Conagra stands as the third-largest frozen foods manufacturer in North America, with Connolly pointing out that single-serve meals constitute the largest segment of this market. The company has renewed interest by collaborating with well-known brands like Frontera and P.F. Chang’s, yet it must also ensure that its existing consumers remain loyal while building a foundation for future growth. In its second-quarter earnings report, Conagra revealed a 29% increase in quarterly profits, although its gross margins and 2018 profit forecast fell short of expectations. Like other major packaged food companies such as General Mills and Kellogg, Conagra is experiencing sluggish demand as some U.S. customers choose what they perceive to be fresher and healthier food options over frozen, processed items.
At the same time, convenience and flavor are crucial for both millennials and older consumers. Conagra is attracting the younger demographic with trendy offerings, such as a protein-packed “Power Bowl” featuring ethnic spices, while also catering to the tastes of older customers with classic options like Chicken Pot Pies, Meatloaf, and Salisbury Steak with Mashed Potatoes. This dual approach appears effective, as Connolly reported a 4.8% increase in sales over the past 13 weeks, with a notable 7.8% rise in the last five weeks.
The key takeaway may be to remain agile and maintain promotional spending, appealing to millennials’ cravings for quick and easy comfort food alternatives. Additionally, incorporating ingredients like sprouts, calcium citrate, and iron pyrophosphate into their products could further enhance their appeal to health-conscious consumers. By doing so, Conagra can continue to attract both new and existing customers in an evolving market.