QUOTE AND NEWS
Benzinga  Jan 21  Comment 
TreeHouse Foods, Inc. (NYSE: THS) announced Wednesday, that it priced its previously announced underwritten public offering of 11,538,461 shares of common stock at $65.00 per share. The offering includes a 30-day option for the underwriters to...
newratings.com  Jan 19  Comment 
WASHINGTON (dpa-AFX) - ConAgra Foods, Inc. (CAG) announced that it will work toward a supply of 100 percent cage-free eggs in its U.S. operations by 2025. "This decision is part of ConAgra's ongoing commitment to the humane and...
Benzinga  Jan 14  Comment 
TreeHouse Foods Inc. (NYSE: THS) released after Wednesday's market close a business update concerning its proposed acquisition of ConAgra Foods Inc (NYSE: CAG)'s Private Brand. TreeHouse Foods confirmed that 9,500 employees, including more than...
Benzinga  Jan 13  Comment 
TreeHouse Foods (NYSE: THS) announced today that it will hire an additional 140 permanent employees from ConAgra, doubling the previously planned Omaha employee base. In total, 9,500 employees, including more than 280 Omaha-based employees, are...
Benzinga  Jan 8  Comment 
Shares of TreeHouse Foods Inc. (NYSE: THS) were trading lower by around 0.33 percent shortly after Friday's opening bell. The company offered an update on its proposed acquisition of ConAgra Foods Inc (NYSE: CAG)'s private label...
Benzinga  Jan 7  Comment 
TreeHouse Foods (NYSE: THS) announced today that the required waiting period has expired under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 ("HSR") in connection with the Company's previously announced acquisition of ConAgra Foods'...
SeekingAlpha  Jan 5  Comment 
Benzinga  Dec 23  Comment 
On CNBC's Fast Money Halftime Report, Jon Najarian said that ConAgra Foods Inc (NYSE: CAG) is trading modestly higher as it reported better than expected profit, but it missed on revenues. Stephanie Link believes that, seasonally, this is a...
SeekingAlpha  Dec 22  Comment 
Benzinga  Dec 22  Comment 
Following the market opening Tuesday, the Dow traded up 0.07 percent to 17,263.94 while the NASDAQ climbed 0.08 percent to 4,972.93. The S&P also rose, gaining 0.13 percent to 2,023.79. Leading and Lagging Sectors On Tuesday, basic materials...




 

ConAgra Foods (NYSE: CAG) is a major manufacturer, packager, and distributor of consumer and commercial food products. It owns and operates brands such as Healthy Choice, Chef Boyardee, Hunt’s, Orville Redenbacher’s, Reddi-Wip, Slim Jim, and Hebrew National.[1]

ConAgra holds a portfolio of well-recognized brands, and is increasing sales of these items through an increased advertising budget. With high brand awareness, ConAgra products command a large percentage of shelf space at both traditional and low-cost retailers, which further drives recognition and sales. The company earned $12 billion in revenue and $726 million in net income in 2010.[2] with a market share of 13% in frozen snacks

However, many of these brands are high-fat or snack foods, and ConAgra will have to address shifts in consumer commodities.

Company Overview

ConAgra's products fall into the following categories:[3]

International Foods

Contributing only five percent to total sales, ConAgra sells many brands in the global market. The majority of international sales come from Canada and Mexico.

Ongoing Changes to ConAgra's Business Plan

In 2003, ConAgra introduced a plan to integrate its businesses and improve profitability. As a large, cohesive company, ConAgra would be more efficient and better able to compete with competitors who are integrated packagers.

The following are what this strategic plan consists of:

Divestitures

ConAgra sold all businesses that were either too complex to integrate with the core businesses or did not achieve a profit margin greater then ConAgra's benchmark margin rate. Notable spin-offs include: Butterball, Armour, LunchMakers, and Louis Kemp Seafood.

Cost Savings

ConAgra plans to cut co

Advertising

The company plans on spending more on advertising in general to elevate sales. ConAgra will prioritize advertising funds on the brands that make-up the largest portions of sales, which have not seen strong advertisement campaigns in years. On the other hand, this directional move in advertisement will take dollars away from the less well-known brands and sales will drop amongst those products.

Brand Awareness

In ConAgra's consumer goods business, there is no one factor more important then brand awareness. How well do customers recognize your brand? If a customer recognizes your brand they are more likely to buy it, increasing that product's sales. Products are shelved in stores according to their popularity among customers (the most sales). If your product is selling for the stores, it will be placed in areas where even more customers will see and buy it. In addition, when you change a product, if your product is well placed within stores, that change will be more quickly recognized by the customers.

In recent years, ConAgra has focused much of its marketing campaign on their lower priority (less well-known) brands in order to gain brand awareness in those products' audiences. This strategy proved to not be as profitable as ConAgra had hoped and let higher priority brands lose brand awareness as marketing dollars were taken away from them. The market sentiment is that ConAgra needs to develop new, innovative products in order to maintain its position in the market amongst this audience.

ConAgra's new advertising campaign should increase brand awareness amongst their products and get products better placement in the stores. This is especially the case for brands that have lost shelf space in previous years while ConAgra has been focusing on its smaller brands.

It should be noted that overall many of ConAgra's products are not within the top three known brands in their product category, but when it come to[value-oriented customers they are the most recognizable. Hence, they have the highest sales numbers and best shelf placement in stores like Wal-Mart.

Articles like this rellay grease the shafts of knowledge.

Trends and Force

Dietary Trends

To read a more detailed discussion of consumer health trends, see also Health and wellness.

Dietary trends in the United States are becoming healthier and a social push for increased health consciousness is apparent. Most of ConAgra's products are not considered healthy, with many falling in the categories of snack food, high-fat, high sugar and highly processed. Many believe this may be an issue for ConAgra in terms of staying competitive in the long-term.

Some of ConAgra's research and development is focused on this ongoing trend. They have already made some changes, i.e. offering "light" versions of some snacks. In a recent paper ConAgra self-reported that it has made improvements regarding transfats, sugar, and salt in its brands.

Public Perceptions and Health Scares

Food companies are very sensitive to contamination issues because these issues can scare the public and damage consumer loyalty and trust. However, it should be noted that this might be less of the case with ConAgra because they market their products under individual brand names.

Competitors

ConAgra has a strong position amongst its competitors in terms of market share. In this chart the proxy for this number is the total number of sales by the company in the last twelve months (TTM Total Sales). ConAgra has less market share then Kraft, more then Hormel Foods, and about the same as General Mills. Some may consider this impressive because ConAgra has yet to gain market share in the international market while Kraft and others have.

ConAgra's margin, the percentage of each sale that becomes profits, is relatively low when compared to competitors. Margin is known as a good measure of profitability but could also be a signal about who ConAgra's customers are, i.e. they may be looking for the best deal and, by taking less of a profit, ConAgra attracts them to their products.

References

  1. CAG 2010 10-K "General Development of Business" pg. 1
  2. CAG 2010 10-K "Narrative Description of Business" pg. 3-4
Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki