A Study in Contrasts: General Mills and ConAgra

The very first two food company CEOs to speak at financial analysts presentations this week were polar opposites in how they view success in the marketplace.

General Mills was all about understanding the consumer, celebrating its brands and spending to promote them, and growing overseas.

ConAgra was about understanding its retail partners, growing its private label business, finding operational economies and otherwise hunkering down in Omaha, Neb.

"Holistic margin management" was the approach explained by Ken Powell, chairman and CEO of General Mills, who was the first presenter to this year's Consumer Analysts Group of New York meeting Feb. 18 in Boca Raton, Fla. He talked glowingly of numerous new products pouring out of his company's R&D pipeline, including new cereals, dinner kits from Hamburger Helper and Old El Paso, and biscuits and bars.

Powell and other company officers talked about recently breaking ground on a yogurt factory in China and the success of its year-old Latin American acquisition, Yoki.

"There's plenty of growth to be had," said Powell. "It's our job to go out and get it."

Batting second, ConAgra CEO Gary Rodkin described a company in transition that was nearing the end of a difficult fiscal year (ending in May).

ConAgra's foodservice division faced two huge setbacks: the loss of a large distributor and a problem with the quality of its potato crop. Rodkin was reversing a strategy of finding new consumers for key brands, particularly Healthy Choice, Chef Boyardee and Orville Redenbacher products. "We tried but did not succeed," he said, so the new plan is to get core consumers of those brands to buy more. There also were "short-term operational challenges."

Even the private label business, which grew impressively during the recession and on which ConAgra has placed a very large bet with the purchase of Ralcorp, experienced flat sales last year. And the integration of Ralcorp has not been without problems. "We learned a lot of tough lessons this year," said Rodkin. "Still, we are in a better position than we were six months ago."

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