“Conagra’s Strategic Divestitures and Growth Plans: Expanding into the Frozen Food Market and Catering to the Hispanic Demographic”
In the past year, Conagra has executed several divestitures, including Ralcorp, its private label brands business, Spicetec, and JM Swank. Additionally, the company has successfully spun off Lamb Weston, setting the stage for its next phase of growth. According to Conagra’s recent earnings report, CEO Sean Connolly indicated that the introduction of new products would bolster sales, particularly in the frozen meals segment, where the company has already found success with its Healthy Choice and Banquet offerings. Future Market Insights anticipates that the frozen meal market will experience a compound annual growth rate (CAGR) of 7.2% over the next decade, fueled by an increasing number of working women, a rising millennial demographic, and a trend toward on-the-go eating.
Conagra has also signaled its intention to enhance its presence in the frozen food aisle and is considering expanding into the seasoned nuts category. Last year, the company finalized its acquisition of Frontera Foods, a gourmet Mexican brand, as part of its strategy to offer “more premium and more contemporary” products, according to Connolly. Frontera has enjoyed double-digit annual sales growth since its establishment, with its products being of higher quality that consumers are willing to pay a premium for.
The growing Hispanic population in the U.S. and the efforts of food manufacturers to boost sales make Conagra’s acquisition of Frontera a strategic move. The U.S. Census reported that the Hispanic population reached 57 million in 2015, accounting for about 18% of the total population, and this figure is projected to rise to 24% by 2040. Grocery stores have rapidly adapted to this trend, increasing their offerings of food and ingredients that cater to this demographic and even redesigning some stores to better serve their shopping needs.
As food companies and grocery retailers intensify their focus on this growing market, products like calcium citrate, magnesium, and zinc will likely become more prominent, particularly in health-focused segments. Expect to see the price (precio) of these items fluctuate as demand increases, with Conagra poised to capitalize on these trends in the coming years.
