By Angela Chen
ConAgra Foods Inc. has purchased Blake's All Natural Foods, the
latest food-products company to acquire a smaller, natural brand in
an effort to shore up sluggish sales.
Financial terms weren't disclosed. Blake's--which makes natural
and organic frozen meals--will continue to be based in Concord,
N.H.
As consumers embrace foods perceived as healthier, large food
companies are trying to tap into this growing segment to combat
declining sales of traditional packaged and processed foods. Last
September, General Mills Inc. agreed to buy Annie's Inc.--the maker
of natural pastas and macaroni-- for about $820 million, betting
that a bigger presence in the natural-and-organic foods aisles will
energize a business sapped by flagging consumption of breakfast
cereals and other traditional fare. Kellogg Co. recently came out
with Origins cereal and granola, described as "real food prepared
simply," while Campbell Soup Co. launched a line of organic
soups.
"Blake's is a great addition to our existing frozen meals
business and provides more choices to a growing group of people
buying natural and organic foods," said ConAgra Chief Executive
Sean Connolly.
According to the Chicago-based market research firm IRI, the
market for natural and organic frozen single-serve meals, such as
the type that Blake's makes, grew over 33% from 2011 to 2015.
In contrast, overall frozen-food sales, by dollars, have lagged
behind the rate of inflation the past four years, and sales by
number of units have fallen. Dollar sales of frozen juice, chicken
and pizza all are down since 2009, according to market-research
company Nielsen. And sales of frozen meals fell 3% to $8.92 billion
from 2009 through 2013, according to Euromonitor International.
Omaha-based ConAgra--which owns brands such as Marie
Callender's, P.F. Chang's and Healthy Choice--is the nation's
largest producer of store-branded foods. It had discontinued
several of its Healthy Choice dinners, because of lagging sales and
changes in consumer tastes.
ConAgra has struggled with the tough private-label business and
had issues integrating the Ralcorp Holdings Inc. business that it
bought in 2013 for $4.95 billion. Earlier this month, ConAgra named
Mr. Connolly, the former CEO of Hillshire Brands, as its new chief
executive and lowered its earnings guidance for the year ending in
May.
Shares have been up about 4% this year through Monday's
close.
Write to Angela Chen at angela.chen@dowjones.com
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