When Gary Rodkin became chief executive officer of ConAgra Foods in 2005, he took the reins of a conglomerate with interests ranging from commodities trading to wholesale foodservice, and set out to transform it into a more streamlined consumer packaged goods company with a strong portfolio of brands.
Major divestments have included the ConAgra Trade Group, which was sold to Ospraie Management for $2.1 billion in 2008. Last month, this trend continued when the Omaha, Neb.-headquartered company announced it would sell its Gilroy Foods & Flavors seasoning and dehydrated vegetable operations to Olam International for $250 million.
“Our focus all along has been to build a strong portfolio of consumer brands that deliver sustainable, profitable growth,” Rodkin told SN. “That meant we needed to divest certain businesses to improve our operating margins and ensure more predictable growth, such as the Trade Group, and certain commodity-based businesses, such as refrigerated meats. It also meant that we needed to divest some businesses to allow us to even better focus on our strategic priorities. The recently announced divestiture of dehydrated and vegetable product operations of our Gilroy Foods business reflects that direction.”
ConAgra has used money from some of these divestitures to pay down debt, and to acquire consumer packaged goods businesses “that serve as great ‘tuck in’ acquisitions and fulfill a need within our portfolio or provide adjacent category expansion,” Rodkin said.
Most recently, the company has acquired Marie Callender’s and Claim Jumper frozen fruit pies and cobblers, thaw and serve pies and pie shells, as well as Elan Nutrition, which manufactures private-label nutrition bars.
“By gaining ownership of all of the Marie Callender’s frozen food offerings, we can quickly establish a strong presence in frozen dessert — a category in which we currently have only an emerging presence with Banquet fruit pies,” Rodkin said. “Acquiring Elan Nutrition allows us to continue growing and expanding our very successful snack bar business. We are confident in the growth potential of this important category.”
The strategy seems to be working great. Even during a very difficult recession, in which many shoppers are switching to private-label products, ConAgra’s brands have continued to grow. Unit and dollar market share and total points of distribution were all up for its consumer brands during a profitable fiscal 2010, which recently concluded for the company.
There is still work to be done. ConAgra’s portfolio is filled with major brands that almost all shoppers will recognize — Healthy Choice, Slim Jim, Chef Boyardee, Pam, Orville Redenbacher’s, Crunch ‘n Munch and Hebrew National are just a few. But, how many shoppers recognize that these are all products produced by the same company?
Under Rodkin’s guidance, ConAgra launched a brand-identity campaign featuring the tagline “ConAgra Foods — Foods You Love” in an effort to help shoppers start making those connections. And, Rodkin said the company is getting ready to launch a new marketing and advertising campaign to take that message to the next level.
“With customers, our goal [is] to help them connect with the breadth and depth of the portfolio so that they truly understand what ConAgra Foods brings to the table,” Rodkin said.