BOSTON — The recent realignment of business segments at B&G Foods, Inc. represents the “sharpening of a strategy,” to generate slow and steady organic growth, Kenneth C. Keller president and chief executive officer of B&G Foods, Inc., said during a Sept. 8 “fireside chat” with industry analyst Andrew Lazar at the Barclays Consumer Staples Conference in Boston.

“I think the shift for me is putting together a strategy and a focus on a portfolio that can actually produce 1% to 2% organic growth,” Mr. Keller said. “That’s a shift because as I said before, we were not doing that.”

Prior to the pandemic it was flat to negative organic growth, he said.

“We’re not expecting crazy growth,” Mr. Keller said. “We’re just expecting to get our fair share of the kind of category growth in some of these categories.”

When Mr. Keller joined B&G a little over a year ago, he saw a portfolio that was too broad and too complex, he said. The company had 54 brands in multiple categories.

“All the businesses were competing for resources,” Mr. Keller said. “So to me, the huge opportunity was how do we reshape this portfolio to have more focus, more long-term potential for both organic growth as well as inorganic growth.”

In June, B&G announced the formation of four business units: Spices and Seasonings, Meals, Frozen and Vegetables, and Specialty.

With the release of second-quarter financial results, B&G lowered its full year EBITDA forecast. Asked by Mr. Lazar whether B&G has sufficient price and productivity in place to cover costs going forward, Mr. Keller said the company has filled up all the pricing necessary to catch up to inflation in fiscal ‘22.

“I do think that next year, we’ll see inflation,” Mr. Keller said. “Our estimates right now on our portfolio are about 3% to 5%. So, we will take additional pricing next year, probably early next year to cover where we see the increases. But the 3% to 5% compares to 20% this year.”

He said B&G entered the year thinking inflation would be in the range of 11% to 12%. With the onset of the Ukraine war, commodities costs were upended, Mr. Keller said.

“Our portfolio is very susceptible to some of the big commodity moves of 2022,” he said. “Twenty percent inflation, I think that’s higher than most of our peers. Soybean oil is probably 40% of our commodity exposure because of Crisco. In the last 18 months, that’s up well over two times.”

Bruce C. Wacha, chief financial officer, added, “As we go thru this economic cycle, we should see margins recover, which should help the math with increased EBITDA. We’ve had two years of increased working capital. So, costs are higher, costs are going into inventory essentially instead of being working capital neutral.

“We’ve had a drag for two years, and that’s kind of not something that we’ve typically experienced for more than a year in or out. There’s a little bit of a normalization that needs to occur and a focus on driving down leverage. That could be accelerated by asset divestitures or equity sales to the extent that it makes sense at a certain price. But certainly, we should get a very good lift just from the economic cycle and the recovery and working capital.”

Any future divestitures likely will occur in the Specialty business unit, Mr. Keller said. The company said it wants to stabilize cash flow and margins in that collection of brands.

“There’s probably some businesses in there that don’t necessarily fit our capabilities or don’t even really align with what we’re trying to do in the Specialty unit,” he said. “Divestiture is definitely part of our future.”