Chicago, Illinois, USA-headquartered Conagra Brands reported a net sales increase of 2.2% to approximately $3.0 billion, while operating margin decreased 544 basis points in the fourth quarter ending on May 28. Gross profit rose 9.8% to $783 million during the three-month period, and adjusted gross profit increased 11.0% to $803 million.
For the full fiscal year, gross profit increased 15.0% to $3.3 billion and adjusted gross profit rose 16.1% to $3.3 billion, as the benefits from higher organic net sales and productivity more than offset the negative impacts from cost of goods sold, inflation (including unfavorable commodity positions), unfavorable operating leverage, and elevated supply chain operating costs.
From Evol Truffle Mac & Cheese and Birds Eye vegetables to Gardein plant-based faux chicken and beef items, to Marie Callender’s, Banquet, Healthy Choice and other ready meals, Conagra produces and markets a wide variety of branded frozen food products sold in supermarkets and other grocery stores.
As for Q4 results in other segments, Conagra’s Grocery and Snacks net sales rose 3.6% to $1.2 billion. Foodservice receipts were up 5.5% to $303 million, while International sales advanced 8.6% to $251 million.
Reported and organic net sales for its Refrigerated & Frozen segment decreased 1.1% to $1.2 billion in the fourth quarter. While price mix increased 10.4% and volume decreased 11.5%. Price/mix was driven by favorability in inflation-driven pricing. The volume decrease was primarily due to the elasticity impact from inflation-driven pricing actions and shortages from supply chain disruptions due to a third-party supplier shutdown.
In Q4, Conagra gained share in categories such as frozen side dishes, multi serve meals, and frozen breakfast sausage.
Operating profit for the segment decreased to a $43 million loss in the quarter as a result of the brand impairment charges. Adjusted operating profit increased 17.7% to $218 million as higher organic net sales and productivity more than offset the negative impacts of cost of goods sold inflation (including unfavorable commodity positions), unfavorable operating leverage, and increased A&P and SG&A.
Cybersecurity Disruption Impacts Distribution
“In Q4, we delivered solid profit and margin growth despite the disruption from one of our frozen logistics partners, Americold, which impacted both our sales and costs during the quarter,” said CEO Sean Connolly. “While we are making strong progress in the supply chain, it’s not yet back to normal as we experienced transitory disruptions in the quarter such as the cybersecurity event at Americold.”
Noting that the company’s strategic focus on frozen and snack products has fueled its innovation engine, the chief executive officer stated: “Over the past four years, the frozen and snacks categories in which we compete have grown 9% and 8%, respectively, outpacing total food growth. Within our portfolio, frozen and snacks together now represent almost 70% of our domestic retail dollar sales and we have consistently increased our share within these strong and growing domains.”
Looking more closely, since fiscal 2014 the frozen categories in which Conagra competes have grown from $29 billion to $54 billion, representing a 7% compound annual growth rate. At the same time, the company’s share has increased by nearly 500 basis points to become the leader in the US frozen retail sector.
Commenting on the frozen vegetable business, Connolly stated: “There is an element of value over volume strategy that remains central to our Birds Eye playbook as we continue to drive premiumization and more of a finished prepared vegetable product than a bag of commodity vegetables.”
As for Q4 results in other segments, Conagra’s Grocery and Snacks net sales rose 3.6% to $1.2 billion. Foodservice receipts were up 5.5% to $303 million, while International sales advanced 8.6% to $251 million.
Sizzling Summer Lineup of New Products
Meanwhile, on July 19 Conagra announced that more than 50 new products will debut in retail stores this summer across the company’s frozen, grocery and snacks divisions. Among the rollouts are single-serve and multi-serve meals, snacks and appetizers
“Innovating to meet the needs of consumers is a top priority for our team,” said Burke Raine, president of Conagra Brands Frozen & Refrigerated division. “Our newest food features on-trend recipes and relevant formats that deliver great taste, quality and value. We’re excited for these new items to become household favorites.”
Fresh Perspective on Frozen Vegetables
Going beyond a traditional side dish of veggies, the newest items in Conagra’s Birds Eye line can be enjoyed as an appetizer, snack, side dish or meal enhancer.
• Fire Roasted – Combining the convenience of frozen with a flame-cooked flavor and texture experience, four new Fire Roasted Vegetables are being introduced: Fire Roasted Corn; Peppers and Onions; Brussels Sprouts; and Carrots. Each offering is ready to serve after in minutes in the oven, while the latter two can also be prepared in an air fryer.
• Dips – Vegetable dips are a top three appetizer on restaurant menus, and Birds Eye now provides a quick and easy way to enjoy them at home. Two new frozen vegetable dips – Buffalo Cauliflower Dip and Spinach & Artichoke Dip – are ready to serve after a few minutes of microwave preparation.
• Fusions — Taking another cue from restaurant menus, two new Birds Eye Fusions – Spring Mix with Garlic Butter or Asian Mix with Sesame Soy Sauce – combine mixtures of on-trend vegetables with tasty sauces to complement any protein.
Frozen Favorites for Every Meal Occasion
Conagra’s frozen meal portfolio has brands and entrees with a diverse range of flavors and price points. From classic comfort food to convenient better-for-you favorites, Banquet, Gardein, Healthy Choice, La Choy, Marie Callender’s, P.F. Chang’s Home Menu and Birds Eye Voila! all offer new flavors to savor, as detailed below:
• Banquet is delivering a mega way to enjoy pizza with three new Banquet MEGA Crustless Pizzas. Cheesy, saucy, and loaded with toppings, the MEGA meals are big on flavor and protein, with new Pepperoni, Supreme and Three Meat offerings weighing in at 25 to 28 grams per 10 oz. package.
• New Skillet and Oven Bake meals from Birds Eye Voila! are promoted as “crowd pleasers with delicious, contemporary flavors that are easy to prepare.” Now available for skillet preparation are Beef & Broccoli and Cajun-Style Sausage & Rice, while are Cheesy Chicken & Rice required oven heating.
• Long known for tasty Asian-style ingredients and sauces in the grocery aisle, the La Choy brand debuts in the frozen aisle with three family-size entrees featuring a pairing of tempura-battered white meat chicken and one of three sauces. Choose from Orange Chicken, General Tso’s Chicken and Sweet and Sour Chicken.
• The Ultimate Plant-Based line from Gardein is known for proteins that look, cook and taste like meat. Four menu pleasers now available in single-serve bowls are Ultimate Plant-Based Sweet & Sour Chick’n, Ultimate Plant-Based Be’f Burrito Bowl, Ultimate Plant-Based Be’f and Broccoli Bowl, and the Ultimate Plant-Based Meatball Marinara Bowl.
• A quartet of casserole-inspired side dishes highlight the new comfort food fare from Marie Callender’s. They feature Cheesy Potato Casserole, Sweet Corn Casserole, Cheddar Broccoli Casserole, and Green Bean Casserole. The brand is also expanding the collection of Duos meals that debuted last year with two new pairings: Beef & Broccoli and Sesame Chicken; and Meatball Marinara and Fettuccini with Chicken & Broccoli.
• P.F. Chang’s Home Menu. Bringing a taste of P.F. Chang’s Bistro to one’s home kitchen are three new restaurant-quality vegetable side dishes. Teriyaki Broccoli, Chili Garlic Edamame, and Sesame Green Beans combine vegetable favorites with dynamic Asian flavors. Each 10 oz. bag is ready to serve after minutes in the microwave.
• Healthy Choice Café Steamers and Simply Steamers. Offering a healthy twist on lasagna, the new Turkey Sausage Lasagna Bowl from Healthy Choice Café Steamers features pasta, a blend of cheeses, marinara sauce and turkey sausage with vegetables. The range also welcomes the new Southwest-Style Chicken Burrito Bowl. Complimenting Simply Steamers’ popular vegetarian Unwrapped Burrito Bowl, this dish is made with 100% natural* chicken with vegetables, a blend of cheeses, and whole-grain brown rice in an enchilada sauce.
• Healthy Choice Power Bowls. With 11% of adults in the United States planning to eat more shrimp in the coming year3, the popular shellfish is debuting on the Healthy Choice Power Bowls menu with a pair of recipes inspired by global cuisines: Mediterranean-Style Shrimp and Shrimp Fajita. Pasta dishes are also new to the Power Bowls assortment. Roasted Red Pepper Romesco Chicken Pasta and Pesto Chicken Pasta feature pasta made with ancient grains, an ingredient central to the trend of better-for-you Italian meals.
