OPUS International
Industry Update - August 2026

Employment Weakens Across Food Manufacturing and Foodservice
The U.S. labor market weakened considerably in July, with total nonfarm payroll employment declining by 23,000 jobs and the unemployment rate holding at 4.1%.
Food-related employment was notably softer:

• Food manufacturing lost 6,200 jobs in July, bringing industry employment to approximately 1.76 million
• Food services and drinking places lost 26,100 jobs
• Overall leisure and hospitality employment declined by 40,000 jobs
• Accommodation was a relative bright spot, adding approximately 2,600 jobs

Despite the near-term decline, the longer-term employment outlook for food and beverage manufacturing remains favorable. The Bureau of Labor Statistics projects food and beverage manufacturing will add more jobs through 2034 than any other U.S. manufacturing industry.

Food Manufacturing Outlook
Food manufacturers continue balancing:

• Consumer price sensitivity and private-label competition
• Elevated beef and other protein costs
• Commodity and input-cost volatility
• Pressure on branded-food volumes
• Labor availability and productivity
• Increased demand for protein and better-for-you products

The market remains highly uneven. Protein, convenience and certain better-for-you categories continue to attract investment, while many traditional packaged-food companies are struggling to generate meaningful volume growth.

Company Highlights
Tyson Foods
Tyson reported fiscal third-quarter results on August 3, with continued strength in Chicken and Prepared Foods helping offset challenges elsewhere in the portfolio.
Highlights include:

• Quarterly sales of $13.9 billion
• GAAP operating income increased 39% year-over-year
• Adjusted operating income increased 8% to $547 million
• Adjusted EPS increased 9% to $0.99
• Chicken has now delivered seven consecutive quarters of growth
• Tyson expects fiscal 2026 Chicken adjusted operating income of $1.90-$2.05 billion
• Prepared Foods adjusted operating income is expected to reach $1.30-$1.35 billion

Beef remains Tyson’s primary challenge as tight cattle supplies and elevated cattle costs continue to pressure profitability. On August 13, Tyson also announced a restructuring of its beef manufacturing network designed to improve the long-term performance of the business.

Kraft Heinz
Kraft Heinz reported second-quarter results on August 5 that illustrate many of the pressures facing traditional packaged-food manufacturers.
Highlights include:

• Net sales of approximately $6.3 billion, down 1.4%
• Organic net sales declined 1.3%
• Pricing increased 1.3%, but volume/mix declined 2.6%
• North American net sales declined 2.7%
• Emerging Markets sales increased 10.4%
• Free cash flow increased 10.3% to $1.7 billion

The company raised its organic sales outlook but continues to face weak North American volumes. Kraft Heinz is responding by increasing incremental investment in its brands by another $100 million, bringing planned incremental investment to approximately $700 million in 2026.

Conagra Brands
Conagra reported fiscal fourth-quarter and full-year results in July, highlighting similar pressure across traditional packaged foods.
Highlights include:

• Fourth-quarter net sales increased 3.6%
• Organic quarterly sales were approximately flat
• Full-year sales declined 2.9% to $11.3 billion
• Full-year organic net sales declined 0.4%
• Adjusted operating margin was 11.3% for the year

Higher productivity helped results, but inflation, lower organic sales and unfavorable operating leverage continued to pressure profitability.

Hormel Foods
Hormel will report fiscal third-quarter results on August 27, making it one of the next major indicators for the food manufacturing sector.
Investors will be watching performance across value-added proteins, foodservice, international markets and branded products, as well as the company’s progress on margins and operational improvement.

M&A Activity Accelerates Around Protein and Snacking
Food industry M&A remains active, but buyers are increasingly targeting businesses aligned with faster-growing consumer trends.
One of the largest recent transactions came in July, when Intersnack agreed to acquire Utz Brands’ publicly held shares for $14.25 per share, representing approximately a 91% premium to Utz’s July 20 closing price. The transaction significantly expands Intersnack’s position in the U.S. salty-snack market.
In August, Second Nature Brands, backed by CapVest, completed its acquisition of Tillamook Country Smoker, adding a major protein-snacking platform to a portfolio that already includes Kar’s Nuts, Second Nature Snacks, Sahale Snacks, Sanders, Brownie Brittle and Voortman.
Tillamook Country Smoker had more than tripled revenue and EBITDA under its previous ownership, benefiting from nationwide distribution, expanded manufacturing capacity and strong demand for clean-label and zero-sugar meat snacks.
Recent transaction activity suggests buyers are particularly interested in:

• High-protein foods and snacks
• Clean-label products
• Better-for-you brands
• Snacking
• Functional foods
• Premium ingredients
• International growth opportunities
• Brands with scalable manufacturing and distribution

Industry Trends

Protein Continues to Lead
Protein remains one of the industry’s strongest themes. Tyson’s chicken performance and the acquisition of Tillamook Country Smoker both reinforce consumer demand for convenient, protein-rich foods. Chicken remains particularly attractive as an affordable alternative to increasingly expensive beef.

Private Label and Value Are Challenging Traditional Brands
Consumers remain highly price-conscious. Private-label products continue taking share in several categories as retailers improve quality, packaging and product innovation. Large branded manufacturers are responding with increased marketing, innovation and promotional activity.

Volume Growth Is Becoming More Important
Pricing helped food manufacturers protect margins during the inflationary period, but the industry’s challenge is increasingly shifting toward restoring unit volumes. Kraft Heinz’s 2.6% decline in volume/mix illustrates the difficulty of relying on additional pricing when consumers are already sensitive to grocery costs.

M&A Is Following Consumer Demand
Acquisition activity is increasingly concentrated in high-protein, clean-label, better-for-you and differentiated snack businesses. These categories are attracting capital even while many traditional packaged-food brands face slower growth.

Automation and Productivity Remain Priorities
With margins under pressure from labor, commodities and transportation costs, manufacturers continue investing in automation, plant efficiency and supply-chain productivity. Operational leadership capable of improving throughput, labor efficiency and manufacturing margins remains increasingly valuable.

​Food Manufacturing’s Long-Term Labor Outlook Remains Positive
Despite July’s loss of 6,200 food manufacturing jobs, BLS projects food and beverage manufacturing employment will exceed 2.2 million workers by 2034, making it the manufacturing sector expected to add the most jobs over the decade.