CHICAGO – NOVEMBER 09: Sara Lee and Bimbo bread products are displayed together on November 9, 2010 … [+]
Conagra Brands has sold Lender’s Bagels, a refrigerated and frozen bakery business it acquired as part of its $10.9 billion acquisition of Pinnacle Foods in 2018, to Grupo Bimbo for an undisclosed sum.
The divestiture, which was initially announced during Conagra’s Q2 2020 earnings call, includes the Lender’s brand and related intellectual production facility in Mattoon, Illinois, and inventory.
Conagra CFO David Marberger expects the transaction to close during the third quarter of fiscal year 2020, and it will help the company reduce approximately $50 million of net sales and $0.01 of adjusted EPS.
Conagra also divested its direct-store-delivery (DSD) snacks business, including Snyder of Berlin, Erin’s and Tim’s Cascade Snacks, to Utz Quality Foods this past September to better focus on its core business.
A company spokesperson did not comment on Conagra’s long-term growth plans in the bakery market but noted it regularly evaluates its portfolio of brands and makes changes based on strategic priorities.
‘On-trend, innovative’ products in 2020
Notably, Conagra’s recent growth has been driven by meat snacks and sweet treats, which posted 7.8% and 7.3% year-over-year revenue growth in Q2, respectively.
The company is expected to continue to capitalize on these categories’ growth momentum by launching new products and packaging in 2020.
Conagra has launched various “on-trend, innovative” snacking products since October 2019, according to Marberger.
“We’re making great progress on our work to reframe Duncan Hines as a sweet treat to unlock significant growing demand spaces,” he said earlier, with strategies including refreshed packaging, novel flavors and new shelf-stable and frozen snacking platforms.
Conagra will also introduce keto-friendly cakes and co-branded Oreo cake cups later this year, Marberger added.