2011 Power 50: No. 35 Gary Rodkin

In response to this year’s rocky economy, poor potato crops and inflation reaching a high of 9% in the consumer foods segment last quarter, Gary Rodkin, ConAgra’s president and chief executive officer, has pushed forward with product innovation, price increases and innovative merchandising tactics.

Rodkin has led ConAgra through a difficult year. During a June conference call, he emphasized that the company remains focused on the fundamentals, noting that these basic operational elements are meaningful for the long-term future of the company.

“We’re confident in our long-term potential because of the stronger foundation we’ve built over the last few years in the core areas of the company, including innovation, marketing, supply chain and customer partnerships,” he said during the fiscal fourth-quarter conference call last month.

After a year marked with declines in profit and slow growth, the fourth quarter brought ConAgra an increase in its earnings per share, despite inflationary pressures that have hampered profits in its consumer foods division.

“In the [fourth] quarter we faced accelerated inflation and experienced the customary lag between inflation and necessary pricing,” said Rodkin in the call, according to a Seeking Alpha transcript. “It’s tough out there but we are making progress in key areas of our business and we’re confident in our ability to manage through.”

With prices rising, shoppers responded by buying less. In part due to these price hikes, volume declined 3% in the consumer foods segment during ConAgra’s fourth quarter. ConAgra also attributes this decline to soft demand and difficult market conditions. Some of the company’s leading brands, including Marie Callender’s frozen meals and Hunt’s Canned Tomatoes, enjoyed growth in revenue, volume and market share, Rodkin said.

However, ConAgra’s commercial operating profits have fared better, up slightly in the third quarter, and on the rise, reaching a 14% increase in the fourth quarter. ConAgra attributes this growth to the recovery of Lamb Weston, its potato company, and profits reaped through ConAgra’s flour milling business.

Rodkin sees ConAgra’s product innovation as a key factor in driving growth, he said at the Consumer Analyst Group (CAG) of New York Conference last February, according to a Thomson Reuters transcript.

The innovations involve food, packaging and nutrition, and can be seen in product lines such as Marie Callender’s baked meals, which are intended to provide an oven-baked taste from the microwave with products such as Vermont White Cheddar Mac & Cheese and Scalloped Potatoes & Ham in Creamy Cheese Sauce.

Other product innovations include Orville Redenbacher’s popcorn bag that refashions into a stand-up bowl and Peter Pan’s new no-stir natural peanut butters.

Rodkin highlighted the success of some of ConAgra’s acquisitions, citing that Alexia Foods, which produces all-natural products, is 2½ times the size it was when ConAgra acquired the company four years ago. Marie Callender’s Desserts brand also grew in double-digits during its first year under ConAgra’s wing.

ConAgra further invested in Marie Callender’s last month, purchasing the previously licensed brand trademarks for $57.5 million from Marie Callender’s Pie Shop. Rodkin said this purchase gives ConAgra “more opportunity to expand and grow a very large and core brand within our portfolio.”

Second only to ConAgra’s Banquet brand in sales, the Marie Callender’s brand brings in $800 million in sales through its frozen foods.

“Our frozen portfolio is one where we have made tremendous progress, and we will leverage our insights and strategies from these successes and apply them to grow in other areas at ConAgra Foods,” Rodkin said at CAG.

ConAgra remains open to acquisitions, most recently attempting to buy Ralcorp Holdings, a company that makes private-label products. Ralcorp rebuffed ConAgra’s most recent offer of $86 a share, or $4.9 billion, in May.