Conagra CEO says food maker looking at more acquisitions
- Fresh off its recent purchase of ready-to-eat popcorn brand Angie’s Boomchickapop, Conagra Brands is eyeing further deals, according to Food Business News. The Angie’s transaction is expected to close by the end of the year.
- “In order to grow, we have to modernize, innovate and renovate our portfolio, and that is exactly what we are doing,” Sean Connolly, the company's CEO, said during last week’s earnings call. Regarding the Angie’s acquisition he said, “The $250 million transaction builds on our efforts to refresh our portfolio and accelerate growth through modernizing acquisitions.”
- The food maker takes a two-pronged approach to mergers and acquisitions, focusing on both smaller deals and larger, synergistic transactions.
During the company’s first quarter earnings call last week, CEO Connolly said ConAgra is "grounded in our analysis of consumer behavior, which we believe provides a roadmap for what we need to do to drive growth. ... It's hard work, but the endgame is clear. In order to grow, we have to modernize, innovate, and renovate our portfolio.”
The food manufacturer has been busy doing just that, taking some much-needed steps to transform itself into a more modern, innovative food company. It’s incorporating on-trend flavors and ingredients to reinvigorate some of its iconic brands. Big labels such as Healthy Choice, Banquet and Marie Callender’s, which drive company volume, have gotten a makeover.
Conagra also has been on a buying spree, making a number of smaller deals that have allowed it to strengthen its position, mainly in the snacks space. It's $250 million purchase of Angie’s Boomchickapop, a maker of ready-to-eat popcorn using real simple ingredients is a nice complement to Conagra's other brands including Orville Redenbacher.
Early this year, Conagra acquired Thanasi Food, the upstart food manufacturer behind the Duke’s meat snacks brand and Bigs sunflower seeds. In September 2016, Conagra acquired Frontera Foods, a manufacturer of salsas and sauces. The brands were added to the company’s snacks portfolio that already included Slim Jim meat snacks, Chef Boyardee and David Seeds. Conagra also used its expertise in frozen to extend the Frontera brand into single-serve meals. Frontera skillet meals and single-serving bowls consist of chicken fajita, barbacoa taco and veggie taco meals.
Snacking is popular with millennials and members of Generation Z, who tend to be concerned with their health. A study form the NPD Group found almost a quarter of all snack food eating now occurs during main meals. The purchase of trendy companies focused on proteins and snacks made with better-for-you ingredients and innovative flavor profiles is likely to continue as food companies — including Conagra —work to position themselves in an increasingly competitive food landscape.
As Connolly noted, “While we’ve made tremendous progress, our work is not done. We still have a lot of opportunity in front of us, and we will continue to chip away at margin opportunities and strengthen our innovation programs in order to improve our growth prospects.” Conagra should continue to jump at the chance to buy more of these on-trend, innovative startups and small brands. If not, a competitor will.
- Food Business News Conagra Brands: 'We have to modernize, innovate and renovate our portfolio'
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