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Segment Reporting
12 Months Ended
Oct. 25, 2020
Segment Reporting [Abstract]  
Segment Reporting
Segment Reporting
The Company develops, processes, and distributes a wide array of food products in a variety of markets. The Company reports its results in the following four segments: Grocery Products, Refrigerated Foods, Jennie-O Turkey Store, and International & Other. At the beginning of fiscal 2019, the Company aligned all deli businesses, including the Jennie-O Turkey Store deli division, into Hormel Deli Solutions reporting within the Refrigerated Foods segment. In addition, the ingredients business was realigned from the Grocery Products segment to the Refrigerated Foods segment. Periods presented herein have been adjusted to reflect these changes.
 
The Grocery Products segment consists primarily of the processing, marketing and sale of shelf-stable food products sold predominantly in the retail market, along with the sale of nutritional and private label shelf-stable products to retail, foodservice, and industrial customers. This segment also includes the results from the Company’s MegaMex joint venture.
 
The Refrigerated Foods segment consists primarily of the processing, marketing and sale of branded and unbranded pork, beef and poultry products for retail, foodservice, deli, and commercial customers.
 
The Jennie-O Turkey Store segment consists primarily of the processing, marketing and sale of branded and unbranded turkey products for retail, foodservice, and commercial customers.
 
The International & Other segment includes Hormel Foods International which manufactures, markets and sells Company products internationally. This segment also includes the results from the Company’s international joint ventures and royalty arrangements.
 
Intersegment sales are recorded at prices that approximate cost and are eliminated in the Consolidated Statements of Operations. The Company does not allocate investment income, interest expense, or interest income to its segments when measuring performance. The Company also retains various other income and expenses at the corporate level. Equity in earnings of affiliates is included in segment profit; however, earnings attributable to the Company’s noncontrolling interests are excluded. These items are included below as Net Unallocated Expense and Noncontrolling Interest when reconciling to Earnings Before Income Taxes.
 
Sales and operating profits for each of the Company’s reportable segments and reconciliation to Earnings Before Income Taxes are set forth below. The Company is an integrated enterprise, characterized by substantial intersegment cooperation, cost allocations, and sharing of assets. Therefore, the Company does not represent that these segments, if operated independently, would report the profit and other financial information shown below.
 
Fiscal Year
(in thousands)202020192018
Sales to Unaffiliated Customers
Grocery Products$2,385,291 $2,369,317 $2,480,367 
Refrigerated Foods5,271,061 5,210,741 5,109,881 
Jennie-O Turkey Store1,333,459 1,323,783 1,331,013 
International & Other618,650 593,476 624,439 
Total$9,608,462 $9,497,317 $9,545,700 
Intersegment Sales
Grocery Products$13 $41 $38 
Refrigerated Foods21,067 16,351 8,591 
Jennie-O Turkey Store108,276 123,712 110,753 
International & Other— — — 
Total129,356 140,104 119,382 
Intersegment Elimination
(129,356)(140,104)(119,382)
Total$ $— $— 
Net Sales
Grocery Products$2,385,304 $2,369,358 $2,480,405 
Refrigerated Foods5,292,128 5,227,092 5,118,472 
Jennie-O Turkey Store1,441,735 1,447,495 1,441,766 
International & Other618,650 593,476 624,439 
Intersegment Elimination(129,356)(140,104)(119,382)
Total$9,608,462 $9,497,317 $9,545,700 
Segment Profit
Grocery Products$358,008 $339,497 $353,266 
Refrigerated Foods609,406 681,763 670,948 
Jennie-O Turkey Store105,585 117,962 131,846 
International & Other93,782 75,513 88,953 
Total Segment Profit$1,166,782 $1,214,735 $1,245,013 
Net Unallocated Expense52,307 5,362 64,171 
Noncontrolling Interest272 342 442 
Earnings Before Income Taxes$1,114,747 $1,209,715 $1,181,284 
Assets   
Grocery Products$1,713,883 $1,774,235 $2,172,117 
Refrigerated Foods4,188,250 3,583,639 3,444,646 
Jennie-O Turkey Store1,111,318 1,023,787 1,016,961 
International & Other721,729 692,310 679,003 
Corporate2,173,101 1,035,033 829,565 
Total$9,908,282 $8,109,004 $8,142,292 
Additions to Property, Plant, & Equipment
Grocery Products$34,409 $37,892 $13,042 
Refrigerated Foods249,441 174,506 220,499 
Jennie-O Turkey Store42,042 31,607 131,946 
International & Other3,737 9,248 16,513 
Corporate37,872 40,585 7,607 
Total$367,501 $293,838 $389,607 
Depreciation and Amortization
Grocery Products$32,148 $31,406 $35,210 
Refrigerated Foods97,317 77,100 70,579 
Jennie-O Turkey Store46,322 34,696 33,316 
International & Other16,226 10,666 10,755 
Corporate13,767 11,342 11,998 
Total$205,781 $165,210 $161,858 
 
Revenue has been disaggregated into the categories below to show how sales channels affect the nature, amount, timing, and uncertainty of revenue and cash flows. The amount of total revenues contributed by sales channel for the last three fiscal years are:
Fiscal Year Ended
(in thousands)October 25, 2020October 27, 2019October 28, 2018
U.S. Retail$5,441,412 $4,947,398 $5,112,988 
U.S. Foodservice2,489,644 2,943,352 2,824,951 
U.S. Deli970,327 939,069 914,009 
International707,078 667,498 693,752 
Total$9,608,462 $9,497,317 $9,545,700 

The shift in revenues from the U.S. Foodservice to the U.S. Retail channel in fiscal 2020 was driven by the COVID-19 pandemic and subsequent restrictions.

The Company’s products primarily consist of meat and other food products. The amount of total revenues contributed by classes of similar products for the last three fiscal years are: 
Fiscal Year Ended
(in thousands)October 25, 2020October 27, 2019October 28, 2018
Perishable$5,328,738 $5,370,409 $5,336,046 
Shelf-stable2,092,551 1,829,138 1,765,955 
Poultry1,886,367 1,849,294 1,842,320 
Miscellaneous300,806 448,476 601,379 
Total$9,608,462 $9,497,317 $9,545,700 
 
Perishable includes fresh meats, frozen items, refrigerated meal solutions, sausages, hams, guacamole, and bacon (excluding Jennie-O Turkey Store products). Shelf-stable includes canned luncheon meats, nut butters, chilies, shelf-stable microwaveable meals, hash, stews, tortillas, salsas, tortilla chips and other items that do not require refrigeration. The Poultry category is composed primarily of Jennie-O Turkey Store products. The Miscellaneous category primarily consists of nutritional food products and supplements, dessert and drink mixes, and industrial gelatin products. The reduction in the Miscellaneous category during fiscal 2019 and 2020 is due to the divestiture of CytoSport on April 15, 2019.

Revenues from external customers are classified as domestic or foreign based on the destination where title passes. No individual foreign country is material to the consolidated results. Additionally, the Company’s long-lived assets located in foreign countries are not significant. Total revenues attributed to the U.S. and all foreign countries in total for the last three fiscal years are: 
Fiscal Year Ended
(in thousands)October 25, 2020October 27, 2019October 28, 2018
United States$9,006,007 $8,934,911 $8,957,305 
Foreign602,454 562,406 588,395 
Total$9,608,462 $9,497,317 $9,545,700 
 
In fiscal 2020, sales to Walmart Inc. (Walmart) represented $1.5 billion or 14.6% of the Company’s consolidated revenues (measured as gross sales less returns and allowances). In fiscal 2019, sales to Walmart represented $1.4 billion or 13.5% of the Company’s consolidated revenues. Walmart is a customer for all four segments of the Company.