Steve Binder has worked at Hormel Foods for 38 years, holding various leadership roles within the Refrigerated Foods business unit. As President of Hormel Business Units, he oversees three distinct businesses - a branded food business, a fresh pork business, and an internal supplier business that provides raw materials to other Hormel segments. Under Binder's leadership from 2011-2016, Refrigerated Foods has grown value-added sales by 5% CAGR, improved value-added profit margins by over 700 basis points, and reduced exposure to volatile commodity pork margins.

1. Steve Binder
Executive Vice President,
President, Hormel Business Units Hormel Foods Career History
2011: President, Hormel Business Units
2010: Executive Vice President, Refrigerated Foods
2007: Group Vice President, Refrigerated Foods
2000: Group Vice President, Foodservice
1998: Vice President, Foodservice
Favorite Hormel Foods Product
38 Years with
Hormel Foods

2. The Journey of
Steve Binder
Executive Vice President
President, Hormel Business Units
Refrigerated Foods

3. Meat
Products
Affiliated
Businesses
Fresh
Pork
Foodservice
Grocery Products Refrigerated Foods
MegaMex
Foods
Consumer
Product
Sales
Simple
Meals
Nut Butters
Business Units
Hormel

4. 2011 2016
-1100bps
Pork Operating Margins
as a % of Refrigerated
Foods Segment Profit
2011 2016
+5% CAGR
Value-Added Sales
2011 2016
Value-Added Profit Margin
Growing Our
Value-Added Sales
Over
700bps
Improving Value-Added
Profitability
Reducing Our Exposure to
Commodity Margins
Refrigerated Foods
The Journey Of
Internal data

5. Hogs
Pork Raw
Materials
Branded,
Value-Added
Products
Commodity
Products
Transfers
to Other
Segments
Branded
Food Business
Fresh Pork
Business
Internal
Supplier
Three Distinct Businesses
Refrigerated Foods:
1
2
3

6. Retail & Foodservice Fresh Pork
• Complements branded
business in retail and
foodservice
• Outlet for excess products
Provision Sales
• By-products
• Offal
A Fresh Pork Business
Refrigerated Foods:
Hogs
Pork Raw
Materials
Branded,
Value-Added
Products
Commodity
Products
Transfers
to Other
Segments

7. From 2011-2016, Pork Operating
Margins have averaged 15% of Total
Refrigerated Foods Segment Profit
Financial Impact
Hog and Pork Procurement:
2011 2016
-1100bps
TRIM
Net Buyer Net Seller Balance
Pork Operating Margins as a % of
Refrigerated Foods Segment Profit
Internal data

8. • Strive for a contract mix
that reduces cost volatility
• Generally does not track the
quoted western corn belt
hog market
• Use of producer incentives
to help deliver consistent
hog characteristics
Inputs for Value-Added Business
Hog Procurement:
Goal of our hog procurement
is to source the ideal hog for
our value-added business

9. Our Harvest Facilities
Investing In
GROWING OUR RETAIL BUSINESS
Internal data
AUSTIN PLANT
CURRENT FOOTPRINT ANIMAL HANDLING
IMPROVEMENTS
COOLING
EXPANSION

10. • Timing of new hog supplies
• Timing of new capacity
• Strength of domestic demand
• Strength of US exports
• Pricing of competing proteins
We Are Watching
Market Factors
AN ESTIMATED
12% INCREASE
IN CAPACITY

11. Supplier to Other Segments
Refrigerated Foods: An Internal
Hogs
Pork Raw
Materials
Branded,
Value-Added
Products
Commodity
Products
Transfers
to Other
Segments
Internal data
Fresh Pork Exports

12. Branded Food Business
Hogs
Pork Raw
Materials
Branded,
Value-Added
Products
Commodity
Products
Transfers
to Other
Segments
Branded, Value-Added Business
Refrigerated Foods:

13. Hogs
Pork Raw
Materials
Branded,
Value-Added
Products
Commodity
Products
Transfers
to Other
Segments
Externally
Purchased Raw
Materials
Pork
Beef
Turkey
Chicken
Diversification Beyond Hogs
Meat Protein Purchases:
VALUE OF ANNUAL PURCHASES*
*Excluding Jennie-O Turkey Store

14. 2011 2016
+5%
Internal data
2011 2016
Over
700bps
2011 2016
+2%
Substantially Over the Last 5 Years
Value-Added Sales & Margins Have Increased
Total Sales Value-Added Sales Value-Added Profit Margin
REFRIGERATED FOODS

15. Growing Our
Value-Added Sales
Improving Value-Added
Profitability
Reducing Our Exposure to
Commodity Pressures
Refrigerated Foods
The Journey Of
Brand Building
Direct Sales Force
Innovation
Culture
Analytics
Growth Strategies

16. The Journey of
Steve Binder
Executive Vice President
President, Hormel Business Units
Refrigerated Foods