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The current environment is anything but normal

The current environment is anything but normal

As Q3 unfolded we began to experience higher-than-anticipated inflation on protein and higher costs in the temperature-controlled transportation network, both of which are harder to offset in the short term,Yesterday’s third quarter earnings call saw Conagra CEO and executive vice president Dave Marberger speak to investors.

He said that this, along with higher dairy and other transportation prices, including increases in fuel and loads per temperature-controlled truck truck, led to an increase in total market inflation of 15.4% in the third trimester compared to a year ago.

Marberger stated that Conagra expects inflation will rise another 16% in fourth quarter. This is a significant increase over the 11% previously projected. It also brings inflation up to 26% on a 2-year stack, which amounts to an additional $100 million in Q4 cost.

I’ve been working in food for a while and have never seen anything like it. There is nothing normal about the world right now. Marberger added.

CEO Sean Connolly stated that the company was quick to adopt additional pricing when it saw this inflation wave coming. As we have done throughout the year,The new policy will be in effect in Q1 2023 and will focus on protein snacks and harder-to-find frozen food.

Unit demand remains strong despite higher prices

Connolly is confident that the next round in price increases will not adversely impact business. This is based on Conagra’s response to price hikes previously made by Conagra. Connolly also believes there is an unexpected benefit to other players also raising prices. It has as much to do Conagra taking steps for its brands to be on shelves and meeting evolving consumer needs.

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