Conagra posts strong Q1 2021 results: ‘Our business is healthy, our products are relevant, and our capabilities are strong’
“Our first quarter results demonstrate that our business is healthy, our products are relevant, and our capabilities are strong,” said Conagra president and CEO Sean Connolly.
The sales gains in Conagra's retail segments made up for the continued loss to its foodservice segment, which saw net sales decline 21.8% to $195m. In addition, corporate expenses decreased by 22.5% to $77m, primarily driven by lower corporate restructuring expense.
Other major activity for the quarter included the agreement to sell its peanut butter-filled pretzel brand, H.K. Anderson, to Utz Quality Foods, LLC, for a purchase price of less than $10m, reported Utz.
Strong performance across new and old brands
Organic net sales and volumes continued to benefit from increased at-home eating, which the company predicts will continue well into the future. According to Conagra, the percentage of eating occasions consumed at-home remains elevated at 84% and above recession years from 2008 to 2009 of 81%. Additionally, the percentage of consumers repeating their purchase two or more times increased from 80% a year ago, to 84% currently.
Many of Conagra’s grocery brands including Hunts, PAM, Vlasic, Duncan Hines, Wishbone, Slim Jim, Orville Redenbacher's, Act II, Swiss Miss, and Snack Pack, experienced double-digit sales gains in the quarter.
Conagra’s meat snack brands (Slim Jim and Duke’s) , popcorn offerings (Act II, Orville Redenbacher, and Boom Chicka Pop), and ‘sweet treats’ (Swiss Miss, Snack Pack, and Duncan Hines) posted 20.1%, 19.5%, and 15.4% sales growth, respectively.
Within its refrigerated & frozen segment, sales of frozen single-serve meals grew 17.7% in the quarter to $2.4bn, frozen multi-serve meals were up 10% to $848m, and plant-based meat alternatives rose 35.7% to reach $135m in sales. Frozen vegetables remained stable registering +0.7% growth to reach $1.2bn in sales for Q1 2021.
Recent product innovation including Birds Eye zucchini fries, Orville Redenbacher popcorn with avocado oil, Duncan Hines’ keto cups, and Gardein Ultimate Plant-Based Jerky, performed well for the quarter generating 17% of annual retail sales for the third year in a row, reported Conagra.
Inventory replenishment stabilizes
Connolly added that the quarter exceeded expectations in terms of net sales and profitability as Conagra continued to make investments to ensure the physical availability of its products.
“Now that customers have begun rebuilding inventories and we have increased production capacity in certain areas of our business, we are selectively increasing our marketing support for the businesses where capacity permits. These investments are intended to help sustain brand momentum and maximize the long-term value of our consumer base," he said.
