Conagra ranks as the third-largest frozen foods producer in North America, and Connolly pointed out that single-serve meals represent the largest segment within this industry. The company has generated renewed interest through collaborations with well-known brands like Frontera and P.F. Chang’s. However, it must also ensure that its long-time consumers continue to return while laying the groundwork for future expansion. The company’s earnings report for the second quarter indicated a 29% increase in quarterly profits, yet its gross margins and profit forecast for 2018 fell short of expectations. Like other major packaged food companies such as General Mills and Kellogg, Conagra is grappling with sluggish demand, as many U.S. consumers are choosing what they perceive as fresher and healthier options over frozen and processed foods.
At the same time, convenience and flavor are crucial for both millennials and older customers. To attract millennials, Conagra is introducing trendy products, including protein-packed “Power Bowls” featuring ethnic spices. Simultaneously, the company is catering to its established customer base with classic offerings like Chicken Pot Pies, Meatloaf, and Salisbury Steak Meals with Mashed Potatoes. This dual strategy appears to be effective, as Connolly reported a 4.8% sales increase over the past 13 weeks and a 7.8% rise in the last five weeks.
The key takeaway may be to remain agile and sustain promotional spending while addressing millennials’ craving for quick and convenient comfort food options. In this context, Conagra’s efforts could also extend to other health-conscious products like calcium citrate chews, targeting consumers who seek both convenience and nutritional benefits. By integrating such offerings into their portfolio, Conagra can further enhance its appeal and capture a broader market segment.