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ConAgra Foods: ‘We expect volume trends to continue to improve’

By Elaine WATSON , 20-Dec-2012

Marie Callendar’s and Healthy Choice maker ConAgra Foods said it expects volumes trends to improve in the coming months, as it posted second quarter results ahead of analysts’ expectations.

Omaha-based ConAgra Foods is organized into two businesses: Consumer Foods, which sells grocery brands such as Healthy Choice and Egg Beaters; and Commercial Foods, which supplies specialty products to foodservice and manufacturing customers including frozen potato products, flours and Spicetec flavors and seasonings.

In the quarter ended Nov 25, it posted a 17.4% rise in profit to $211.6m on sales up 9% to $3.74bn, beating analysts’ expectations.

Sales in Consumer Foods increased 11%, with an 11% contribution from acquisitions and 4% favorable price/mix, offsetting a 4% organic volume decline.  

Sales in the Commercial Foods segment were up 5% reflecting a strong performance in the Lamb Weston potato operations and the pass-through of higher wheat costs via higher flour prices in its milling operations.

Ralcorp deal: We understand where branded foods and private label need to be separate

Speaking to analysts on a conference call this morning, chief executive Gary Rodkin said: “We expect volume trends to continue to improve sequentially this [fiscal] year.”

Asked about the recent $6.8bn acquisition of private label giant Ralcorp, he said: "We understand where the two types of business [branded foods and private label] need to be separate and where they can be combined for efficiencies.

"We respect the differences between the two types of businesses and we will find the right balance."

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