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Conagra (CAG) Unveils Product Innovations to Boost Growth

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Conagra Brands, Inc. (CAG - Free Report) is on track with a range of innovation and brand-building efforts for exploring growth prospects. Moving along these lines, the leading branded food company unveiled an array of snack innovations at the National Association of Convenience Stores' (NACS) 2021 show. The company expects to share the new product assortment with customers to help them develop a consumer-friendly in-store strategy.

Conagra, with a $2.7-billion snack portfolio, will debut innovations under brands like BiGS Sunflower Seeds, Slim Jim and ACT II popcorn. In this regard, management is optimistic about the debut of the Slim Jim Original 'n Cheese Big Boss. Conagra is also introducing ACT II ready-to-eat popcorn category in the Butter flavor. It will also display an extensive meat snack portfolio including Big Mama pickled sausage among others. Apart from these products, management will showcase its assortment of merchandising vehicles like racks and displays. These items are beneficial for great assortment, improved placement and better product visibility aimed toward boosting impulse buying.

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Focus on Innovation & Buyout

Conagra has been strongly committed toward undertaking innovation, which is the key to the company’s success. Despite the pandemic, the company is focused on carrying out innovation for its customers as well as consumers. The company on its fourth-quarter fiscal 2021 earnings call stated that it delivered a robust innovation slate in fiscal 2021, and received favorable customer response as demand for its products remained high amid the pandemic. The company saw higher household penetration as well as repeat rate in fiscal 2021, wherein it continued to see market share gains. Conagra also has a solid innovation pipeline for fiscal 2022.

Conagra acquired Pinnacle Foods in October 2018. The combination of the two companies is appropriate, given the increasing demand for frozen foods and snacks. The consolidation of these food companies has helped the company create a robust portfolio of leading, iconic and on-trend brands. The acquisition is ramping up innovation and enabling the company to enjoy the long-term benefits in the frozen foods space. Management has been boosting some of the Pinnacle Foods’ business banners, especially the Gardein brand that holds a solid position in the plant-based meat-alternatives food space. Apart from this, cost synergies from Pinnacle Foods’ buyout have been supporting the company’s gross margin performance.

We believe that the Zacks Rank #3 (Hold) company’s solid focus on customer-friendly innovations, evident from the latest debuts along with the strategic buyout, positions it well to meet evolving consumer demand.

Shares of Conagra have dropped 5.5% so far this year against the industry’s 1.6% growth.

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