The company said that fresh chicken raised without antibiotics was shipped to stores Monday and will be sold beginning later this week in packaging that emphasizes that there are no artificial ingredients.
"We're providing mainstream consumers with products they want," Tyson Chief Executive Richard Bond said at a news conference.
Consumers will have to pay slightly more, though. Tyson Senior Vice President Dave Hogberg declined to specify how much of an increase shoppers will see at stores, but he said it would be "below the cost consumers say they're willing to pay."
He added that competitors charge about $1.50 to $2 per pound more for boneless, skinless chicken breasts without antibiotics and that the price increase for Tyson's antibiotic-free chicken would be less than $1 per pound.
Tyson, the country's second-largest chicken producer, also will be spending more to make the switchover to raising the antibiotic-free chickens. Hogberg said Tyson is converting 20 of its production facilities -- or slightly less than half --to produce the products. He declined to specify how much the move is costing the company.
Bond, however, said the switch would not affect the company's earning short-term.
Instead, he said, earnings and sales would both benefit from the move since it could increase demand for chicken and potentially generate additional sales on other Tyson products.
But J.P. Morgan analyst Pablo Zuanic said the move most likely will not lead to a large increase in either sales or profit.
"We do not think the new initiative will result in Tyson gaining chicken volume share, but it could help improve its mix (and profit margins)," Zuanic wrote in a note to investors. "But we question whether the average consumer will pay a hefty premium ... that leads to a meaningful jump in profit margins."
Fresh chicken now makes up less than 10 percent of the company's sales, Hogberg said.
National Chicken Council spokesman Richard Lobb said the move to antibiotic-free chicken tracks an industry trend.
"I think it is very clear that antibiotic usage across the industry is substantially less than it was 10 years ago," he said.
Tyson will continue to use antibiotics on a small percentage of its poultry stocks to treat or prevent disease, the company said. Those chickens will not be sold to retail consumers under the Tyson label or as "Raised Without Antibiotics" products, the company said.
Other Tyson chicken, such as Tyson Deli Rotisserie and Marinated Raw Breaded eight-piece packages, will be without antibiotics by next month. Tyson's quick frozen chicken will be without antibiotics by late August, the company said.
A number of Tyson products, such as chicken nuggets and other frozen items, will not be sold under the "Raised Without Antibiotics" label.
The antibiotic-free chicken will be featured in the company's new $70 million ad campaign aimed mainly at moms. The campaign, titled "Thank You," will feature families thanking mothers for making dinner with Tyson products.
Tyson said the campaign will focus entirely on the antibiotic-free fresh chicken for the first few months before expanding to include other Tyson products.
Shares of Tyson fell 12 cents to close at $22.96 on Tuesday.