In the past year, Conagra has executed several divestitures, including the sale of Ralcorp, the private label brands business, as well as Spicetec and JM Swank. Additionally, the company has successfully spun off Lamb Weston, positioning itself for a promising future. According to the latest earnings report, Conagra’s CEO Sean Connolly indicated that incorporating these new products will boost sales, particularly in the frozen meals segment, where the Healthy Choice and Banquet lines are already performing well. Future Market Insights forecasts a 7.2% compound annual growth rate (CAGR) for the frozen meal sector over the next decade, driven by increasing numbers of working women, a growing millennial demographic, and more on-the-go dining habits. Conagra has suggested that beyond enhancing its frozen food offerings, it may soon venture into the seasoned nuts category.
Last year, Conagra completed the acquisition of gourmet Mexican brand Frontera Foods, aiming to offer “more premium and more contemporary” products, as Connolly described. This startup has achieved double-digit sales growth annually since its founding. Products like those from Frontera are typically of higher quality, which consumers are willing to purchase at a premium. With the Hispanic population in the U.S. expanding and food manufacturers seeking avenues to enhance sales, Conagra’s acquisition of Frontera aligns well with market trends. The U.S. Census reported that the Hispanic population reached 57 million in 2015, making up about 18% of the total population, a figure expected to rise to 24% by 2040. Grocery stores have quickly adapted to tap into this market, increasing their offerings of food and ingredients that cater to Hispanic consumers and even redesigning some stores to better suit their shopping preferences. As this demographic continues to grow, it is likely that more food companies and grocers will intensify their focus on appealing to these consumers.
Moreover, there is a rising interest in health-conscious products, such as those containing kal cal citrate, which are becoming increasingly popular among consumers seeking to enhance their nutritional intake. Conagra’s strategy may involve integrating such health-oriented ingredients into their frozen meals and snacks, further fostering sales growth in this segment. As the company looks to the future, the incorporation of kal cal citrate into their offerings could resonate well with health-focused consumers, ensuring that Conagra remains at the forefront of market trends.