ConAgra Foods is looking to drive sales and earnings growth through removing costs from its supply chain and diverting the cash into the launch of a raft of products, the US food giant said today (16 February).
The company, which owns brands including Healthy Choice ready meals and Orville Redenbacher’s popcorn, is lining up further savings from its supply chains to “fuel” investment in its branded portfolio.
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Speaking to analysts at the CAGNY conference in Florida, which started today, president and CEO Gary Rodkin more new products from ConAgra would hit the US market this summer.
ConAgra will launch more products under its Banquet brand, including a first move into the desserts category, and add more “steaming products” to lines already on sale under the Healthy Choice and Marie Callender’s brands.
Rodkin emphasised the importance of the Banquet brand to ConAgra’s portfolio, particularly amid a challenging economy. “Banquet is our biggest consumer brand. No-one in the industry can make food this good for this price,” he said.
The ConAgra boss also insisted that the company was unmatched in its ability to offer “value” to US consumers. “Nobody can beat us from a value stand-point. We consider it impenetrable.”
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By GlobalDataHowever, with ConAgra’s presence in the US frozen food category, the business has seen competitors look to promotions to lure consumers and increase market share. Rodkin insisted he wanted the emphasis in frozen food to move away from “discounting”.
“We’re trying to change the game; we would like it to be on innovation and marketing, rather than on discounting,” Rodkin said. “We’ve proven that that can work. That’s where we believe our advantage is. Our stuff is better.”
To fuel the investment in its brands and drive earnings in the unpredictable economic climate, ConAgra also told analysts it had identified a series of efficiences the company could make in its supply chain and within its plants to cut costs.
ConAgra has set out plans to save some $275m each year over the next three fiscal years from its supply chain.
“Leveraging the power and scale of our supply chain continues to be one of the biggest opportunities for ConAgra Foods,” Rodkin said.
“We have proven our ability to take productivity savings and use them for fuel to drive the top line – and earnings growth. That ability is one of the main reasons I am so bullish on our future. And not to be glossed over is the fact that there is a lot more savings coming.”
Rodkin added: “We’ll keep this model going for the foreseeable future. This isn’t just about creating savings but it’s also about our proven competency in investing that fuel in marketing and innovation – and it also generates strong profit growth in the process.”
ConAgra, which also announced plans for a $500m share buyback today, saw its shares rise by 2% to $23.87 at 11:34 EST today.
