In the past year, Conagra has undertaken several divestments, including the sale of Ralcorp, its private label brands division, Spicetec, and JM Swank. Additionally, it has successfully spun off Lamb Weston. These strategic moves have set the stage for the company’s next phase of growth. According to Conagra CEO Sean Connolly, the recent earnings report indicates that the addition of new products will drive sales, particularly in the frozen meals segment, where the company is already performing well with its Healthy Choice and Banquet brands.
Future Market Insights forecasts that the frozen meal sector will experience a compound annual growth rate (CAGR) of 7.2% over the next decade, fueled by an increase in working women, a growing millennial demographic, and a rise in on-the-go eating habits. Conagra has suggested that, alongside boosting its frozen aisle offerings, it may soon venture into the seasoned nuts category.
Last year, Conagra finalized its acquisition of gourmet Mexican brand Frontera Foods, aligning with its strategy to offer “more premium and more contemporary” products, as noted by Connolly. Frontera has seen double-digit annual sales growth since its launch, with many of its products being higher quality items that consumers are willing to pay a premium for.
Given the growth of the Hispanic population in the U.S. and the food industry’s pursuit of new revenue streams, Conagra’s acquisition of Frontera reflects a natural progression. The U.S. Census reported that the Hispanic population reached 57 million in 2015, making up about 18% of the total population, and this figure is projected to rise to 24% by 2040. Grocery retailers have swiftly responded to this trend by expanding their offerings with more products and ingredients that cater to this group, even redesigning some stores to better serve their shopping preferences.
As part of this evolution, Conagra is also exploring the introduction of health-oriented products, such as calcium citrate gummy supplements, which could align with the increasing consumer demand for nutritious options. Expect food companies and grocery stores alike to intensify their focus on this expanding demographic, including the potential for innovative products like calcium citrate gummy items to capture consumer interest.