BOCA RATON, FLA. — Frozen pies and whole wheat flour stood out as areas of strength in the ConAgra Foods, Inc. quest for growth described in a presentation today by Gary Rodkin, chairman and chief executive officer.
Mr. Rodkin spoke Feb. 21 at the annual meeting of the Consumer Analyst Group of New York at the Boca Raton Resort and Club in Boca Raton. Expanding into areas adjacent to the company’s current businesses has been identified as a key to growth at the company in recent years. Mr. Rodkin said it was this strategy that prompted the acquisition of the Marie Callender’s frozen pie business, noting its position adjacent to the frozen dinner category and its faster growth.
“It’s a great story of organic growth,” Mr. Rodkin said. “The frozen dessert category is growing faster than the frozen meals category.”
Sales were up 27% in the final seven months of the year.
During the holiday period alone, sales were up 35% which Mr. Rodkin characterized as a “great insight” into core strength of the brand.
Describing ConAgra as the largest miller of whole grain flour in the United States, Mr. Rodkin called the sector “another important adjacency” for the company. Sales have grown 10% on a compound annual rate since fiscal 2006.
“It’s a fast-growing part of ConAgra Mills and a great way to improve mix and margin,” he said.
Grain-based foods also featured in another area of prospective growth for ConAgra identified by Mr. Rodkin — private label.
He described the recently acquired National Pretzel business as emblematic of the company's private label strategy, which is a product category with value-added potential.
“We don’t intend to be in all categories,” he said.
National Pretzel adds $200 million in incremental sales.
“It gets us into the salty snacks category, which is new for us,” he said. “Pretzels are perceived as a healthy snack and appeal to women. And there is a lot of opportunity for innovation.”
Asked what kinds of categories ConAgra will avoid, Mr. Rodkin said it would be those driven overwhelmingly by pricing with the business going out for bid every six months.