Conagra’s CEO Says Pandemic Sparked Frozen Veggie ‘Renaissance’
(Bloomberg) -- The head of Conagra Brands Inc. expects demand to remain elevated for some -- but not all -- packaged food after the pandemic subsides.
The grocery mainstay, with brands such as Vlasic pickles and Duncan Hines baking mixes, is investing in its manufacturing capabilities for products likely to stay in demand, according to Chief Executive Officer Sean Connolly. While some canned goods, for example, will likely tail off, he said categories such as frozen vegetables and snack foods are still going strong.
“Frozen is in the midst of a renaissance,” Connolly said in an interview with Bloomberg News. Covid-19 drove an initial spike in demand, he said, and customers are finding the products to be generally better than they remember.
Conagra is trying to identify the likely winners and losers in its product lineup as companies begin to look to a more normal environment after the pandemic. Makers of packaged food benefited as consumers stocked up on comfort foods and other household staples over the past year, a trend that is beginning to dissipate.
Its shares rose less than 1% at 2:27 p.m. in New York. Conagra fell 6.5% this year through Tuesday, trailing a 4.7% advance in the S&P 500 Index.
The company has invested in its Birds Eye production plants to support growth after frozen vegetables “really hit the wall on capacity” during the pandemic, Connolly said. The company is also modernizing facilities making products such as Slim Jim meat snacks and has ramped up production of popcorn.
But not every product that saw a pandemic bump is getting investments for long-term increased production, Connolly said. For example, Conagra got help from third-party manufacturers to accommodate a surge in sales of Chef Boyardee canned pasta products.
“We’re not sitting here today expecting Chef Boyardee, as an example, to have one of these significantly higher burn rates post-pandemic,” Connolly said. “But when we look at frozen, when we look at snacking, we do.”
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