Jim Snee
Chairman of the Board, President, Chief Executive Officer at Hormel Foods
Thank you Nathan. Good morning, everyone. I want to start this morning by congratulating Jim Sheehan on his upcoming retirement. Jim will be retiring as CFO at the end of the calendar year, so this will be his last earnings call. Jim has over four decades with our Company and under his tenure has built a world-class finance accounting and technology organization. Jim was the guiding force behind Project Orion, an initiative that will benefit our Company for decades to come. For over 43 years, with the last five years as CFO, Jim has been a trusted partner to me and many of my predecessors. Jim helped complete over $5 billion in strategic acquisitions, including Justin's, Fontanini, [Indecipherable] Columbus, Sadler's, and our largest acquisition ever, Planters.
Equally impressive with Jim's contribution to reshaping our portfolio, as he was was also a guiding force behind many of the divestitures we made to transform our Company. Jim's oversight to our evolution puts us on a solid foundation for the future growth of our Company. Additionally, Jim has overseen the distribution of over $2 billion in dividends to our shareholders. In addition to his business accolades, Jim was the key voice behind our game-changing Inspired Pathways program, which provides free college education for children of our team members. Jim will be missed, and we wish him well in retirement along with his wife, Jean.
Jacinth Smiley succeeds Jim, and brings a wealth of experience from outside Hormel Foods, she has deep and broad domestic and international experience in areas such as corporate finance, public accounting and compliance. Most recently, she served as the Group Vice President of Corporate Strategy. Hormel Foods is fortunate to have Jacinth as CFO, and I'm looking forward to her leadership in her new role. My sincere congratulations to both Jim and Jacinth.
In an incredibly difficult and rapidly changing operating environment, our team delivered outstanding top line results. We achieved record sales in fiscal 2021, exceeding both $10 billion and $11 billion in sales for the first time. For the full year, sales were $11.4 billion, representing 19% sales growth. On an organic basis, sales increased 14%. Our top line growth was incredibly balanced as each of our go-to-market sales channels and business segments posted strong double-digit sales gains, underpinned by value added volume growth, pricing and a better mix.
Adjusted diluted earnings per share for the full year increased 4% to $1.73, in spite of inflationary pressure and supply chain challenges. Diluted earnings per share was $1.66. We had an excellent fourth quarter and posted numerous records, including a fourth consecutive quarter of record sales, record diluted earnings per share and record cash flow from operations. I want to commend our entire team for delivering this impressive performance and the numerous fourth quarter records.
Sales increased 43% and organic sales increased 32%. Volume increased 14% and organic volume increased 8%. We grew sales in every segment and every channel for the quarter. Compared to pre-pandemic levels in 2019, all channels grew by over 25%, driven by strong demand and pricing action in almost every category. It's all time record performance was led by further acceleration in our foodservice businesses. Our foodservice teams across the organization posted 72% sales growth for the quarter, 33% higher than pre-pandemic levels. This followed second quarter growth of 28% and third quarter growth 45%. Strength was broad-based with significant contributions from Refrigerated Foods, Jennie-O Turkey Store and MegaMex. We also saw a strong recovery in our noncommercial segments, including college and university and K through 12 institutions.
Our foodservice portfolio remains perfectly positioned to meet the needs of today's foodservice operators with labor and time saving products. I believe our growth in foodservice is a function of our differentiated value proposition in the industry, as well as our dedication during the pandemic. We have grown with our distributor and operator partners during the recovery, strengthening many of our partnerships and decades long relationships.
The top line performances from our other channels were equally impressive, retail, deli and international each delivered a second consecutive year of growth. Retail and international sales both increased 34% and deli sales increased 24%. On an organic basis, each channel posted strong double-digit growth. Growth came from numerous brands across all areas of our portfolio, including SPAM, Applegate, Columbus, Hormel Black Label, Wholly, Hormel Complete Gatherings and many more.
We continue to see very positive trends for consumer takeaway at retail. According to IRI, key metrics for our brands such as buy rate and trips per buyer remain favorable, which indicates elevated consumer spending on our products has remained. We also continue to grow share in many important categories, including Hormel Gatherings, party trays, Hormel pepperoni, SPAM luncheon meat and Hormel Chili.
Our One Supply Chain team has done an excellent job operating in and navigating constant supply chain disruptions. We've also seen the positive impact of their strategic actions, namely, we're starting to see an increasing number of our open positions being filled, more automation being implemented in our facilities and a more simplified product portfolio. In total, these actions are allowing us to maximize our throughput to meet the continued strong demand of our customers.
From a bottom line perspective, fourth quarter earnings were a record $0.51 per share, a 19% increase compared to 2020, an acceleration in our top line results and the addition of the Planters business led to the earnings growth. As we said in the third quarter, we expected margins to improve as pricing actions took effect. Indeed, margins improve sequentially in all four segments. Pricing actions, improved promotional effectiveness and a more profitable mix, all contributed to the improvement. We started to see relief in key raw materials in the fourth quarter compared to prior quarters. However, labor rates, freight, supplies and raw material costs remain above year-ago levels and in the case of freight, increased further.
Looking at the segments, Grocery Products, Refrigerated Foods and International segments, each posted double digit segment profit growth. Jennie-O Turkey Store profits declined due to higher feed costs. A few highlights from the quarter includes the following. Refrigerated Foods delivered strong volume sales and profit growth. The team was able to leverage the numerous capacity expansion projects since the start of the pandemic for categories such as pizza toppings, bacon and dry sausage.
Within Grocery Products, our simple meals and Mexican portfolios generated excellent growth, in addition to contributions from the Planters snacks nuts business. Notably, the SPAM brands delivered its seventh consecutive year of record growth, and we recently announced plans for additional capacity to support future growth. Our international team achieved a seventh consecutive quarter of record earnings growth with strong results from all of their businesses. The momentum this business has generated over the last two years supports our plans to aggressively expand internationally. Lastly, Planters made a positive impact, especially in the fast growing snacking and entertaining space and within the convenience store channel.
This quarter's results were outstanding and we intend to build on this momentum going into 2022. Over the past decade, Hormel Foods has deliberately evolved from a meet centric commodity-driven company with a heavy focus on retail pork and turkey to a global branded food company with leading brands across numerous channels. Our Company today is more food forward than ever, with a sharp focus on the needs of our customers, consumers and operators.
As we begin fiscal 2022, we plan to continue our evolution. First, we will complete the full integration of the Planters business across all functions. The first of three production facilities was successfully integrated in the fourth quarter and the remaining two facilities are scheduled to be fully integrated in our first quarter. Since acquiring Planters six months ago, our sales, marketing, innovation and R&D teams have been hard at work, developing new and innovative products and flavors, many of which will be rolled out this coming year. They've also been working on refreshing the branding and packaging, which will also be launched in 2022. Seeing the great work of our teams has been even more confident about where we are able to take this brand in the future and further strengthen our conviction of the potential for Planters. From a financial standpoint, the Planters business is performing at the top end of our expectations and we expect that trend to continue in fiscal '22.
Second, we are also taking a series of actions at Jennie-O Turkey Store. Over time, we expect these actions to result in a more demand oriented and optimize turkey portfolio that is better aligned to the changing needs of our customers, consumers and operators that will result in long-term growth, improved profitability and lower earnings volatility.
The transformation starts with accelerating our efforts to shift from commodity to branded value-added products. This is a similar to the successful strategy we have executed in Refrigerated Foods over the past 15 years. As a result, we will close the Benson Avenue plant located in Willmar, Minnesota in the first half of fiscal 2022. This plant is an older inefficient facility which produces numerous commodity items. Value-added products will be consolidated into multiple other facilities. Team members will transition to our newer and larger facility also located in Willmar, which will supplement staffing levels.
Finally, we will continue to integrate business functions into the Hormel Foods parent organization. Over the past two years, we have successfully integrated IT services, finance and accounting and HR into the Hormel organization through Project Orion, and we will continue these efforts for other functions. By doing so, we will bring the Turkey expertise and competitive advantages of the Jennie-O team to the broader organization. I want to be very clear that Turkey will continue to play an important role in our Company for many brands, including Columbus, Applegate, Hormel Natural Choice, in addition to Jennie-O. Turkey is vital to our balanced business model, serves to diversify our portfolio and it's important to consumers who are looking for high protein, lean and versatile offering. We will provide further update and details on the financial components and timing on our first quarter call.
Finally, we made additional progress on optimizing our pork supply chain by signing a new five-year raw material supply agreement with our supplier in Fremont, Nebraska. This new agreement more closely matches our pork supply with the needs of our value-added businesses, while simultaneously reducing the amount of commodity pork lease out. Similar to the rationale for selling the Fremont plant in 2018, this new agreement further diversifies us away from commodity sales, increases our flexibility within our supply chain and decreases our earnings volatility. This agreement should result in a reduction of approximately $350 million of commodity fresh pork sales at very low margin. The impact is split between the Refrigerated Foods and International segment. The contract will be effective at the start of calendar year 2022.
The success we are having with the Planters, the actions we are taking at Jennie-O Turkey Store and the continued progress we are making in our pork supply chain, all provide greater insights into how we are continuing to evolve Hormel Foods for next year and beyond. And not only have we evolved our portfolio, but we will continue to evolve how we operate as a company with initiatives such as One Supply Chain, Project Orion and our Digital Experience group. Looking at fiscal 2022, we expect net sales to be between $11.7 billion and $12.5 billion, and for diluted earnings per share to be between a $1.87 and $2.03 per share.
We expect growth in excess of our long-term goals due to organic growth across each of our segments and strengthen our Planters business. I have confidence in our ability to achieve our guidance with all four segments delivering growth. Jacinth Smiley will provide more color regarding key drivers to our fiscal 2022 outlook.
At this time, I will turn the call over to Jim Sheehan to discuss financial information relating to the quarter.
