Corporate Profiles - 2020 - 70

COMPANY OVERVIEW

Conagra Brands, Inc.
Investing in additional capacity because of elevated demand
onagra Brands, Inc. lowered its fiscal 2020
organic net sales guidance in February, citing weak consumption trends. Then came
the coronavirus (COVID-19), restaurant closings,
stay-at-home orders and a surge in demand unlike any in the company's history.
During the fourth quarter ended May 31,
Conagra's retail business, which accounts for approximately 80% of total company sales, saw
shipments increase nearly 50% when compared
to the same period of the previous year.
The elevated level of demand had a dramatic
impact on the company's performance during fiscal 2020. Net income rose 24% to $842 million,
equal to $1.72 per share on the common stock.
Fiscal 2020 sales rose 16% to $11 billion.
Other than Conagra Brands' Foodservice
business unit, its three others saw significant
sales increases, including both Grocery & Snacks
and Refrigerated and Frozen Foods, which were
double-digit increases. International business unit
sales rose 7% during the year.
Sean M. Connolly, president and chief executive officer, said during a June 30 conference call
with investment analysts to discuss fiscal 2020
results that he is intent on not sliding back to prepandemic levels of demand.
"Instead of choosing to simply accept the

C

elevated demand as transitory and focus on
maximizing near-term margins, we have chosen to bolster the long-term earnings potential
of our company," he said. "We believe the dynamic environment in which we find ourselves
provides a unique window of opportunity to
maintain the current momentum such that we
maximize our long-term value-creation potential. (To) make that possible, we need to make
investments focused on doing everything in our
power to ensure the physical availability of our
products."
Areas of future investment include increasing manufacturing capacity, ensuring supply
chain effectiveness, e-commerce and product
innovation. As demand spiked, Conagra's Birds
Eye brand hit its ceiling on capacity during the
quarter, and the company committed to investing to ensure it doesn't happen in the future.
Later in the year, the company announced
an investment of $100 million to expand its

meat snacks processing plant in Troy, Ohio.
The plant manufactures Slim Jim and Duke's
Smoked Sausages branded products.
The expansion will add 63,000 square feet
and include new packaging capabilities, new
smokehouses and new drying rooms. The expansion is scheduled to be completed by December
2020 and will create more than 200 new jobs.
"These investments in our supply chain will
allow us to efficiently meet the elevated demand we are seeing today and expect to see
going forward," Mr. Connolly said.
Much of the innovation introduced by the
company during the year focused on plantbased applications. Conagra's Birds Eye, Gardein, Healthy Choice and Marie Callender's
brands developed new offerings to capitalize
on the growing popularity of plant-based products. Flexitarians, in addition to vegetarians
and vegans, continued to drive growth in the
category with nearly 40% of Americans looking to incorporate more plant-based foods into
their diets, according to the company.
New product applications included Birds
Eye Voila! Skillets with Gardein plant-based
protein, Gardein plant-based soups, Healthy
Choice plant-based Power Bowls and Marie
Callender's plant-based pot pies. CP

Chief executive officer -
Sean M. Connolly

Conagra Brands, Inc.
net income

Conagra Brands, Inc.
net sales

Conagra Brands share price
$39

(fiscal years ended in May)

(fiscal years ended in May)

$808

$678

$840

in millions

in millions

$35
$31
$7,938

$9,538

$11,054

2018

2019

2020

$27
$23

2018

70 \ October 2020

2019

2020

Oct.
2019

Dec.

Milling & Baking News * Food Business News * Baking & Snack * Meat+Poultry * Pet Food Processing

Feb.
2020

Apr.

June

Aug.

Corporate Profiles



Corporate Profiles - 2020

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