Conagra Brands is exiting its Celeste frozen pizza line as part of a move to slim down its portfolio and simplify its business amid sputtering sales due to a pullback in consumer spending.
The snack and frozen food maker is studying other SKUs it could cut and brands to divest. The review is ongoing, with the majority of the benefits expected to be realized over the next 12 to 18 months.
CEO John Brase noted Conagra makes more than 400 single-serve meal SKUs, for example, and reducing that total would create “an optimized assortment [that] can help drive velocity on our most impactful offerings.”
“There are certain brands and categories where we simply just don't see a future,” Brase, who took over at Conagra in June, told analysts. “It just makes sense to exit those small and really unprofitable brands or low-profit brands as soon as possible.”
While the company culls some SKUs or brands, Conagra is planning to invest more in other parts of its business. Exiting Celeste frozen pizza, for example, allows the company "to redirect our resources toward brands and categories where we have greater scale and stronger growth potential," Brase said on the earnings call.
The CPG executive said Conagra plans a “significant step-up” in investment behind meat sticks and popcorn, two areas where the Chicago company is a market leader.
“Those are the two critical levers to get us back to a growth trajectory in those important businesses,” Brase noted.
The former J.M. Smucker executive told Food Dive in July that he was prepared to make “bold decisions” to turn around performance at the Orville Redenbacher and Healthy Choice maker, which he said has been slowed by a complex portfolio and a failure to invest enough in growing the company’s on-trend snack and frozen offerings.
Conagra also hasn’t done enough to communicate with shoppers the value of its brands, proving a “tremendous opportunity” for its business during a challenging time for cash-strapped consumers, Brase told investors.
Food companies have been hit hard by a slowdown in consumer spending and a shift by shoppers toward healthier, less processed offerings. Conagra recently forecast organic net sales during its 2027 fiscal year to drop between 1% and 3% after slipping 0.4% in the prior year.
Despite challenges facing consumers, Conagra is planning to raise prices on some frozen foods and other products. The increases are likely to result in volume declines, the food maker warned.
