ConAgra Buys Blake's All Natural Foods

By Angela Chen 

ConAgra Foods Inc. has purchased Blake's All Natural Foods, the latest food-products company to acquire a smaller, natural brand in an effort to shore up sluggish sales.

Financial terms weren't disclosed. Blake's--which makes natural and organic frozen meals--will continue to be based in Concord, N.H.

As consumers embrace foods perceived as healthier, large food companies are trying to tap into this growing segment to combat declining sales of traditional packaged and processed foods. Last September, General Mills Inc. agreed to buy Annie's Inc.--the maker of natural pastas and macaroni-- for about $820 million, betting that a bigger presence in the natural-and-organic foods aisles will energize a business sapped by flagging consumption of breakfast cereals and other traditional fare. Kellogg Co. recently came out with Origins cereal and granola, described as "real food prepared simply," while Campbell Soup Co. launched a line of organic soups.

"Blake's is a great addition to our existing frozen meals business and provides more choices to a growing group of people buying natural and organic foods," said ConAgra Chief Executive Sean Connolly.

According to the Chicago-based market research firm IRI, the market for natural and organic frozen single-serve meals, such as the type that Blake's makes, grew over 33% from 2011 to 2015.

In contrast, overall frozen-food sales, by dollars, have lagged behind the rate of inflation the past four years, and sales by number of units have fallen. Dollar sales of frozen juice, chicken and pizza all are down since 2009, according to market-research company Nielsen. And sales of frozen meals fell 3% to $8.92 billion from 2009 through 2013, according to Euromonitor International.

Omaha-based ConAgra--which owns brands such as Marie Callender's, P.F. Chang's and Healthy Choice--is the nation's largest producer of store-branded foods. It had discontinued several of its Healthy Choice dinners, because of lagging sales and changes in consumer tastes.

ConAgra has struggled with the tough private-label business and had issues integrating the Ralcorp Holdings Inc. business that it bought in 2013 for $4.95 billion. Earlier this month, ConAgra named Mr. Connolly, the former CEO of Hillshire Brands, as its new chief executive and lowered its earnings guidance for the year ending in May.

Shares have been up about 4% this year through Monday's close.

Write to Angela Chen at [e-mail]

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