ConAgra CEO: Lower Food Prices ‘Unrealistic’
The food company behind Wesson oil, Orville Redenbacher popcorn, and Hebrew National hotdogs has seen its commodities costs rise 10%.
“We see that moderating over the 12 months or so, but we do not see it declining,” he said. “Therefore, while we may see the slope moderate and prices moderate, it’s probably not realistic to assume you’re going to see sharp downturns in retail pricing.”
The food industry as a whole has seen a downturn in unit volumes since after Thanksgiving late last year, he said, “and it’s hard to put your finger on exactly what the key factor is.” However, he said the effect of growing “input cost inflation” is now fully priced into the cost of food products on shelves today, which may be a factor.
The price of gas is another factor in consumers cutting back spending, he said. “The vast majority of consumers find $4 gasoline difficult to deal with. They just don’t have that much discretion in their disposable income to be able to really handle that. It is a tough market for us.”
To counter that, ConAgra is looking to move further into private-label brands and supplement its core businesses with faster-growing “adjacent” businesses. He also expects there will be mergers into “faster-growing categories and geographies,” as the company tries to double its international business. He gave no details.
From the February 22, 2012, Prepared Foods' Daily News.