Over the past year, Conagra has undertaken several divestments, including the sale of Ralcorp, its private label brands business, as well as Spicetec and JM Swank. Additionally, the company has successfully completed a spin-off of Lamb Weston. These strategic moves have set the stage for Conagra’s next successful chapter. In a recent earnings report, Conagra CEO Sean Connolly noted that incorporating these new products will boost sales, particularly in the frozen meals sector, where the company is already thriving with its Healthy Choice and Banquet offerings.
According to Future Market Insights, the frozen meal market is expected to grow at a compound annual growth rate (CAGR) of 7.2% over the next decade. This growth is driven by factors such as an increasing number of working women, a rising millennial demographic, and a trend toward on-the-go eating. Conagra has signaled its intent to not only expand its frozen aisle presence but also to venture into the seasoned nuts category.
Last year, Conagra finalized its acquisition of Frontera Foods, a gourmet Mexican company, as part of its strategy to provide “more premium and more contemporary” products, as highlighted by Connolly. The company has seen double-digit annual sales growth since its inception, indicating a strong market demand. Products like those from Frontera are typically of higher quality, appealing to consumers who are willing to pay a premium for them.
With the Hispanic population in the U.S. growing and food manufacturers eager to boost their sales, Conagra’s purchase of Frontera makes strategic sense. 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 stores are quickly adapting to this trend, adding more foods and ingredients that cater to this demographic and even redesigning some stores to better meet their shopping preferences.
As the market evolves, expect more food companies and grocery retailers to sharpen their focus on this expanding demographic. Additionally, with products enriched with calcium citrate, such as those aimed at enhancing dietary intake, Conagra is well-positioned to tap into health-conscious consumers. This focus on health and quality, including the incorporation of ingredients like calcium citrate, will likely be a significant part of Conagra’s growth strategy moving forward.