ConAgra Foods, Inc. -- 2010
October 1, 2010
ConAgra Foods, Inc. has undergone significant changes since 2006, when the company divested itself of its cheese, meat and seafood businesses, and began its integration under a single supply chain. Since then, the Omaha-based company has further refined its operations through additional acquisitions and divestments. In 2010, the company followed a similar pattern.
In April, the company acquired Elan Nutrition, Grand Rapids, Mich., a manufacturer of snack and nutrition bars. ConAgra said the acquisition will allow it to grow its private label nutrition bar business.
In June, ConAgra acquired American Pie L.L.C., a manufacturer of pies under the licensed Marie Callender’s and Claim Jumper trade names, as well as frozen dinners, pot pies and appetizers under the Claim Jumper name. The company said the acquisition will help it establish a strong presence in the frozen dessert category.
“Both of these purchases reflect our acquisition strategy — find businesses that are great fits and enable us to grow by filling a need within our portfolio or giving us an adjacent category expansion,” said Gary Rodkin, chief executive officer, in the company’s 2010 annual report.
ConAgra also sold its dehydrated and vegetable product operations to Olam International, Singapore. The divestment included almost all of the assets of the Gilroy Foods & Flavors. Following the completion of the sale, ConAgra launched Spicetec Flavors and Seasonings.
In the fiscal year ended May 30, ConAgra Foods, Inc. posted net income of $723,300,000, equal to $1.63 per share on the common stock, down 26% from $979,000,000, or $2.16 per share, in fiscal 2009. Sales for fiscal 2010 fell 3% to $12,079,400,000. ConAgra attributed the lower earnings to restructuring and impairment charges, sluggish sales and weaker performance in the Commercial Foods segment. Operating profit was up 10%, excluding items affecting comparability.
Operating profit for the Commercial Foods segment fell 0.7% during the year, to $539,000,000, while sales fell 8% to $4,077,500,000.
“Quite simply, fewer people eating at restaurants impacted our Commercial Foods results,” Mr. Rodkin explained in the annual report. “But despite that, and on top of one of the worst northwestern potato crops anyone can remember, our Commercial Foods team held its own and continues to be well-positioned for growth.”
Mr. Rodkin said ConAgra expects the company’s new Lamb Weston plant in northern Louisiana to be a “differencemaker” due to its position in the heart of the prime sweet potato growing region.
While Commercial Foods was challenged during fiscal 2010, ConAgra’s Consumer Foods segment flourished.
Operating profit for the Consumer Foods segment rose 17% during the year, to $1,113 million, while sales edged up narrowly to $8,002 million from $7,979 million in fiscal 2009.
Mr. Rodkin explained that ConAgra’s approach to innovation is, and will remain, simple and different.
“We do platform innovation,” he said. “That means we create new concepts, new ways to prepare food, focusing on a particular idea. Steaming, for instance. Our new Healthy Choice entrees take advantage of that platform and are like nothing else in the frozen aisle.” CP