ConAgra Foods fills the refrigerators, freezers, and pantries of most households. The company makes and markets name-brand packaged and frozen foods that are sold in most retail outlets. ConAgra's cornucopia of America's best-known brands includes Banquet, Chef Boyardee, Egg Beaters, Healthy Choice, Hunt's, Marie Callender, Orville Redenbacher's, PAM, Peter Pan, Reddi-Wip, Slim Jim, Snack Pack, and Van Camp's. It is also one of the biggest producers of potato and vegetable products, as well as seasoning and grain ingredients for the US food service, food manufacturing, and industrial markets. ConAgra Foods became the nation's largest purveyor of private-label food brands in 2013 when it acquired Ralcorp Holdings.
ConAgra's business is divided into three reporting segments: Consumer Foods, Commercial Foods, and Private Brands.
The Consumer Foods segment, which generates more than 40% of sales, consists of branded, private-label, and custom-made food products. The lineup ranges from meals to side dishes, snacks, and desserts (found frozen, refrigerated, or at shelf-stable temperature), and is sold by a variety of retailers and some food service operators, mainly in North America.
ConAgra's Commercial Foods segment comprises commercially branded food products and ingredients used in the kitchens of food manufacturers, as well as food service and industrial customers. The segment brings in some 35% of sales.
After acquiring Ralcorp, the company established its rapidly growing Private Brands segment, which generates about 25% of sales. The segment produces private branded and customized food items (cereal, condiments, baked goods, etc.) which are sold in a variety of retail and foodservice channels, primarily in North America.
ConAgra operates primarily in the US. It has international manufacturing facilities in Argentina, Austria, Canada, Mexico, the Netherlands, and the UK. ConAgra also operates general offices in China, Colombia, Italy, Japan, Mexico, the Netherlands, Panama, Puerto Rico, and Singapore.
Sales and Marketing
Wal-Mart, ConAgra's largest customer, has accounted for 17% of sales for both 2014 and 2013.The company also operates ReadySetEat.com, an interactive recipe website.
In fiscal 2014 (ended May) ConAgra reduced its spending on advertising and promotion, which totaled $417 million (versus $466 million spent in 2013).
ConAgra's revenues have been growing steadily over the past five years. In 2014, sales grew 14% to $17.7 billion, compared to $15.5 billion in 2013. The growth was primarily due to the addition of the Ralcorp private brands business, which saw nearly all of its products (with the exception of bars and coordinated items) more than double in sales that year. The Ralcorp operations also contributed to growth in frozen bakery item sales. However, the private brands segment is still ConAgra's smallest segment; its largest segment, consumer foods, saw sales drop in 2014.
Although revenues have been rising steadily, net income has been fluctuating. Profits fell 61% to $303.1 million in fiscal 2014 as operating costs increased for the company. Cash flow from operations increased 14% to $1.6 billion that year due to a rise in cash generated from accounts receivable.
Strategic goals for the company include growing its branded and private-brand portfolios, improving its customer relations, cutting costs, and expanding geographically into desired markets. ConAgra looks to grow through acquisitions to reinvigorate the name-brand business and expand in the private-label food business. To that end, ConAgra in 2013 acquired Ralcorp, the nation's #1 maker of private-label food. Previously, it had acquired Bertolli and P.F. Chang's Home Menu frozen meals lines, the Kangaroo Brands line of pita chips, and Odom's Tennessee Pride, the #2 producer of frozen breakfast sandwiches in the US. In the consumer foods segment, the company acquired frozen dessert production operations from Harlan Bakeries for $39.9 million in 2013.
In 2013 ConAgra formed a joint flour-milling venture with Cargill and farmer-owned cooperative CHS. The three partners are combining their flour-milling operations to form Ardent Mills, the largest flour miller in North America, with annual sales of more than $4 billion. ConAgra and Cargill each own 44% of the newly-formed company, while CHS holds 12%. (The company has sold three flour mills, for $162 million, by order of the US Justice Department, which said that the venture was anticompetitive and would otherwise result in higher flour prices.)
Expanding its international operations, ConAgra established a Lamb Weston frozen potato processing facility in northern China in 2014. It plans to expand a similar plant in the Netherlands. At home, the company expanded a Lamb Weston facility in Oregon to increase capacity.
ConAgra has also been known to sell certain lines of business. In 2013 the company sold its small Lightlife Foods brand of vegetarian burgers, hotdogs, and other meatless frozen and refrigerated items to Brynwood Partners. The following year it sold snack business Medallion Foods for $32 million.
Mergers and Acquisitions
ConAgra acquired Ralcorp (on its second try) in early 2013 in a deal valued at about $6.8 billion (including debt). The combined company is expected to generate $18 billion in sales, and makse ConAgra the largest private-brand packaged foods business in North America, with annual private brand sales of about $4.5 billion a year. The private brands segment makes private-label ready-to-eat cereals, cereal bars, snack mixes, cookies, crackers, and other products for retailers under their own brand names.