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ConAgra buying out Unilever frozen units to broaden its meals range in USA market.

Omaha, Nebraska-headquartered ConAgra Foods is buying Unilever's frozen meals business in North America, which markets the Bertolli and P.F. Chang's brands, for $265 million, according to Dow Jones. The business rings up nearly $300 million in annual sales.

With the deal, ConAgra is expanding in a category that has had rough going in the United States recently. Consumers have shown they are particularly sensitive to higher prices on frozen meals, causing them to buy fewer of them. According to Nielsen, frozen food sales were up two percent for the 52-week period that ended April 14, but the number of items was down two percent during that same time.

The soft market caused H.J. Heinz to discontinue its T.G.I. Friday's range of frozen single-serve entrees and multi-serve meals recently, as the business was said to be losing money. ConAgra's Banquet line of frozen meals also saw a decline in sales volume after prices were raised above the $1 level, a barrier that's hard to cross for many bargain shoppers.

Andre Hawaux, president of ConAgra's consumer foods business, said that Bertolli and P.F. Chang's add two higher-priced brands to ConAgra's frozen food portfolio, which includes names like Marie Callender's, Healthy Choice and Kid Cuisine. While declining to provide details on the performance of Unilever's frozen foods business, Hawaux said some of Bertolli's new products, such as baked stuffed shells, didn't perform well and were discontinued, but its core business is otherwise stable.

The sale is reportedly part of Unilever's plan to get out of frozen foods, a business it has already exited in Europe. The deal includes a license for the Bertolli brand name and the transfer of Unilever's existing license with the P.F. Chang's restaurant chain for use of its name. Unilever will continue to own the Bertolli trademark and will operate its existing pasta sauce business. The deal doesn't include Unilever's production plant in Owensboro, Kentucky, where Bertolli and RE Chang's frozen meals are currently made, although manufacturing equipment will be relocated to an existing ConAgra facility.

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Title Annotation:Frozen Foods in North America
Publication:Quick Frozen Foods International
Date:Oct 1, 2012
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