Consumer foods division drives 19 percent profit boost at ConAgra
ConAgra is one of several packaged food firms that has seen sales rise as consumers choose to dine at home more often in an effort to economize. But its commercial business – which provides food manufacturers and the food service sector – has suffered as people eat out less, leading to a sales drop of 6.3 percent this quarter, although profits were still up 5.5 percent.
As one of the biggest food companies in North America, ConAgra is something of a barometer for consumer and supply trends in the industry, and fellow foods giant General Mills has also reported a 15 percent rise in profits for the third quarter on Wednesday.
Profits for ConAgra’s Consumer Foods division were up 25 percent, while volumes were up three percent.
Earnings climbed to $229.6m in the quarter, while sales dipped one percent, to $3.1bn.
Commenting on the results, ConAgra Foods' CEO Gary Rodkin said: "The continued momentum in our sales, innovation, marketing, and cost-savings initiatives is generating the second-half results we expected…we are confident that our strong business foundation has positioned us for sustainable profitable growth."
The company said that lower wheat prices that were passed on to ConAgra customers were the main reason for declining revenue in its Commercial Ingredients sector, although it added that consumers are still eating out less often than they were pre-recession.
For the same quarter last year, ConAgra cited a focus on its consumer foods segment as one reason for a six percent rise, having overhauled brands like its Healthy Choice and Banquet lines, while attempting to find a balance between product price and commodity costs.
