ConAgra strategy combines name-brand, private-label products

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Posted: Wednesday, February 19, 2014 12:00 am

As grocery shoppers seem to make less distinction between name-brand and private-label products, ConAgra Foods increasingly is working on promotions that involve both types of products, its top executive said Tuesday.

The Omaha-based food manufacturer is working with retailers on in-store promotions that involve both its national brands and the expanded portfolio of private-label products it has sold since acquiring Ralcorp Holdings in 2013 for nearly $5billion.

For example, a dinner display with private-label pasta and Hunt's tomato sauce showed sales gains above instances where similar products were displayed separately.

“The reason these programs work is that consumer acceptance of private brands has grown over the years,” ConAgra Chief Executive Officer Gary Rodkin said in a Tuesday presentation to the Consumer Analysts Group of New York.

ConAgra is also working directly with retailers to develop new private-label lines and products, he said, and in some cases will be “brand-agnostic,” creating a product as either name-brand or store-brand, or reformulating its brand-name products as private-label offerings, with slightly different flavors or packaging.

Going into the Ralcorp acquisition, Rodkin said, ConAgra intended to keep the two separate, but now, he said, “It's a fairly gray area.” The company is creating internal guidelines limiting how far it is willing to go on sharing its own product and packaging innovations with store-brand customers.

In pitching its private-label portfolio to its customers, Rodkin said the firm is telling retailers that stores won't increase profits by continuing to cut prices to the bone on brand-name products.

“The right balance is the everyday value of a very good quality private brand, along with a more rational merchandising of national brands,” he said.

Rodkin also offered details on ConAgra's growth strategies in its consumer brands segment.

In trying to boost its flagging national brands Healthy Choice, Chef Boyardee and Orville Redenbacher's, ConAgra is shifting strategies away from trying to gain new customers who may have “perception barriers” and instead going for more sales among core users.

For example, with Healthy Choice, the company will more heavily pursue its core audience of baby boomers, rather than trying to break new ground in trying to market frozen meals to millennials.

The company is also accelerating deployment across all its products of a strategy it calls “perfect at retail,” with attention to price, packaging, placement and promotion.

As examples, he mentioned bagged Bertolli pasta meals redesigned for club stores and multiple price points among similar ConAgra products, for example Marie Callender's pot pies at $2.50 in addition to Banquet pot pies at $1.

Traditional marketing campaigns aren't working as well on products without clear differences from the competition. Instead, Rodkin said, “What we do in-store, close to the shopper at the moment of decision-making, is critical.”

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