Ralcorp has strengthened its leadership position in private label through recent strategic acquisitions and enhanced customer relationships. According to ConAgra, the two companies’ portfolios are a complementary fit, with very little overlap in terms of offerings. Ralcorp’s private label offerings include cereal, pasta, crackers, jellies and jams, syrups, frozen waffles, and more. Ralcorp’s total annual sales of approximately $4.3 billion also include a branded and commercial / foodservice portfolio.
Gary Rodkin, chief executive officer of ConAgra Foods said the acquisition of Ralcorp was a logical and exciting step for ConAgra Foods. “Adding Ralcorp provides us with a much larger presence in the attractive and growing private label segment and accelerates our Recipe for Growth strategy,” he said. “The transaction will allow us to apply our scale and combined operational expertise to this important growth area, and will strengthen our position as one of the leading food companies in North America.”
“We believe the two companies are a great fit, and our employees will benefit as part of a larger diversified organization with the necessary scale and resources to be a leader in today’s rapidly evolving marketplace,” commented Kevin Hunt, chief executive officer and president of Ralcorp.
The acquisition of Ralcorp adds to ConAgra Foods’ existing private label business of approximately $950 million to create the largest private label packaged food business in North America, with approximately $4.5 billion in combined annual private label sales. Ralcorp fits well with ConAgra Foods’ Recipe for Growth strategy, set 18 months ago, which includes expansion in the private label segment, growth in its core business and adjacencies, and expansion internationally.
According to industry analysts, private label now represents 18% of sales in the packaged food market in the U.S. and has consistently demonstrated growth in excess of the overall food market over time. ConAgra Foods’ combination with Ralcorp creates an enhanced platform that will allow ConAgra Foods to capitalize on, and contribute to, that compelling long-term growth trend while generating significant efficiencies.
“Clearly, consumer dynamics have changed since the recession and we expect growth in private label food to continue to outpace growth in branded food,” Mr. Rodkin, added. “At the same time, we remain very proud of and fully committed to our brands, which will remain the largest part of our business and are found in 97% of America’s households. We believe our combination of branded, private label and commercial offerings, supported by leading functional capabilities, represents a unique and balanced approach that allows us to address the full range of customer and consumer requirements and adapt to the changing demands of the food industry.”