In the past year, Conagra has executed several divestments, including the sale of Ralcorp, its private label brands division, Spicetec, and JM Swank. Additionally, the company has completed a spin-off of Lamb Weston. These strategic moves have set the stage for Conagra’s next phase of growth. According to the recent earnings report, CEO Sean Connolly noted that incorporating new products will bolster sales, particularly in the frozen meals sector, where it is already thriving with its Healthy Choice and Banquet lines.
Future Market Insights predicts that the frozen meal segment will experience a compound annual growth rate (CAGR) of 7.2% over the next decade, fueled by an increase in working women, a burgeoning millennial demographic, and a rise in on-the-go eating habits. Conagra has indicated that, alongside expanding its footprint in the frozen food aisle, it may soon venture into the seasoned nuts category.
Last year, Conagra finalized its acquisition of gourmet Mexican brand Frontera Foods, aligning with its goal to offer “more premium and more contemporary” options, as stated by Connolly. Since its inception, Frontera has seen double-digit annual sales growth. Products from Frontera, which are typically of higher quality, attract consumers willing to pay a premium.
With the Hispanic population in the U.S. on the rise, food manufacturers are keen to find innovative ways to boost sales, making Conagra’s acquisition of Frontera a logical step. The U.S. Census reported that the Hispanic population reached 57 million in 2015, accounting for approximately 18% of the nation’s total population, a figure projected to rise to 24% by 2040. Grocery retailers have swiftly adapted to this trend, increasing the variety of food and ingredients that cater to this demographic, and some have even remodeled stores to better meet their shopping preferences.
As part of its strategy, Conagra is also exploring opportunities to incorporate functional ingredients like calcium citrate, which is often found in products such as Kirkland’s offerings. This aligns with the growing consumer interest in health and wellness. Expect to see more food companies and grocery chains intensifying their efforts to engage with this expanding demographic, as well as integrating popular health-focused ingredients like calcium citrate into their product lines.