For Conagra Brands, its multi-year effort to reposition itself as a brands-focused business culminated this year with its $10.9 billion purchase of Pinnacle Foods — a bold bet on the suddenly resurgent frozen foods space. 

The deal, which brought together Healthy Choice, Marie Callender's, Birds Eye and Duncan Hines under one roof, was the culmination of talks between the two companies that reportedly had been on-again, off-again for years. The combination, one of the largest purchases in Conagra's 99-year history, creates a company that is the second-biggest U.S. frozen foods owner behind Nestlé.

"It's transformational in the scale it provides us, particularly in frozen," Sean Connolly, CEO of Conagra, told Food Dive. “But at the same time, it is as close to a large bolt-on acquisition as you’re ever going to see. These products, these kind of categories that are in the Pinnacle portfolio are right in our wheelhouse. It’s frozen. It’s snacking. It’s grocery."

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In addition to Bird’s Eye and other well-known brands, the Pinnacle deal moves Conagra into "new zip codes," as Connolly calls them, by giving the Chicago-based company a meaningful presence in the meatless trend with Gardein; gluten-free with Glutino and Udi's; and clean label and organic with EVOL.

Last year, Conagra purchased the makers of Duke’s meat snacks, Bigs sunflower seeds and Angie's Boomchickapop, brands that complement its existing line of Slim Jim and David Seeds, as well as Orville Redenbacher's and Act II popcorn.

"We like focus," said Connolly, who took over the top post in 2015. "We like building expertise in specific spaces, and we think we can do it for years to come."

After years spent pruning its operations through the sale of its private label business and the spinoff of frozen potato company Lamb Weston, the strategy at Conagra has shifted to internal innovation and acquisitions to bulk up in areas where it already has a commanding presence — the purchase of Pinnacle is no different.

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“Conagra has come a very long way over the last several years, really since Sean became CEO. I think he has done a very good job turning around the company, getting it to a point where they were able to make an acquisition of this size and really bring another company on to their platform.”

Brittany Weissman

Analyst, Edward Jones

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Brittany Weissman, an analyst at Edward Jones, told Food Dive these changes, along with lower supply chain and manufacturing expenses within the company, placed Conagra in a position where it could digest a purchase the size of Pinnacle.

With Pinnacle now in the fold, she said Conagra will be able to apply its deep knowledge of the packaged food space to innovate the new brands while using its bigger scale to expand its store presence and boost distribution.

"Conagra has come a very long way over the last several years, really since Sean became CEO," Weissman said. "I think he has done a very good job turning around the company, getting it to a point where they were able to make an acquisition of this size and really bring another company on to their platform."

Until recently, few areas in the food industry were as neglected as frozen. Once cast aside as an afterthought with consumers flocking toward fresher, better-for-you alternatives, the space has rebounded as food manufacturers have innovated to take advantage of recent trends — including low sodium, natural, sustainable and clean label. 

Conagra has been aggressively overhauling its own frozen foods line. Banquet was refreshed by adding new packaging, introducing on-the-go sliders and debuting a new premium "mega" tier for people with big appetites, an item that’s especially popular among the millennial crowd. Healthy Choice was given a similar refresh with high-energy power bowls and trendy new flavors, as well as meatless and breakfast options.

As Conagra digests the massive Pinnacle purchase, it’s unlikely to make another deal of this scale until it is able to integrate and ultimately mine synergies from the two companies. Instead, it's likely to focus its M&A prowess in the coming months on smaller bolt-on transactions that strengthen its existing businesses.

"For our company, we're going to be focused on integrating this very well, focused on paying down debt," Connolly said. "After we do that and we get our leverage back down then we’ll be in a position to think about further reshaping from there, but for now we are focused in integration, executional​ excellence and deleveraging.”