KFT Mondelez International, Inc. (MM)

Hormel Foods Corporation (HRL) recently announced new environmental goals based on key sustainability metrics and improvements across last year goals. These are the company’s second set of environmental goals, which encompasses new packaging, water, solid waste, air and energy issues effective fiscal 2012.

With respect to the first set of five-year goals ended fiscal 2011, the company surpassed the water reduction, packaging and solid waste minimization program -- reducing packaging by a total of 21.8 million pounds and beating the water reduction goal by 15%. Progress on the first set of five-year goals now throws a greater challenge and a fresher look at the long established policies and procedures.

The new environmental goals will now be measured against base year 2011 at the company-owned and international manufacturing locations. The set of goals achieved by Hormel, alongside the new targets across the strategic environmental metrics, are listed here:

According to the first set of goals, the company reduced packaging by an average of 4.4 million pounds per year and a total of 21.8 million pounds by 2011. In times ahead, Hormel hopes to reduce product packaging by 25 million pounds by 2020.

By 2011, the company reduced water consumption by 15% compared to 2006 levels and reduced water usage by 11% in 2010 and 15% in 2011. They now look forward to reducing 10% of water use by 2020.

Turning toward solid waste, Hormel’s recycling rate was 46% at the end of fiscal year 2011 compared with 41% at the end of 2010. The company reduced solid waste to landfills by 29% in 2011 compared to 2006 levels. Presently, the new target calls for 10% reduction of solid waste sent to landfill by 2020.

Air emissions targets during the first set of environmental goals for 2011 decreased greenhouse gas emissions by 5% compared to fiscal year 2009; setting new goals to reduce 10% of greenhouse gas emissions by 2020.

Hormel witnessed indirect energy consumption increase by 1% in fiscal year 2011 compared to 2006 levels. Direct energy consumption decreased by 1% compared to 2006 levels, setting a new goal to reduce 10% of non-renewable energy use by 2020.

Hormel Foods also implemented several significant capital projects targeted to reduce energy intensity. The company vows to continue with such ongoing reduction efforts in the years ahead.

Based in Austin, Minnesota, Hormel Foods Corporation is a leading manufacturer and marketer of various meat and food products in the United States and internationally. The company faces stiff competition from ConAgra Foods Inc. (CAG), Kraft Foods Inc. (KFT) and Tyson Foods Inc. (TSN).

We currently maintain a long-term Neutral recommendation on the stock. Hormel has a Zacks #4 Rank, which translates into a short-term (1-3 months) Sell rating.

 
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