ConAgra Foods said today (21 December) that it has been able to growth sales and market share in a price-sensitive environment without resorting to “unsustainable” promotions or “deep discounting”.


Speaking during a conference call with analysts, CEO Gary Rodkin insisted that ConAgra’s consumer foods business was able to report a “strong” second-quarter performance due to its focus on brand building.


ConAgra revealed that its consumer foods sales, which account for 64% of total revenue, rose 3% on volume growth of 2% during the quarter. Consumer food earnings climbed 31% amid lower input costs.


During the period, ConAgra increased its marketing and promotional budget by just over 25% year-on-year – or US$24m – Rodkin revealed.


“We are confident that we are able to spend against the priority brands in a way that is meaningful,” he insisted.

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Despite the price-sensitive nature of the US market, Rodkin said that ConAgra was avoiding heavy promotional activity and keeping the focus firmly on innovation and marketing.


“Going forward, we’ll be rational with what we do in the market place and we’ll continue with our marketing and innovation,” he commented. “It’s not about discounting.”


While ConAgra has not entered into tit-for-tat promotional activity, management said that it expects continued growth in the back half of the year.


“On a like-for-like basis we see growth in our consumer foods unit in both volume and dollars,” ConAgra management said. “Marketing innovation and smart merchandising will continue to drive volumes.”


Nevertheless, Rodkin observed that value was also driving consumer purchasing behaviour.


“Value is here to stay and we believe that our portfolio is well-set from a value standpoint. At the same time we also believe strong marketing and innovation can drive growth,” he reiterated.