Premium ContentMouse over Home then click on Premium Content for information.In the near future, ConAgra Foods Inc. plans to invest more in foods that consumers want, rather than foods consumers need.
Snacks like pretzels, popcorn, meat sticks, packaged fruit and health bars, and desserts including frozen Greek yogurt and fruit pies have moved into ConAgra's focus for a reason: They're in expanding grocery categories where consumers are spending more money versus traditional pantry staples like canned tomatoes, pastas and peanut butter.
Tuesday, Omaha-based ConAgra's chief executive and president, Gary Rodkin, told analysts and investors the company has entered "phase two" of its long-term growth plan.
When Rodkin took over the company in 2005, it was an "underdog without a rich tradition of winning," he said. Now, after more than six years of spinning-off noncore operations and putting the focus on its packaged food business, Rodkin said, ConAgra is positioned to continue increasing revenue and market share through its expanding international business and new frozen and snack products.
"We're in a much better place today because of the work that took place in that (restructuring) phase," Rodkin said during the Consumer Analyst Group of New York conference in Boca Raton, Fla.
The conference, which has been used in past years to tease new products and other up-and-coming developments, was a launchpad for just a few new ConAgra offerings: a frozen Greek yogurt dessert from the company's Healthy Choice brand that is expected to be available in early 2013; and expansions to the company's Slim Jim meat snack and Orville Redenbacher's popcorn lines.
Food companies, including the Omaha-based ConAgra, are grappling with high commodity prices that have forced price increases and a customer base that's spending less at the grocery store.
To battle those challenges, ConAgra has started using a new program called Customer Connect to help analyze and make better and more consistent decisions on what products to raise prices on.
Customer Connect draws information from variables — customer interviews, product purchasing trends and shopper marketing data — to help a team of ConAgra employees determine a consistent method for deciding how much and when to increase prices on products.
Despite the tough operating environment, Rodkin said ConAgra continues to look for acquisition targets that can bolster the company's international business and production of private-label products, which have continued to gain popularity at chain discount stores, as well as stores like Costco, Sam's Club and Trader Joe's.
Recent moves — the acquisition of Del Monte Canada, buying a majority stake in an India-based food manufacturer and purchasing National Pretzel Co. — are examples that highlight ConAgra's desire to move into fast-expanding segments that bring the most opportunity for sales growth.
"We want to double our international business over the next three to five years," Rodkin said. "But only with the right assets through organic growth and acquisitions."
ConAgra officials told analysts that over the long term the company expects earnings per share to increase between 6 percent and 8 percent annually, and top-line sales to grow at least 3 percent per year.
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402-444-1414, ross.boettcher@owh.com
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