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    Conagra Foods, Inc.

    1 Conagra DrPhone: +1-402-595-4000
    OmahaNEFax: -
    68102
    United StatesMap Map This Company
    http://www.conagrafoods.comHoover's coverage by Catherine Colbert

    History

    Alva Kinney founded Nebraska Consolidated Mills in 1919 by combining the operations of four Nebraska grain mills. It did not expand outside Nebraska until it opened a mill and feed processing plant in Alabama in 1942.

    Consolidated Mills developed Duncan Hines cake mix in the 1950s. But Duncan Hines failed to raise a large enough market share, and the company sold it to Procter & Gamble in 1956. Consolidated Mills used the proceeds to expand, opening a flour and feed mill in Puerto Rico the next year. In the 1960s, while competitors were moving into prepared foods, the firm expanded into animal feeds and poultry processing. By 1970 it had poultry processing plants in Alabama, Georgia, and Louisiana. In 1971 the company changed its name to ConAgra (Latin for "in partnership with the land"). During the 1970s it expanded into the fertilizer, catfish, and pet accessory businesses.

    Poorly performing subsidiaries and commodity speculation caused ConAgra severe financial problems until 1974, when Mike Harper, a former Pillsbury executive, took over. Harper trimmed properties to reduce debt and had the company back on its feet by 1976. ConAgra stayed focused on the commodities side of the business, but was thus tied to volatile price cycles. In 1978 it bought United Agri Products (agricultural chemicals).

    ConAgra moved into consumer food products in the 1980s. It bought Banquet (frozen food, 1980) and within six years had introduced almost 90 new products under that label. Other purchases included Singleton Seafood (1981), Armour Food Company (meats, dairy products, frozen food; 1983), and RJR Nabisco's frozen food business (1986). ConAgra became a major player in the red meat market with the 1987 purchases of E.A. Miller (boxed beef), Monfort (beef and lamb), and Swift Independent Packing.

    Confident it had found the right path, ConAgra continued with acquisitions of consumer food makers, including Beatrice Foods (Orville Redenbacher's popcorn, Hunt's tomato products) in 1991. In 1997 the company agreed to pay $8.3 million to settle federal charges of wire fraud and watering down grain. That year ConAgra named vice chairman and president Bruce Rohde as CEO; he became chairman in 1998. Also in 1998 the company bought GoodMark Foods, maker of Slim Jim, and Nabisco's Egg Beaters and table spread unit(Parkay). ConAgra bought Holly Ridge Foods (pastries) in 1999 and announced a major restructuring.

    ConAgra bought Emerge, an agricultural and land-use information software provider, from Litton Industries in 2000. It also acquired Seaboard's poultry division and refrigerated meat alternatives maker Lightlife (Tofu pups, Smart Dogs), before buying major brand holder International Home Foods from HM Capital Partners (known as Hicks, Muse, Tate & Furst at the time) for about $2.9 billion. The company then became ConAgra Foods.

    During 2001 the company drew SEC attention and was forced to restate earnings for the previous three years due to accounting no-no's in its United Agri Products division.

    In 2002 the USDA forced ConAgra to recall 19 million pounds of ground beef because of possible E. coli contamination, making it the second-largest food recall in US history. (The largest recall occurred in 1997 when Hudson Foods, later purchased by Tyson Foods, withdrew 35 million pounds of beef.) Later in 2002 ConAgra sold its fresh beef and pork processing business -- one of the largest in the US -- to Booth Creek Management and HM Capital Partners, and it was renamed Swift & Company Swift & Company. (Swift  was acquired by Brazilian beef giant, JBS in 2007.)

    In 2003 the company began supplying packaged meat products for grilling to George Foreman Foods, which sells them via its Web site. That year it sold its Bumble Bee canned seafood business to members of Bumble Bee management and private investment firm Centre Partners Management, and its blue cheese brands (Treasure Cave, Nauvoo) to Canada's Saputo, Inc. for undisclosed prices. It also sold its chicken processing business to Pilgrim's Pride for a stock and cash deal worth about $550 million in 2003.

    Also in 2003 ConAgra agreed to pay $1.5 million in cash and job offers to settle an EEOC lawsuit charging bias against disabled workers at the company's California-based Gilroy Foods plant. The agreement involves the largest disability settlement in the agriculture industry. The dispute dated back to 1999, when Gilroy Foods, then owned by Basic Vegetable Products (ConAgra bought the facility in 2000), after a strike failed to recall disabled workers who were on leaves of absence due to illness or pregnancy or who had a history of illness or injury.

    In keeping with its strategy to focus on its branded and value-added food business, in 2003 ConAgra sold United Agri Products to Apollo Management for stock and securities. The deal was worth about $600 million. In 2004 it sold its minority interest in the beef and pork processing operations of Swift Foods to HM Capital Partners. The deal was worth $194 million. ConAgra also sold Swift's feedlot operations to Smithfield Foods for an undisclosed amount.

    ConAgra sold its turkey hatchery and breeding business to Ag Forte in 2004. It sold its Canadian and US crop inputs businesses and its Spanish feed and Portuguese poultry businesses that year as well. In addition it sold Casa de Oro Foods (the US's third-largest tortilla maker) to the Plaza Belmont Fund II. Also that year ConAgra introduced Golden Cuisine, a line of frozen meals designed for seniors. The company began manufacturing and supplying Golden Cuisine to Meals On Wheels, which distributes the meals, which are formulated for seniors, to the homebound elderly. That year ConAgra also introduced a high-fiber flour, called Ultragrain, that has the taste and texture of refined flour but the nutrition of whole grain.

    In 2005 ConAgra sold its remaining 15 million shares of Pilgrim's Pride to that company for about $480 million. That year CEO Bruce Rhode retired. His replacement was former chairman and CEO of PepsiCo Beverages and Foods North America, Gary Rodkin, who began a company-wide restructuring. The company reorganized its business structure from three channels to two: Foodservice was merged with Food Ingredients and became ConAgra Foods Commercial; the ConAgra Retail channel remained the same.

    ConAgra agreed to pay a $14 million shareholder settlement in 2005 regarding a lawsuit claiming fictitious sales and mis-reported earnings at its former subsidiary United Agri Products.

    In a move to demonstrate its commitment to the humane treatment of animals, in 2006 ConAgra urged its poultry suppliers to consider slaughtering chickens in a more humane manner called controlled-atmosphere killing. The process, which ConAgra has only suggested to its suppliers, is approved by the People for the Ethical Treatment of Animals.

    Rodkin continued the company redo, focusing on portfolio trimming, when, in early 2006, he announced plans to sell a large part of ConAgra's refrigerated-meats business. The brands involved in the sale include some of the company's best-known: Armour, Butterball, and Eckrich. (The Brown 'N Serve, Healthy Choice, Hebrew National, Pemmican, and Slim Jim brands were not included in the portfolio reduction.)  It sold its Cook's ham business to Smithfield Foods for $260 million that year. 

    Not long after that, it agreed to sell of the rest of its refrigerated meats business that it had for sale to Smithfield as well. The deal, which became final in October 2006, cost Smithfield $571 million in cash. That same month, it sold its Butterball Turkey unit to Carolina Turkeys for $325 million. (Carolina subsequently changed its company name to Butterball, LLC.)

    Divesting almost faster than one can keep track of, one day after the Butterball deal was completed, ConAgra sold its MaMa Rosa's Pizza operations to investment firm, the Plaza Belmont Management Group. (MaMa Rosa's is refrigerated -- not frozen, pizza -- and competes in a different market than other pizzas, albeit frozen, powerhouses such as Di Giorno, Tombstone, or Tony's.)

    In another move to improve long-term operating performance, ConAgra announced its intention to sell off its seafood and domestic and imported cheese businesses. To that end, the company sold its surimi business, including the Louis Kemp brand, to Trident Seafoods and its Singleton Seafood and Meridian Seafood to Singleton Fisheries. It sold its specialty and imported cheese operation Swissrose International to investment company, Fairmount Food Group. Late in 2006, the company sold its oat-milling business to investment companies Sequel Holdings and Falcon Investment Advisors.

    The company added to its Lamb Weston branded potato products with the 2008 acquisition of Watts Brothers. With operations in Washington and Oregon, Watts is a vegetable-processing company that has annual sales of some $100 million. It has retail, foodservice, and industrial customers throughout the US, as well as in Mexico, Japan, China, and other Far East countries. The deal also included Watts' organic dairy, fertilizer, cold storage, packaging, and agricultural farming businesses.

    In early 2007 salmonella was found in some of the company's Peter Pan and Great Value (a Wal-Mart product) brands of peanut butter, forcing a nationwide recall of the peanut butter bearing the product code involved. Salmonella food poisoning was linked to some 600 people in 47 states. No deaths related to the peanut better were confirmed. The recall eventually included products made as far back as October 2004. ConAgra shut down the Sylvester, Georgia, plant that was involved in the outbreak and reopened it in Auguts 2007, having spent $15 million on renovation, which included repairing the roof, installing new equipment, and creating a manufacturing process that better separated raw materials from the finished peanut butter.

    Just two months later, the company voluntarily stopped production at the Missouri plant that makes its Banquet and generic brands of frozen turkey and chicken pot pies after learning that the were linked to some 140 cases of salmonella in 30 states. ConAgra did not recall the pies but offered mail-in refunds and store returns. The USDA began an investigation and advised consumers not to eat the pies.

    As part of its strategy to add to its brand-name offerings, in 2007 ConAgra acquired Alexia Foods, a maker of natural frozen potatoes, appetizers, and artisan breads for about $50 million in cash. Later that year the company paid a penalty of $45 million in the wake of SEC charges that alleged the company had misreported its profits for the fiscal years 1999, 2000, and 2001.

    The company acquired Lincoln Snacks Company in 2007. Lincoln's  well-known brands, such as Fiddle Faddle and Poppycock, extended ConAgra's name-brand lineup, which is in line with company strategy. That year it also announced the removal of the chemicals from its microwave popcorn products that are suspected of causing lung ailments in popcorn-plant workers.

    ConAgra sold its trading and merchandising operations (ConAgra Trade Group) in 2008 to a group of investors that included the Ospraie Special Opportunities Fund for $2.8 billion. The sale was part of the company's long-term strategy to exit the commodities business and concentrate on its consumer food products. Saying it couldn't give the brand the attention it needs, in 2008 the company sold its Knott's Berry Farm jam and jelly business to J. M. Smucker.

    In a tragedy that made the evening news, three ConAgra workers were killed and some 40 were injured in an explosion and fire at a company Slim Jim manufacturing plant in Garner, North Carolina, in June 2009. It was later determined that the blast was caused by a natural-gas leak. ConAgra partnered with the United Way, forming the Garner Plant Fund that raised money to assist the victims and their families. The company also continued to pay workers salaries while the plant remained closed for investigation. ConAgra was fined $106,000 by the government in 2010 and the plant was eventually closed.

    During 2010 ConAgra unloaded its Gilroy Foods & Flavors business-to-business unit to Olam International for $250 million. The sale excluded Gilroy's seasonings and flavors businesses.

    In 2011 ConAgra Foods made an unsolicited takeover bid to buy Ralcorp Holdings, a leading maker of private-label snack foods, cereals, and condiments. After proffering an initial bid of $82 per share, ConAgra ultimately offered $94 (valuing Ralcorp at more than $5 billion). However, Ralcorp spurned all bids, saying they were not in the best interests of shareholders.

    In May 2012 the company completed the acquisition of Odom's Tennessee Pride, the #2 producer of frozen breakfast sandwiches in the US.

    In January 2013 ConAgra completed its $6.8 billion purchase of Ralcorp Holdings.

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