Following similar moves by other major food manufacturers, food and feed giant Conagra expects prices on its food products to rise this year.
The company, which sports seafood brands Van de Kamp’s and Mrs. Paul’s – along with other major brands such as Healthy Choice and Bird’s Eye – said inflation had an impact in its fiscal fourth quarter.
“As the fourth quarter unfolded, input cost inflation accelerated and we now expect fiscal 2022 input cost inflation to be materially higher than we anticipated at the end of fiscal Q3,” Conagra Brands President and CEO Sean Connelly said in a press release. “In response, we have further enhanced the aggressive and comprehensive action plan already being executed, which includes broad-based pricing.”
Given the amount of inflation and its and its broad-based reach, Conagra expect prices for almost all food products – both within retail and foodservice – to increase, Conagra Brands Manager of Corporate Communications Tim Wronga told SeafoodSource.
While Wronga declined to comment on how the price increases will impact specific Mrs. Paul’s and Van de Kamp’s, he said the company’s move “is not just a blanket increase on all products, but instead is a strategic approach to evaluating and pricing our products that is mindful of competitive pricing.”
General Mills also expects a 7 percent increase in cost inflation this year, and will attempt to manage the cost increases with “strategic revenue management, both list pricing, price-pack optimization, [and] trade optimization,” General Mills Chief Financial Officer Kofi Bruce told said on an investor call, CNBC reported.
Additionally, Conagra is revising its FY 2022 guidance to reflect increased inflation, including organic net sales growth that will be flat compared to fiscal 2021 and adjusted operating margin of around 16 percent.
“This impact will be particularly felt in the first half of fiscal 2022, as remediation measures – including pricing – lag the timing of realized cost inflation,” Conagra said.
In its fiscal fourth quarter, Conagra’s net sales decreased 16.7 percent and organic net sales dropped 10.1 percent due to the comparison with the “significant surge” in at-home food consumption at the onset of the COVID-19 pandemic, according to the food-maker.
However, Congra’s fiscal year 2021 sales increased 1.2 percent and organic net sales rose 5.1 percent.
Photo courtesy of Jonathan Weiss/Shutterstock
