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Segment Reporting | 12 Months Ended
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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) |  | 2020 |  | 2019 |  | 2018
Sales to Unaffiliated Customers |  |  |  |  |  |
Grocery Products |  | $ | 2,385,291 |  |  | $ | 2,369,317 |  |  | $ | 2,480,367 |
Refrigerated Foods |  | 5,271,061 |  |  | 5,210,741 |  |  | 5,109,881 |
Jennie-O Turkey Store |  | 1,333,459 |  |  | 1,323,783 |  |  | 1,331,013 |
International & Other |  | 618,650 |  |  | 593,476 |  |  | 624,439 |
Total |  | $ | 9,608,462 |  |  | $ | 9,497,317 |  |  | $ | 9,545,700 |
Intersegment Sales |  |  |  |  |  |
Grocery Products |  | $ | 13 |  |  | $ | 41 |  |  | $ | 38 |
Refrigerated Foods |  | 21,067 |  |  | 16,351 |  |  | 8,591 |
Jennie-O Turkey Store |  | 108,276 |  |  | 123,712 |  |  | 110,753 |
International & Other |  | — |  |  | — |  |  | — |
Total |  | 129,356 |  |  | 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 Foods |  | 5,292,128 |  |  | 5,227,092 |  |  | 5,118,472 |
Jennie-O Turkey Store |  | 1,441,735 |  |  | 1,447,495 |  |  | 1,441,766 |
International & Other |  | 618,650 |  |  | 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 Foods |  | 609,406 |  |  | 681,763 |  |  | 670,948 |
Jennie-O Turkey Store |  | 105,585 |  |  | 117,962 |  |  | 131,846 |
International & Other |  | 93,782 |  |  | 75,513 |  |  | 88,953 |
Total Segment Profit |  | $ | 1,166,782 |  |  | $ | 1,214,735 |  |  | $ | 1,245,013 |
Net Unallocated Expense |  | 52,307 |  |  | 5,362 |  |  | 64,171 |
Noncontrolling Interest |  | 272 |  |  | 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 Foods |  | 4,188,250 |  |  | 3,583,639 |  |  | 3,444,646 |
Jennie-O Turkey Store |  | 1,111,318 |  |  | 1,023,787 |  |  | 1,016,961 |
International & Other |  | 721,729 |  |  | 692,310 |  |  | 679,003 |
Corporate |  | 2,173,101 |  |  | 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 Foods |  | 249,441 |  |  | 174,506 |  |  | 220,499 |
Jennie-O Turkey Store |  | 42,042 |  |  | 31,607 |  |  | 131,946 |
International & Other |  | 3,737 |  |  | 9,248 |  |  | 16,513 |
Corporate |  | 37,872 |  |  | 40,585 |  |  | 7,607 |
Total |  | $ | 367,501 |  |  | $ | 293,838 |  |  | $ | 389,607 |
Depreciation and Amortization |  |  |  |  |  |
Grocery Products |  | $ | 32,148 |  |  | $ | 31,406 |  |  | $ | 35,210 |
Refrigerated Foods |  | 97,317 |  |  | 77,100 |  |  | 70,579 |
Jennie-O Turkey Store |  | 46,322 |  |  | 34,696 |  |  | 33,316 |
International & Other |  | 16,226 |  |  | 10,666 |  |  | 10,755 |
Corporate |  | 13,767 |  |  | 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, 2020 |  | October 27, 2019 |  | October 28, 2018
U.S. Retail |  | $ | 5,441,412 |  |  | $ | 4,947,398 |  |  | $ | 5,112,988 |
U.S. Foodservice |  | 2,489,644 |  |  | 2,943,352 |  |  | 2,824,951 |
U.S. Deli |  | 970,327 |  |  | 939,069 |  |  | 914,009 |
International |  | 707,078 |  |  | 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, 2020 |  | October 27, 2019 |  | October 28, 2018
Perishable |  | $ | 5,328,738 |  |  | $ | 5,370,409 |  |  | $ | 5,336,046 |
Shelf-stable |  | 2,092,551 |  |  | 1,829,138 |  |  | 1,765,955 |
Poultry |  | 1,886,367 |  |  | 1,849,294 |  |  | 1,842,320 |
Miscellaneous |  | 300,806 |  |  | 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, 2020 |  | October 27, 2019 |  | October 28, 2018
United States |  | $ | 9,006,007 |  |  | $ | 8,934,911 |  |  | $ | 8,957,305 |
Foreign |  | 602,454 |  |  | 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.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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