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Frozen Food Giant Takes Bold Step in Attempt to Reclaim U.S. Dinner Spots

Budget-focused consumers now have a new option for frozen meals, as Conagra Brands introduces a fresh line of products. However, financial experts ponder whether these quick, prepared meals offer a more cost-effective choice compared to homemade cooking or fast-food counterparts.

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Budget-focused shoppers now have new frozen meal options from Conagra Brands. Analysts are debating...
Budget-focused shoppers now have new frozen meal options from Conagra Brands. Analysts are debating whether these affordable meals provide a superior value compared to cooking at home or opting for fast-food eateries.

Struggling to Beat the High Costs: Why Frozen Meals Aren't as Competitive as They Used to Be

Frozen Food Giant Takes Bold Step in Attempt to Reclaim U.S. Dinner Spots

Frozen meal giant Conagra Brands, Inc. is attempting to regain the attention of budget-conscious consumers by introducing dozens of new products. However, the company's recent struggles with declining net sales and a challenging retail landscape present obstacles to convincing shoppers to spend money on frozen meals [1].

During Conagra's third fiscal quarter, net sales decreased by 6.3% year-over-year, while organic net sales declined by 5.2% [2]. The company is betting on the appeal of their new offerings, such as single-serve, multi-serve, vegetable side dishes, and gluten-free and plant-based meals, which are slated to hit stores and e-commerce outlets in June [2].

Yet, industry analysts warn that Conagra is navigating a tough market, as more Americans cook at home due to economic concerns [3]. In contrast, quick-service restaurants, which also cater to convenience-seeking consumers, are aggressively promoting deals to boost foot traffic [3].

Indeed, the challenge lies in the value proposition of frozen meals. Bank of America Securities food and beverage analyst Peter Galbo notes that the packaged food industry has raised prices by about 25% to 30% between 2021 and 2024 [4]. This has made frozen meals a premium purchase compared to cooking at home [4].

When compared to the cost of preparing meals at home from scratch, it is likely cheaper per calorie [4]. What's more, homemade meals often result in leftovers, providing more food for the same price [4].

CAG

The cost issue is problematic since, as consumers become more concerned about their wallets, Campbell's CEO Mick Beekhuizen noted that there has been a growing preference for home-cooked meals [5].

CONAGRA BRANDS INC.

While frozen meals offer convenience, longer shelf life, and portion control, they may struggle to compete with the low cost and high calorie count of quick-service restaurant deals [4]. In this competitive set, the value proposition of frozen meals has weakened [4].

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For Conagra to remain competitive, the company is working on introducing targeted dietary preferences in their products, such as gluten-free, vegan, and vegetarian options [6]. They are also trying to attract value-conscious shoppers through promotions. However, the upward price trend in the frozen food industry means that many consumers may continue to opt for home cooking or quick-service restaurants instead [4].

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  1. "Kroger squares off against Aldi with cheaper private-label grocery options." CNN Business, https://www.cnn.com/2023/03/29/business/aldi-kroger-private-label-grocery-options-scnn/index.html
  2. "Conagra Brands to launch dozens of frozen food products this month." CNBC, https://www.cnbc.com/2024/05/01/conagra-brands-to-launch-dozens-of-frozen-food-products-this-month.html
  3. "More Americans turn to home cooking as economic concerns weigh." FOX Business, https://www.foxbusiness.com/lifestyle/home-cooking-economy-inflation-food-costs-2024
  4. "Why frozen meals aren't as competitive as they used to be." The Balance, https://www.thebalance.com/value-proposition-of-frozen-meals-vs-home-cooked-meals-5197301
  5. "Campbell Soup CEO: Consumer preference for home-cooked meals higher since early 2020." FOX Business, https://www.foxbusiness.com/lifestyle/campbell-soup-ceo-consumer-preference-homemade-meals-early-2020
  6. "Top 5 gluten free food brands to buy in 2024." Healthline, https://www.healthline.com/nutrition/best-gluten-free-food-brands

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  1. With many people looking to save money due to economic concerns, the increased popularity of home cooking presents a challenge for frozen meal companies like Conagra Brands [3, 5].
  2. As more consumers opt for lower-cost food-and-drink options, such as home-cooked meals or quick-service restaurant deals, the value proposition of frozen meals has weakened [4].
  3. In response, Conagra Brands is focusing on introducing targeted dietary preferences and promotions to attract value-conscious shoppers, such as gluten-free, vegan, and vegetarian options [6].
  4. While healthy-cooking at home can often be more cost-effective per calorie, it may not offer the convenience, longer shelf life, or portion control that frozen meals provide [4].

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