The international segment of the company has grown robustly, driven by growth in its products portfolio. In this segment, products like Nature Valley protein and Fiber One bars each achieved more than $100 million in the first year of sales. The Nature Valley protein bar and Fiber One bars are famous among consumers as a convenient source of protein and energy.
To drive future growth from its product portfolio General Mills, Inc. (NYSE:GIS) will launch new products this summer, including Nature Valley oatmeal squares and Fiber One 90 bars. With this launch, its international segment expects net sales to increase 5%, year-over-year, to $1.38 billion in the second quarter of fiscal year 2014.
Increasing revenue opportunities from acquisition
ConAgra Foods, Inc. (NYSE:CAG)’s consumer food segment grew its net sales to $14.6 billion, up 34%, due to the acquisition of Ralcorp in January 2013. ConAgra Foods, Inc. (NYSE:CAG) acquired Ralcorp to expand its presence in the private label food industry, which includes categories as cereal, cookies and pasta. The acquisition brings $4.5 billion in private label sales to ConAgra Foods, Inc. (NYSE:CAG) making it the largest private label food company in North America. After the acquisition, ConAgra Foods, Inc. (NYSE:CAG) upgraded the pricing strategies of Ralcorp and is continuously increasing its sales force. With these strategies, Ralcorp expects to turn around in the middle of fiscal year 2013, prompting ConAgra Foods, Inc. (NYSE:CAG) to increase its cost synergy estimates from the earlier $225 million to $300 million in the next three years.
ConAgra’s consumer food segment’s frozen breakfast products have increased around 30% over the last five years. Frozen dessert pies primarily drove this growth. The product advertisements succeeded with customers, driving sales and volume. To further develop the consumer food segment, ConAgra is focusing on development of a frozen food product line with new cooking innovation and marketing strategies.. The company expects to join hands with H.J. Heinz Company (NYSE:HNZ), Kellogg, General Mills, Inc. (NYSE:GIS) and Nestle U.S.A. to promote its frozen product line. The advertisement campaign is expected to cost around $50 million. With this, ConAgra expects its consumer food segment’s net sales to increase from $2.4 billion in the second quarter of fiscal year 2013 to $2.5 billion in the second quarter of fiscal year 2014.
Conclusion:
Kellogg registered growth in its revenue with the acquisition of Pringles. It also faced tailwinds in its cereal segment but expects growth with the launch of hot cereal.
General Mills, Inc. (NYSE:GIS) grew with its yogurt brand, Yoplait. It is also planning for growth in its international segment with the launch of new products.
ConAgra Foods expects cost synergies from its acquisition of Ralcorp, and it is poised for growth in its consumer food segment.
Looking at growth prospects in each of these companies, I recommend a buy.
The article Yummy Returns from 3 Packaged Food Leaders originally appeared on Fool.com and is written by Madhukar Dubey.
Madhukar Dubey has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Madhu is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
