Conagra Balances Pricing, Merchandising Decisions With Consumer Value Mindset

Overcoming Disruption

In the second half of fiscal year 2025, two of the company’s key supply chain segments faced disruption: frozen meals that contained chicken struggled with stalled production, and frozen vegetables faced a shortage due to higher-than-expected demand. 

This was a significant hit as the frozen and snacks category represents about 70% of the company’s retail business. It led to a loss of sales, increased costs due to the company seeking assistance from external manufacturers, and a merchandising pullback as Conagra struggled to get products on shelves. 

Within the frozen category, volumes improved 3.2 points in the first quarter compared to the 2025 Q4 growth rate. To drive increased improvements, the company has been moving forward with a supply chain modernization effort, with planned investments in the baked chicken facilities set to be completed in Q2.

“[It’s] an ambitious initiative to reengineer our core work processes, leveraging technology, including AI,” said Connolly. “We have kicked that work off to accelerate growth and lower costs. The advancement of our supply chain resiliency investments, including the chicken plants, will enable us to repatriate some of that outsourced production going forward at lower cost.”

[Learn more about the supply chain modernization program.]

Meeting Consumers Where They Are

On top of this, Conagra continues to face hurdles related to high inflation, particularly for beef, pork, turkey and egg products. 

“We’re implementing targeted pricing, largely in our canned products, but also on select sweet treats within our snacks portfolio, where we’re dealing with sustained cocoa inflation,” said Connolly. 

In addition to this, however, the company is keeping a close eye on increased value-seeking behavior within lower-income groups. 

Connolly stated that it’s the company’s job to give consumers the value they are looking for, but for a company whose innovation slate over the last decade has skewed toward more premiumized products, it requires a shift.

“When you have a large cohort of consumers that are value-oriented, you take a different lens around your innovation for both price pack architecture and the kinds of innovation that you want to deliver,” Connolly said.  “Why? Because the benefit of superior relative value is a benefit that’s going to move the sales line.”