This sound is generated automatically. Please let us know if you have any feedback.
Summary of diving:
- Facing supply challenges last fiscal year, Conagra President and CEO Sean Connolly has achieved a 98 percent service level to ensure products are on retail shelves.
- David Marberger and David Marberger said the food maker made a strategic choice to build inventory in stores, including prioritizing safety stock in product categories affected by previous production disruptions. during Next question and answer session with investors
- “So our inventory is available, we have more days available, but it’s planned, the timing is set, and we still feel comfortable about our full-year forecast in terms of inventory,” Marburger said.
Diving Insights:
Conagra’s supply problems in the fiscal year ended May 25 included a shortage of frozen vegetables and “product quality inconsistencies” that forced the company to temporarily halt production at its main chicken processing plant for frozen meals. In July, the company revealed plans to increase investment in supply chain flexibility as part of about $450 million in capital spending during the current fiscal year.
As part of its resilience efforts, angled It is being modernized Production of cooked and fried frozen chicken. This company is more besides its cooked chicken production which was the first step in this project. The change in the production of fried chicken is “a more recent development” because demand “It’s exploded in the last few years,” Connolly said.
“We had tremendous success with our banquet MEGA Filets last year, so this is an investment that will continue a little longer,” Connolly said.
Connolly said Conagra outsourced some of its fried chicken fillet production to third parties, which would have cost the company more until it could bring production in-house. “The development of our supply chain flexibility investments, including chicken factories, will enable us to bring some of the outsourced production back to the country at a lower cost,” he added.
Gross tariff costs have remained flat at about 3 percent since the beginning of the year, Marburger said. However, overall inflation for the year comes from core inflation, which is driven by higher prices for beef, pork, turkey and eggs. It is difficult to control the price of meat because it is generally more market and spothe added.
“So the consumer is certainly not out of the woods yet. We still see value-seeking behaviors. We still have to deal with inflation and tariffs,” Connolly said. But after one quarter, I think we feel pretty good about adjusting for the balance of the year.
Editor’s note: This story was first published in our weekly logistics newsletter. Register here
About the Author
