Conagra posts solid Q1 results driven by accelerated snacks and sweet treats growth

The US food giant, which recently acquired Pinnacle Foods​​ to cement its position in the frozen aisle, registered a 1.2% organic net sales increase during the period, reaching $1.83bn.

Sales for the grocery and snacks segment increased 3.4% to $771m, with the acquisition of Angie’s Boomchickapop popcorn adding 330 basis points.  

Additionally, sales for Conagra’s refrigerated and frozen segment increased 3.2% to $635m with the acquisition of Sandwich Bros of Wisconsin adding 180 basis points.

New approach

Connolly noted the US snacking category is performing well, and Conagra has been able to manage brands in its snacks portfolio with “a greater focus on speed, agility and innovation.​

“We’ve started to see the impact of our efforts,”​ he said. “While it’s still early days in our efforts to renovate brands in this segment and provide the appropriate support behind them, we are pleased to have returned to positive organic net sales growth on a year-over-year in the last two quarters led by the snacks business.​

“We are also gaining share, and our dollar sales growth has been significantly outpacing that of the categories over the past year,” ​added Connolly. “Our two-year growth in snacks and sweet treats continues to accelerate.”​

He mentioned that during the NACS show to be held in Las Vegas from October 7 to 10, 2018, Conagra will present its new approach to boost its sweets and snacks segment to attending retailers, including item innovations, merchandising and brand support.

Market penetration

According to Connolly, Conagra wants its snacks to be available in every channel possible.

“It’s important for us to stay top-of-mind,” ​he said.  ​

“Some of our investments in new channel penetration, such as coffee shops, won’t necessarily drive meaningful volume, but those investments are extremely meaningful in terms of getting in front of our consumers and positioning the brand.”​

He noted the company has made progress on this front with several key brands, such as Boomchickapop at coffee shops, Duke’s on airplanes and David Seeds at ballparks across the US.

“We are continuing to focus on the e-commerce channel, which has led to over 40% growth in Conagra’s e-commerce sales for the quarter,”​ he added.

Conagra forecasts its next year’s revenue growth to be in the range of 1% to 2%.