Editor's Plate: My Second Visit to ConAgra

Twenty years after I first visited, this is a very different company.

By Dave Fusaro, Editor-in-Chief

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Back in 1993, I'm not sure who was newer, greener at his job: me or Phil Fletcher. Sorry, not even close. I was the green one; Fletcher had just stepped up one level into the job he was being groomed for.

My first trip to ConAgra, like the one I just made, also was to visit and interview key executives for a Processor of the Year story, although that was for a different magazine. I was the new managing editor on that publication and this was my first company-of-the-year story. I had only been writing for a food magazine a couple of months by then and had done very little traveling in past jobs, so even a trip to Omaha was a little intimidating.

The company's sprawling world headquarters were still relatively new (four years old, but I think they were constructing some new buildings on the campus). Fletcher had just taken over as CEO from a legendary leader, Charles M. (Mike) Harper, and I think he was a bit intimidated. Even though Fletcher had been president and COO to Harper's roles as chairman and CEO, Harper was a tough act to follow.

Harper took over in 1974 as ConAgra's first chairman and CEO, just three years after the company changed its name and its ambitions from being Nebraska Consolidated Mills. Harper began a shopping spree that catapulted the sleepy Midwestern miller into one of the biggest food companies in the world with sales in excess of $20 billion (20 years later, ConAgra's sales are just $15.5 billion). Harper bought Banquet, then Armour, then Trident Seafoods. Then, in a single deal, he doubled the size of the company by acquiring Beatrice Foods (remember that name?) from Kohlberg Kravis Roberts (remember that name?). But that deal, along with KKR's purchase of RJR Nabisco (remember that name?) brought about the end of leveraged buyouts and the go-go 1980s when credit was ridiculously and dangerously cheap.

But two more interesting Mike Harper footnotes: In 1985 he suffered a heart attack (no surprise) and, forced to dramatically alter his diet, he came up with the idea of a line of healthier frozen foods — Healthy Choice. And he left ConAgra in 1993 to become Chairman and CEO of RJR Nabisco.

But I digress.

Anyway, ConAgra holds a special place in my heart as a result. Even so, it would have been difficult to justify its choice as our Processor of the Year at any point in the past 20 years. The company at times looked like a rudderless ship, buying assets that moved it in a new direction, then selling off ones that no longer fit. Sales once broke $25 billion, but the company was half that size when Gary Rodkin took over as CEO in 2005.

He too did some buying and selling, but I don't think I've ever seen a dogged pursuit like his two-year chase of Ralcorp in 2011-2012. I didn't fully understand it at the time. But as the CEO explains (on p31 of this issue):

"We understand how consumer behavior is changing … We know that people want great-tasting, everyday food for every dollar they spend. And we don’t think this particular consumer mindset is going away – value is here to stay… The industry [was] thinking that things would go back to normal as the economy improved. But it soon became apparent there was a ‘new normal,’ and we realized we were at that proverbial fork in the road.”

So Rodkin placed a very big bet on private label. But not all of his chips. ConAgra has what he considers a healthy mix of products – by my estimations (not ConAgra's) maybe $9 billion in branded food products, maybe $5 billion in private label, and a billion or so in commodities, ingredients and sundry other items.

Many observers of the food & beverage industry say America is destined to catch up to Europe and other parts of the world in consumers' affinity for store brand products. And we are, although not as quickly as most of those predictions.

We can look back now and judge Mike Harper, Phil Fletcher and Bruce Rohde (who came between Fletcher and Rodkin). It will be interesting to see how Rodkin's strategy is judged years from now, perhaps when another "new" ConAgra is someone else's Processor of the Year.

But for now, the party belongs to ConAgra. And we are happy to capture this moment in the company's history and name the company our ninth Processor of the Year.

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