Food Business News - July 10, 2018 - 14
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grocery stores, so a return to growth and
interest in the center frozen aisles is notable. Most of this has to do with frozen
food companies finally coming around
to some self-reflection and altering the
products they have relied on for so long
in order to better meet consumers where
they currently are (as opposed to consumer priorities suddenly shifting back
toward processed frozen foods)."
During the conference call, Mr.
Connolly said, "As you know, I've been
saying for years that there is significant
opportunity in frozen. It's a large space
with long-term tailwinds. This transaction positions us to continue to build on
our success and deliver even more great
products for our consumers."
Mr. Connolly added that the strategic rationale for acquiring Pinnacle
innovative and on-trend items such as
riced vegetables and cauliflower items
with bold flavors - all items that are
helping to fuel growth," he said. "This has
been further helped along by a migration
Conagra Brands frozen foods retail sales
(excluding ice cream, novelties and beverages)
Sean Connolly, Conagra Brands, Inc.
Peer 1 Combined Peer 2 Conagra Pinnacle Peer 3 Peer 4 Peer 5 Peer 6
Source: Conagra Brands, Inc.
©2018 Agropur, inc.
Food Business News
Foods "is clear." He noted the complementary product portfolio, enhanced
scale in frozen foods and "more opportunities" for innovation. When an analyst
on the call pressed Mr. Connolly about
what the innovation opportunities may
be, he used Pinnacle's Duncan Hines
brand as an example.
"Duncan Hines, if you look at the
fantastic innovation that's come out of
(the) Pinnacle team on Duncan Hines in
the last year or so, it's really demonstrating that Duncan Hines operates well as a
sweet treat ... And we think there is real
innovation opportunity still ahead there,
and it fits squarely with what we do in
sweet treats where we have great brands
like Swiss Miss and Snack Packs. So
that's very close to home for us."
Mr. Warner echoed Mr. Connolly's
sentiments and said Pinnacle's strength
extends beyond frozen ready meals.
"It has a huge presence, primarily
through its Birds Eye brand, in frozen vegetables, which has increasingly included
Peer 7 Peer 8
Peer 9 Peer 10
Peers include current acquisitions
for many consumers away from heavy
consumption of fresh vegetables and
toward leaning on frozen varieties, due to
convenience and concerns about waste of
fresh items; Pinnacle's selections all offer
benefits to consumers here."
While the proposed Pinnacle acquisition dominated the news the day it was
announced, Conagra Brands also reported positive results for fiscal 2018, ended
May 27. Net income for the year totaled
$808.4 million, equal to $2 per share on
the common stock, and an improvement
when compared with the same period of
the previous year when net income was
$639.3 million, or $1.48 per share.
Sales for the quarter rose a little
more than 1% to $7,938.3 million.
Three of the company's four business
units experienced sales increases during
the year, including Grocery & Snacks
(2.4%), Refrigerated & Frozen (3.8%) and
International (3.4%). Foodservice segment
sales fell 2.2% during the year.
"Fiscal 2018 marked another year
July 10, 2018