Younger consumers are driving Conagra’s sales

National brands, in particular, are connecting with shoppers looking for both comfort and value.

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Conagra says it’s winning with younger consumers, this as it reported net sales rose 2.1% to $3.06 billion USD for Q2. 

The maker of brands like Hunts, Gardein, Vlasic, Orville Redenbacher and Angie’s Boomchickapop (pictured), also says that the elevated consumer demand continues to exceed its ability to supply. While that signals good things for demand, it meant margin pressures were higher than expected for the quarter, driven by inflation, higher supply chain costs and making investments to maximize product availability.

Conagra says that ongoing ecommerce investment continued to yield results and that ecommerce represents a larger percentage of overall sales than peers.

Meanwhile, according to Sean M. Connolly, president and CEO of Conagra Brands, Millennials and Gen Z represent “the most significant opportunity for long-term value creation” at the company.

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As people shift dollars to eating at home, they’re choosing national brands. And Conagra, Connolly says, is forming relationship with younger demos, delivering “superior relative value” from home and store brands.

“We believe they will remain more value focused than their predecessors,” he says. “As food service bounces back, younger consumers will be value conscious in their focus.”

They’re finding comfort in familiarity of national brands and Conagra’s “purposeful approach,” Connolly says, which will influence how it positions its portfolio for the future.

And according to Connolly, while there are no “philosophical changes” in where it sends marketing dollars, it’s not being as aggressive with in-store advertising, because it’s not prudent to stimulate excess demand when you can’t service it.

Other investments in brand building have remained “robust for several years now,” including innovations in product and packaging, investing to get the right physical placement on shelf and getting “the right kind of support” for those efforts when it comes to in-store.