Smithfield Foods Inc at Bank of America Consumer & Retail Conference Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Peter Galbo - BofA Securities Inc - Analyst : Great. So Shane, just to kick things off, this is Smithfield's second iteration as a public company. You've been with the company in both forms. I think the big question coming out of the IPO was just why was now the right time to go public?

Question: Peter Galbo - BofA Securities Inc - Analyst : And Shane, maybe what would be just helpful -- look, this is the first kind of public forum that we've had. You've obviously spent a number of years with the company, and you've seen it kind of from all angles, having run Europe, having been in the US. What's the biggest difference that you see today with that field relative to when you first joined?

Question: Peter Galbo - BofA Securities Inc - Analyst : Thanks for that, Shane. So I'd like to pivot the conversation to kind of four really big macro topics. And as it relates to you guys, I think there's been a lot of questions that have come out since the IPO dominating the conversation. So maybe we can start with tariffs. Pork, obviously, is a large globally traded commodity. You have some exposure to China. You have some exposure to Mexico. But even just broader, your thoughts around the tariff environment and what it could mean for the industry and maybe for you guys specifically?

Question: Peter Galbo - BofA Securities Inc - Analyst : And I'd be remiss if I didn't ask as well, and I'm sure it's a much smaller piece, but on Canada, I think there were some headlines out about maybe some offal product going to Canada. Just kind of what's the latest there?

Question: Peter Galbo - BofA Securities Inc - Analyst : Nothing related to tariff. Got it. Okay. So that takes care of, I think, the first pillar of what we've been hearing. Maybe to pivot, and this has been a much larger industry question, again, with a lot of trade press around it, has been how the industry is going to grapple with labor and immigration. And specifically, I think the question around legal immigrants who are here on temporary visas or have worker status that may see that status change. And again, it seems like a moving target, but how do you feel the industry is prepared potentially to grapple with that level of change?

Question: Peter Galbo - BofA Securities Inc - Analyst : Great, thanks for that. And before we turn maybe to more fun topics, I think the last kind of big macro piece that's come up quite a bit has been the ownership structure. It was really important during the process when we visited with you. I think you made it very clear: we're a US company; the importance you have to the community in Smithfield. But just juxtaposing that against the current administration's view on specifically ownership of agricultural assets by China, your relationship with WH and the ownership structure there, what do you see as the path forward? Is there a dialogue that's ongoing as you all think about where the administration can move on specifically Chinese ownership of agricultural?

Question: Peter Galbo - BofA Securities Inc - Analyst : Great. And I know we're still waiting on official 4Q results. We did get the flash numbers, but we'll be talking on March 25.

Question: Peter Galbo - BofA Securities Inc - Analyst : Great. So I do want to pivot now just to a much broader topic, and that is what seems like an insatiable appetite of consumers for protein. And we have a discussion internally about, look, we're all trying to consume our body weight in grams of protein, however format that comes on a daily basis.

Question: Peter Galbo - BofA Securities Inc - Analyst : And we're in Miami. They had -- I don't know if anybody had the media noches last night at the hour, but those were -- we've been pork forward at this conference. So I just -- I want to get your perspective on the advantages you see to the portfolio of consumers moving more towards a protein-rich diet. And maybe that's GLP-1 driven, maybe that's more dietary trend driven as a first point. And then maybe you can juxtapose that against what we're hearing out of MAHA and RFK around ultra-processed foods as it relates to your portfolio and some of the products that you compete with?

Question: Peter Galbo - BofA Securities Inc - Analyst : And maybe before we dive into kind of the business in each of the segments, one question that we just get as a broader part of our protein coverage is kind of advantages that each of the animal proteins have, where we are in the cycle. So just what advantages do you see today that pork has relative to beef and chicken in the current environment? Maybe that's a supply cycle dynamic, maybe that's a demand perspective, but what are the advantages that you see for pork?

Question: Peter Galbo - BofA Securities Inc - Analyst : And just supply dynamics, just kind of can you compare this pork market relative to what you've seen in past cycles?

Question: Peter Galbo - BofA Securities Inc - Analyst : So let's maybe pivot then to packaged meats. It's kind of the value driver of the business. We talked about that 10-year span where you were maybe away from the US public eye, the expansion opportunity that you actually realized in the business. Just talk a little bit about some of the actions that you took specifically in packaged meats. And I think one of the big questions we get back from folks is just what's the opportunity left kind of going forward?

Question: Peter Galbo - BofA Securities Inc - Analyst : And maybe we can talk about innovation within packaged meats. It's a category, frankly, that I think has been kind of sleepy for quite a period of time. And you guys maybe have been the outlier in that. You've brought whether it's packaging solutions, whether it's

Question: Peter Galbo - BofA Securities Inc - Analyst : Yes, yes.

Question: Peter Galbo - BofA Securities Inc - Analyst : And maybe just the last one on packaged meats. Obviously, the deli category went through major disruption over the summer. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 12, 2025 / 1:40PM, SFD.OQ - Smithfield Foods Inc at Bank of America Consumer & Retail Conference

Question: Peter Galbo - BofA Securities Inc - Analyst : Just in your conversations with the big customers, clearly, there's been some opportunities. Maybe it's been on Prime Fresh. Maybe it's been on some of the other premium brands that you have. But you've been able to take a fair amount of share. Just how kind of sustainable do you see that? And what's just been the overall consumer attitude to the category in light of kind of what transpired over the summer?

Question: Peter Galbo - BofA Securities Inc - Analyst : Great. I just want to pause there quickly to see if there's any questions in the audience before I ask about hog production because I want to talk about it.

Question: Peter Galbo - BofA Securities Inc - Analyst : Sure. Here we go. Unidentified Participant Bullish on pork, by the way. That's the takeaway from this. Shane, thanks for taking the time with us. Just on the packaged meats, getting back to that for a sec, I understand the margins have doubled, right? I think you've talked a little bit about the SKUs and REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 12, 2025 / 1:40PM, SFD.OQ - Smithfield Foods Inc at Bank of America Consumer & Retail Conference maybe the mix being different. And Oscar Mayer has really struggled with Lunchables, some of it footfalled on their own, some of it just -- some stories written, I guess, about it. So are kids an opportunity in terms of what's effectively like a charcuterie board for kids? Is there an opportunity for Smithfield there? It's a high-margin product. Is that the type of --

Question: Peter Galbo - BofA Securities Inc - Analyst : All right. I think we have to cut it there. We'll save hog production for the next discussion. But Shane, thanks so much for being here. I really appreciate it.