indonesia, Japan, Mexico, the Philippines, Singapore, and South Korea.

Distribution of export sales to customers is by third party carriers, while the China and Brazil operations also rely on company-owned and operated delivery systems.

The Company has licensed companies to manufacture various products internationally on a royalty basis.

The Company also has minority positions in food companies in the Philippines (The Purefoods-Hormel Company, Inc., 40 percent holding) and Indonesia (PT Garudafood Putra Putri Jaya Tbk (Garudafood), approximately 30 percent holding).

Distribution of export sales to customers is primarily done by third party carriers, while the China and Brazil operations also rely on company-owned and operated delivery systems.

The Company has licensed other companies to manufacture various products internationally on a royalty basis.

The Company also has minority interests in food companies in the Philippines (The Purefoods-Hormel Company, Inc., 40 percent holding) and Indonesia (PT Garudafood Putra Putri Jaya Tbk (Garudafood), approximately 30 percent holding).

Raw Materials

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The principal raw materials used by the Company include pork, turkey, beef, chicken, and nuts.

The Company takes what it believes is a balanced approach to sourcing its raw materials.

The Company takes a balanced approach to sourcing its raw materials.

To meet its needs for pork raw materials, the Company purchases hogs for the Austin, Minnesota processing facility, enters into long-term supply agreements for pork, and supplements this with spot market purchases of pork.

The majority of the turkeys needed to meet raw material requirements are raised by the Company.

Production costs from raising turkeys are subject to fluctuations in grain prices and fuel costs.

Production costs from raising turkeys are subject to fluctuations in input costs, including grain prices and fuel costs.

To manage input cost risks, the Company uses futures, swaps, and options contracts to hedge a portion of its anticipated purchases.

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As of October 26, 2025, the Company had approximately 20,000 active employees, with over 90 percent located within the U.S.

Approximately 20 percent of employees are covered by collective bargaining agreements.

At fiscal year end, approximately 20 percent of the Company's employees were covered by collective bargaining agreements.

Contracts at two of the Company's facilities, covering approximately 700 employees, expire in the next fiscal year.

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Inspired Food.™ The Company places great importance on the growth, development, and engagement of its team members.

The Company offers competitive compensation packages to its employees and provides a multitude of benefits, including medical, life and disability insurance, contributory and non-contributory retirement savings plans, free post-secondary tuition and tuition reimbursement programs, and two years of tuition-free community and technical college for U.S.

The Company offers competitive compensation packages to its employees and provides a multitude of benefits, including medical, life and disability insurance, contributory and non-contributory retirement savings plans, paid parental leave, tuition reimbursement programs, and two years of tuition-free community and technical college for U.S.

employees’ dependent children.

In fiscal 2024, the Company provided financial support for a new, third-party operated childcare center in Austin, Minnesota, providing a needed service for team members and the Austin community.

The Company believes investing in the education, training, and development of employees contributes to the overall success of the business.

The Company provides learning opportunities for employees through various training courses, including instructor-led internal and external programs and on-the-job training.

The Company considers the tenure of its team members to be an important indicator of overall performance and is proud of its tenure figures.

The Company considers the tenure of its team members to be an indicator of the success of its retention efforts and is proud of its tenure figures.

As of October 26, 2025, approximately 50 percent of the Company’s team members had five or more years of service, and the 38-person officer team had an average of 22 years of service.

Creating an Inclusive Environment

The Company welcomes the diversity, unique skills, thoughts, and experiences of its team members, customers, and consumers.

As of October 27, 2024, the Company’s U.S.

workforce for majority-owned operations was made up of approximately 40 percent female and approximately 60 percent underrepresented minorities.

The Company’s U.S.

salaried employees for majority-owned operations as of October 27, 2024 was made up of approximately 35 percent female and approximately 25 percent underrepresented minorities.

The Company welcomes the unique skills, thoughts, backgrounds, and experiences of its team members, customers, and consumers.

By fostering an inclusive culture, the Company enables every member of the workforce to leverage unique talents and high-performance standards to drive innovation and success.

The Company has twelve employee resource groups (ERGs) that support the Company’s mission to create a workplace where all people feel welcomed, respected, and valued.

The Company has nine employee resource groups (ERGs) that support the Company’s mission to create a workplace where all people feel welcomed, respected, and valued.

These employee-driven groups play a critical role in the Company’s efforts to create an inclusive environment and provide professional development and mentorship opportunities.

Safety, Health, and Wellness

The Company’s dedicated corporate safety department develops and administers company-wide policies to ensure the safety of each employee and compliance with Occupational Safety and Health Administration standards and comparable global requirements internationally.

The corporate safety department also conducts regular audits of Company-owned production facilities to ensure compliance with Company safety policies.

The Company develops and administers policies to ensure the safety of each employee and compliance with Occupational Safety and Health Administration standards in the U.S.

and comparable international requirements.

The Company also conducts regular audits of Company-owned production facilities to ensure compliance with safety policies.

The Company conducts safety training for all team members and, during fiscal 2025, completed approximately 1,200 safety assessments each month.

The Company recognizes that team members perform best when they are healthy, and that optimal performance is necessary for the Company to achieve its key results.

In addition to the health care benefits package, the Company’s Inspired Health program aims to cultivate and maintain a culture of health and wellness that is focused on encouraging and empowering team members to make healthy lifestyle choices through awareness, prevention, and positive health behavior changes.

This program includes biometric screenings, on-site fitness centers and fitness center discounts, an online health university with robust information and resources, a tobacco cessation program, wellness challenges, and confidential health and wellness support.

The Company recognizes that team members perform best when they are healthy, and that optimal performance is necessary for the Company to succeed.

In addition to the health care benefits package, the Company’s wellness programs aim to cultivate and maintain a culture of health and wellness that is focused on encouraging and empowering team members to make healthy lifestyle choices through awareness, prevention, and positive health behavior changes.

This program offers a comprehensive suite of wellness benefits designed to support every aspect of well-being - physical, financial, and professional.

These include tobacco cessation resources, confidential mental health support, family-building assistance, and opportunities for professional development.

Governmental Regulation and Environmental Matters

The Company’s operations are subject to regulation by various governmental agencies which oversee areas such as food safety, workforce mobility, environmental laws, animal welfare, financial and tax regulations, and the processing, packaging, storage, distribution, advertising, and labeling of the Company’s products.

The Company believes it is in compliance with current laws and regulations and does not expect continued compliance to have a material impact on its capital expenditures, earnings, or

competitive position.

The Company believes it is in compliance with current laws and regulations and does not expect continued compliance to have a material impact on its capital expenditures, earnings, or competitive position.

The Company continues to monitor existing and pending laws and regulations and, while the impact of regulatory changes cannot be predicted with certainty, the Company does not expect compliance to have a material adverse effect on the Company’s business.

In addition to compliance with environmental laws and regulations, the Company has set aspirational goals to further improve its sustainability efforts and reduce its environmental impact.

These goals are outlined in the Company’s 20 by 30 Challenge and address topics such as renewable sourcing, reducing organic waste and greenhouse gas emissions, supporting regenerative agriculture, packaging sustainability, and reducing food waste.

The Company’s greenhouse gas emissions reduction targets were validated by the Science Based Targets initiative.

In addition to compliance with environmental laws and regulations, the Company has established guiding principles to support the long-term health of its business and further improve its sustainability efforts and reduce its environmental impact.

Significant Customers

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Sales to the Company’s largest customer, Walmart Inc.

and its subsidiaries (Walmart), accounted for approximately 16 percent of consolidated gross sales less returns and allowances during fiscal 2024.

and its subsidiaries (Walmart), accounted for 15.6 percent of consolidated gross sales less returns and allowances during fiscal 2025.

Walmart is a customer for the Company’s Retail and International segments.

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All operating segments compete on the basis of price, product quality and attributes, brand identification, breadth of product line, and customer service.

Through effective marketing, a dedicated network of direct and indirect sales personnel, and robust quality assurance programs, the Company’s strategy is to provide high quality products that possess strong brand recognition supported by reliable customer service, to support a higher value proposition for customers.

To grow and maintain its competitive position, the Company focuses on meeting consumer preferences, delivering product innovation, and maintaining long-term and lasting relationships with industry partners.

To grow and maintain its competitive position, the Company focuses on meeting customer and consumer preferences, delivering product innovation, and maintaining long-term and lasting relationships with industry partners.

Patents and Trademarks

There are numerous patents and trademarks important to the Company’s business.

As of October 27, 2024, the Company held 22 U.S.

and eight foreign patents.

As of October 26, 2025, the Company has thirteen U.S.-granted and six foreign-granted patents.

Most of the trademarks the Company uses are registered in the U.S.

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Some of the more significant owned or licensed trademarks used by the Company or its affiliates are:

HORMEL, ALWAYS TENDER, APPLEGATE, AUSTIN BLUES, BACON 1, BLACK LABEL, BREAD READY, BURKE, CAFÉ H, CERATTI, CHI-CHI’S, COLUMBUS, COMPLEATS, CORN NUTS, CURE 81, DAN’S PRIZE, DI LUSSO, DINTY MOORE, DON MIGUEL, DOÑA MARIA, EMBASA, FAST ‘N EASY, FIRE BRAISED, FONTANINI, HERDEZ, HORMEL GATHERINGS, HOUSE OF TSANG, JENNIE-O, JUSTIN’S, LA VICTORIA, LAYOUT, LLOYD’S, MARY KITCHEN, MR.

PEANUT, NATURAL CHOICE, NUT-RITION, OLD SMOKEHOUSE, OVEN READY, PILLOW PACK, PLANTERS, ROSA GRANDE, SADLER’S SMOKEHOUSE, SKIPPY, SPAM, SQUARE TABLE, SPECIAL RECIPE, VALLEY FRESH, and WHOLLY.

HORMEL, ALWAYS TENDER, APPLEGATE, AUSTIN BLUES, BACON 1, BLACK LABEL, BREAD READY, BURKE, CAFÉ H, CERATTI, CHI-CHI’S, COLUMBUS, COMPLEATS, CORN NUTS, CURE 81, DAN’S PRIZE, DI LUSSO, DINTY MOORE, DON MIGUEL, DOÑA MARIA, EMBASA, FAST ‘N EASY, FIRE BRAISED, FLASH 180, FONTANINI, HERDEZ, HORMEL GATHERINGS, HOUSE OF TSANG, JENNIE-O, JUSTIN’S, LA VICTORIA, LAYOUT, LLOYD’S, MARY KITCHEN, MR.

PEANUT, NATURAL CHOICE, NUT-RITION, OLD SMOKEHOUSE, OVEN READY, PILLOW PACK, PLANTERS, ROSA GRANDE, SADLER’S SMOKEHOUSE, SKIPPY, SPAM, SPECIAL RECIPE, SQUARE TABLE, VALLEY FRESH, and WHOLLY.

The Company’s patents expire after a term that is typically 20 years from the date of filing, with earlier expiration possible based on the Company’s decision whether to pay required maintenance fees.

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Available Information

The Company makes available its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 on its website at www.hormelfoods.com .

These reports are accessible under the caption, “Investors – Financials – SEC Filings” on the Company’s website and are available as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission (SEC).

These filings are also available on the SEC’s website at www.sec.gov .

The documents are available in print, free of charge, to any shareholder who requests them.

The Company's internet website is hormelfoods.com.

The Company's Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements, and amendments to such documents filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (Exchange Act), are available free of charge on the Investors section of the Company's website (investor.hormelfoods.com) as soon as reasonably practicable after the Company files such material with, or furnishes it to, the U.S.

Securities and Exchange Commission (SEC).

In addition, the SEC maintains a website (sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

Investors should note that the Company currently announces material information to its investors and others using filings with the SEC, press releases, public conference calls, webcasts, or its website (hormelfoods.com).

Information that the Company posts on its website could be deemed material to investors.

The Company encourages investors, the media, and others interested in the Company to review the information it posts on these channels.

The information on the Company's website is not, and shall not be deemed to be, a part hereof or incorporated into this or any of the Company's other filings with the SEC.

FORWARD-LOOKING STATEMENTS

This report contains “forward-looking” information within the meaning of the federal securities laws.

The “forward-looking” information may include statements concerning the Company’s outlook for the future as well as other statements of beliefs, future plans, strategies, or anticipated events and similar expressions concerning matters that are not historical facts.

The Private Securities Litigation Reform Act of 1995 (the Reform Act) provides a “safe harbor” for forward-looking statements to encourage companies to provide prospective information.

The Company is filing this cautionary statement in connection with the Reform Act.

When used in the Company’s Annual Report to Stockholders, other filings by the Company with the SEC, the Company’s press releases, and oral statements made by the Company’s representatives, the words or phrases “should result,” “believe,” “intend,” “plan,” “are expected to,” “targeted,” “will continue,” “will approximate,” “is anticipated,” “estimate,” “project,” or

similar expressions are intended to identify forward-looking statements within the meaning of the Reform Act.

Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results and those anticipated or projected.

In connection with the “safe harbor” provisions of the Reform Act, the Company is identifying risk factors that could affect financial performance and cause the Company’s actual results to differ materially from opinions or statements expressed with respect to future periods.

The following discussion of risk factors contains certain cautionary statements regarding the Company’s business, which should be considered by investors and others.

Such risk factors should be considered in conjunction with any discussions of operations or results by the Company or its representatives, including any forward-looking discussion, as well as comments contained in press releases, presentations to securities analysts or investors, or other communications by the Company.

This report contains forward-looking statements, which are based on the Company's current assumptions and expectations.

These statements are typically accompanied by the words "aim," "anticipate," "believe," "could," “estimate,” "expect," “intend,” "may," "might," “plan,” “project,” "seek," “target,” "will," "would," or similar words or expressions.

The principal forward-looking statements in this report include statements regarding the Company's:

future financial and operational performance, fiscal 2026 outlook, expectations regarding commodity markets and raw material costs, intentions regarding future dividends, expectations regarding the Company's strategic initiatives, including the Transform and Modernize initiative and the Company's recent corporate restructuring plan, expectations for the adequacy of and costs associated with the Company's sources of liquidity, expected compliance with debt covenants, expectations regarding its contractual obligations and liabilities, expectations regarding the impact of new accounting pronouncements, expected contributions and payments related to its pension plan, expectations regarding the return on plan assets, expectations regarding the timing and recognition of compensation expenses, and expectations regarding the outcome of, and adequacy of its reserves for, claims, litigation, and the resolution of tax matters.

All such forward-looking statements are intended to enjoy the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, as amended.

Although the Company believes there is a reasonable basis for the forward-looking statements, its actual results could be materially different.

The most important factors which could cause the Company's actual results to differ from its forward-looking statements are set forth in its description of risk factors included in Part I, Item 1A – Risk Factors to this Form 10-K, which should be read in conjunction with the forward-looking statements in this report.

Though the Company has attempted to list comprehensively these important cautionary risk factors, the Company cautions that other factors may in the future prove to be important in affecting the Company’s business or results of operations.

The Company cautions readers not to place undue reliance on forward-looking statements, which represent current views as of the date made.

Forward-looking statements are inherently at risk to changes in the Company’s business as well as the national and worldwide economic environment.

The risks and uncertainties that could cause actual results to differ from those anticipated or projected include, among other things, risks related to the deterioration of economic conditions;

risks associated with acquisitions, joint ventures, equity investments, and divestitures;

risks and uncertainties associated with intangible assets, including any future goodwill or intangible assets impairment charges;

the risk of disruption of operations, including at owned facilities, co-manufacturers, suppliers, logistics providers, customers, or other third-party service providers;

the risk that the Company may fail to realize anticipated cost savings or operating profit improvements associated with strategic initiatives, including the Transform and Modernize initiative;

risk of loss of a significant contract or unfavorable changes in the Company’s relationships with significant customers;

risk of the Company’s inability to protect information technology systems against, or effectively respond to, cyber attacks, security breaches or other IT interruptions, against or involving the Company’s IT systems or those of others with whom it does business;

risk of the Company’s failure to timely replace legacy technologies;

deterioration of labor relations or labor availability or increases to labor costs;

general risks of the food industry, including those related to food safety, such as costs resulting from food contamination, product recalls, the remediation of food safety events at its facilities, including the production disruption at the Suffolk, Virginia, facility, or outbreaks of disease among livestock and poultry flocks;

fluctuations in commodity prices and availability of raw materials and other inputs;

fluctuations in market demand for the Company’s products, including due to private label products and lower-priced alternatives;

risks related to the Company’s ability to respond to changing consumer preferences, diets and eating patterns, and the success of innovation and marketing investments;

damage to the Company’s reputation or brand image;

risks associated with climate change, or legal, regulatory, or market measures to address climate change;

risks of litigation;

potential sanctions and compliance costs arising from government regulation;

compliance with stringent environmental regulations and potential environmental litigation;

and risks arising from the Company’s foreign operations, including geopolitical risk, exchange rate risk, legal, tax, and regulatory risk, and risks associated with tariffs.

Forward-looking statements speak only as of the date they are made, and the Company does not undertake any obligation to update any forward-looking statement except as otherwise required by law.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business