VOL. XCIV, NO. 247
★ WIDE MOAT STOCKS & COMPETITIVE ADVANTAGES ★
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Wednesday, January 14, 2026
Hormel Foods Corporation
HRL · New York Stock Exchange
Weighted average of segment moat scores, combining moat strength, durability, confidence, market structure, pricing power, and market share.
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Overview
Hormel Foods is a U.S.-based branded packaged foods company reporting three segments: Retail (~62% of FY2025 sales), Foodservice (~33%), and International (~6%). The moat is mostly demand- and distribution-driven: a portfolio of trusted brands plus breadth of product line and sales execution; Foodservice adds a direct-selling organization and solutions-based offerings. Competitive intensity is high and pricing power is moderated by retailer/distributor bargaining and commodity cost volatility. Key risks include private label trade-down, shifting consumer preferences, food safety/recall events, and trade/FX dynamics in international markets.
Primary segment
Retail
Market structure
Competitive
Market share
—
HHI: —
Coverage
3 segments · 5 tags
Updated 2026-01-11
Segments
Retail
U.S. branded packaged foods sold through retail channels (grocery, mass, club, natural, drug, dollar/discount, e-commerce)
Revenue
61.6%
Structure
Competitive
Pricing
moderate
Share
—
Peers
Foodservice
U.S. foodservice proteins and prepared foods sold to distributors and operators (restaurants, hospitality, healthcare, education, convenience)
Revenue
32.6%
Structure
Competitive
Pricing
moderate
Share
—
Peers
International
International branded foods and exports sold through retail and foodservice channels (including China and Brazil operations and JVs)
Revenue
5.9%
Structure
Competitive
Pricing
weak
Share
—
Peers
Moat Claims
Retail
U.S. branded packaged foods sold through retail channels (grocery, mass, club, natural, drug, dollar/discount, e-commerce)
Revenue share computed from FY2025 segment net sales: Retail $7.455B of total $12.106B. Operating profit share computed from FY2025 adjusted segment profit: Retail $496.0M of total $1.134B (Retail+Foodservice+International).
Brand Trust
Demand
Brand Trust
Strength
Durability
Confidence
Evidence
Portfolio of long-established brands supports consumer trust and repeat purchases, helping defend premium/value-added positioning versus private label in many categories.
Erosion risks
- Private label substitution in value segments
- Consumer shift away from processed meats toward fresh/less-processed proteins
- Food safety incidents or recalls harming brand perception
Leading indicators
- Category-level branded share vs private label
- Net price realization vs promo intensity
- Brand health metrics (awareness, preference) and repeat rates
Counterarguments
- Retailers can pressure pricing and shelf space, limiting brand leverage
- Competing national brands can match quality and marketing spend
Distribution Control
Supply
Distribution Control
Strength
Durability
Confidence
Evidence
Broad coverage across major retail formats (including mass/club/dollar and e-commerce) plus sales execution helps maintain availability and shelf presence across channels.
Erosion risks
- Retail consolidation increases buyer leverage
- Growth of direct-to-consumer and marketplace models that reduce shelf-space advantage
- Slotting/trade spend inflation
Leading indicators
- All-commodity volume and volume by channel
- Distribution metrics (ACV), SKU rationalization outcomes
- Trade spend as % of sales
Counterarguments
- Most large CPG peers also have broad distribution coverage
- Shelf space is contestable and can shift quickly with consumer trends
Scope Economies
Supply
Scope Economies
Strength
Durability
Confidence
Evidence
A broad, multi-category product line enables cross-selling, retailer assortment coverage, and manufacturing/innovation leverage across brands and formats.
Erosion risks
- Brand portfolio complexity can dilute focus and marketing ROI
- Category-specific down-cycles can offset portfolio benefits
- Retailers may prefer fewer, faster-moving SKUs
Leading indicators
- Number of categories with share gains
- Innovation hit-rate (new product contribution)
- Retailer assortment breadth for key accounts
Counterarguments
- Large diversified CPG peers also offer broad portfolios
- Portfolio breadth does not guarantee margin resilience if categories commoditize
Foodservice
U.S. foodservice proteins and prepared foods sold to distributors and operators (restaurants, hospitality, healthcare, education, convenience)
Revenue share computed from FY2025 segment net sales: Foodservice $3.942B of total $12.106B. Operating profit share computed from FY2025 adjusted segment profit: Foodservice $554.6M of total $1.134B (Retail+Foodservice+International).
Service Field Network
Supply
Service Field Network
Strength
Durability
Confidence
Evidence
A dedicated direct-selling organization and broad channel presence support relationship-driven selling and menu integration with operators and distributors.
Erosion risks
- Distributor consolidation reduces supplier leverage
- Operators trade down or switch suppliers in downturns
- Higher input costs that cannot be fully passed through
Leading indicators
- Foodservice organic volume growth
- Customer retention / mix shift to value-added solutions
- Direct sales coverage (headcount) and win rates
Counterarguments
- Many competitors have comparable sales coverage and distributor relationships
- Foodservice contracts can be rebid frequently; switching costs can be low
Scope Economies
Supply
Scope Economies
Strength
Durability
Confidence
Evidence
An extensive range of solutions-based products supports one-stop purchasing and allows bundling across proteins and prepared foods for operator needs.
Erosion risks
- Operators simplify menus and reduce SKU count
- Category commoditization reduces differentiation of value-added items
- Private label offerings from distributors
Leading indicators
- Share of sales from value-added/customized solutions
- Average gross margin in Foodservice segment
- Number of categories with growth (bacon, pepperoni, prepared proteins, etc.)
Counterarguments
- Broadline distributors can source across many suppliers, reducing value of any single vendor's breadth
- Competitors may match breadth through acquisitions and co-manufacturing
International
International branded foods and exports sold through retail and foodservice channels (including China and Brazil operations and JVs)
Revenue share computed from FY2025 segment net sales: International $0.709B of total $12.106B. Operating profit share computed from FY2025 adjusted segment profit: International $83.3M of total $1.134B (Retail+Foodservice+International).
Distribution Control
Supply
Distribution Control
Strength
Durability
Confidence
Evidence
Local operations plus joint ventures/equity investments and royalty arrangements can improve market access and channel reach versus purely export-only models.
Erosion risks
- Geopolitical/trade restrictions and FX volatility
- Execution risk in JV/partner models
- Local competitors with stronger distribution in specific markets
Leading indicators
- Net sales and volume growth in China
- International segment margin and impairment signals
- Export volumes for key products (e.g., SPAM, pork exports)
Counterarguments
- Distribution advantages can be replicated by local incumbents
- JVs/partners may limit control and economics compared to owned distribution
Brand Trust
Demand
Brand Trust
Strength
Durability
Confidence
Evidence
Brand-led products (notably SPAM) can travel internationally and create repeat demand, but competitiveness varies by country and category.
Erosion risks
- Local taste preferences limit brand transferability
- Competitive pressures in key markets (e.g., Brazil)
- Trade disruptions affecting exports
Leading indicators
- SPAM export volumes and pricing
- Market share trends in focus geographies
- Brand investment and distribution expansion pace
Counterarguments
- International consumers may be less loyal to imported brands due to price sensitivity
- Local brands and private label can undercut pricing and win shelf space
Evidence
...delivering high-quality, trusted food products across a diverse portfolio of brands...
Management explicitly frames the portfolio as 'trusted' and highlights key brands (e.g., Planters, SPAM, Jennie-O, Skippy, Applegate).
...provide high quality products that possess strong brand recognition...
Connects product quality and brand recognition to the company's value proposition.
...sold predominantly in retail channels, including grocery stores, mass merchandisers, club stores... and e-commerce providers...
Evidence of multi-channel distribution footprint for Retail segment.
...a dedicated network of direct and indirect sales personnel...
Supports the execution layer behind distribution: direct/indirect sales coverage and customer service.
All operating segments compete on the basis of... breadth of product line...
Explicitly identifies breadth of product line as a key competitive dimension.
Showing 5 of 13 sources.
Risks & Indicators
Erosion risks
- Private label substitution in value segments
- Consumer shift away from processed meats toward fresh/less-processed proteins
- Food safety incidents or recalls harming brand perception
- Retail consolidation increases buyer leverage
- Growth of direct-to-consumer and marketplace models that reduce shelf-space advantage
- Slotting/trade spend inflation
Leading indicators
- Category-level branded share vs private label
- Net price realization vs promo intensity
- Brand health metrics (awareness, preference) and repeat rates
- All-commodity volume and volume by channel
- Distribution metrics (ACV), SKU rationalization outcomes
- Trade spend as % of sales
Curation & Accuracy
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