Conagra Brands (June 2017)
Conagra was founded in 1919 as Nebraska Consolidated Mills (NCM). It was in 1942 that the company moved into the livestock feed business. NCM changed its name to ConAgra Foods in 1971. In 1980, it began purchasing prepared food brands, starting with Banquet Foods. Conagra Foods focused on frozen foods and packaged meat brands. In 2015, it announced the relocation of its headquarters to Chicago, a move completed the next year. At the same time, they renamed themselves Conagra Brands, after spinning off Lamb Watson, a producer of potato products for foodservice companies.
As of 2017, Conagra produces a wide array of food products including cooking oil, frozen dinners, hot cocoa, hot dogs, peanut butter and many others. Conagra’s brands range from Act II popcorn to Wolf Brand Chili. Some of their major brands include Del Monte, Egg Beaters, Hunt’s, Healthy Choice, Hebrew National La Choy, Libby’s, Marie Callender’s, Orville Redenbacher’s, Slim Jim (snack food), Reddi-wip, Egg Beaters, Hebrew National, P.F. Chang’s, Chef Boyardee, Home Menu, and Bertolli. Conagra’s brand ownership is so extensive that the list has its own Wikipedia page. As of early June 2017, there is speculation that Conagra will acquire Pinnacle Foods.
In the early 1990s, Conagra acquired the meat company Swift & Co., which included beef and pork processing, and the Butterball turkey brand. In 2002, Conagra sold a majority of this fresh beef and pork business. The business group that purchased 54% – Hicks, Muse, Tate & Furst, a private-equity firm, and Booth Creek Management – revived the name Swift & Co. Conagra sold the remainder of its interest to Muse two years later. In October 2006, Conagra sold Butterball to Carolina Turkeys.
For fiscal year 2016, Conagra had revenue of $11.6 billion, down from $9.26 for fiscal year 2015. Net income for 2016 was $480 million, down from $746.8 million in 2015; net income after extraordinaries was ($681.8) million in 2016, down from ($254.3) million in 2015 (1, 2).
As of June 9, 2017, Conagra (CAG) was trading at just under 39, giving it a market capitalization of about $16.6 billion and a price/earnings ratio of 28. Its Its 52 week range has been 33.1-41.7. CAG’s one year return is -6.1% (3).
In the late 1990s, Conagra’s Peavy Grain unit sprayed water on grain, to increase its weight and sale price. In 1997, Conagra pleaded guilty to this charge, as well as to bribing Federal inspectors.
The settlement was made up of a $4.4 million criminal fine, $3.45 million as compensation for illegal profits, and $450,000 to reimburse the Feds for storage and investigation expenses. Four former Conagra managers also pleaded guilty to criminal charges.
Previously, Conagra had paid $2 million to a group of Indiana farmers to settle a civil case. Multinational Monitor named Conagra one of the Top 100 Corporate Criminals of the 1990s.
Labor and Related
In 2003, Conagra and subsidiary Gilroy Foods paid $1.5 million as part of a settlement with the Equal Employment Opportunity Commission (EEOC). The EEOC had brought charges after a 1999 strike at a King City, CA plant. The EEOC found that the plant discriminated against Latinos and women.
In 2004, Elijah Brown, a 21-year-old worker at Conagra’s Kansas City meatpacking plant, went on a shooting rampage, where he killed five people and himself. Two other people were wounded. Conagra later sold the plant as part of its then-ongoing divestiture from meat production.
In June 2009, the Slim Jim manufacturing plant in Garner, North Carolina exploded. Four workers were killed and 67 others were injured.
Health / Contamination
- The Department of Agriculture temporarily shut down two Conagra plants for health violations;
- A Conagra poultry slaughterhouse had the highest rate of Salmonella of all facilities tested – contamination was found on almost half of the birds;
- After many previous citations for its Colorado beef plant, Conagra Beef Company issued a recall for 19 million pounds of beef (the second largest meat recall to date); 19 people were sickened by this contaminated meat
- Also, Conagra had to recall Chef Boyardee ravioli and hundreds of thousands of pounds of soup.
During 2006-07, Conagra’s Peter Pan and Great Value peanut butters were linked to a Salmonella outbreak. The Centers for Disease Control (CDC) ultimately documented more than 628 individual cases of salmonella poisoning in 47 states from the contaminated peanut butter. It was determined that Conagra continued to ship the peanut butter even after it was known the product was contaminated. The company eventually plead guilty to a single misdemeanor, and paid a record $11.2 million settlement.
On October 11, 2007, Conagra asked stores to pull their chicken and turkey pot pies (Banquet brand and generic), after 152 reported cases of Salmonella poisoning in 31 states. The Marshall, Missouri plant where the pot pies were manufactured closed that same day. The next day, a full recall was issued for frozen pot pies sold under the brands Banquet, Albertson’s, Food Lion, Great Value, Hill Country Fare, Kirkwood, Kroger, Meijer, and Western Family. The CDC ultimately identified 401 cases of Salmonella poisoning in 41 states.
Arkansas Butterball House of Horrors, 2006
In the months before Conagra sold Butterball, undercover investigators from PETA documented extensive cruelty at a Butterball facility in Ozark, Arkansas. The video shows workers punching and stomping on turkeys, and slamming them against walls. “One Butterball employee stomped on a bird’s head until her skull exploded, another swung a turkey against a metal handrail so hard that her backbone popped out, and another was seen inserting his finger into a turkey’s vagina. One worker told an investigator, ‘If you jump on their stomachs right, they’ll pop … or their insides will come out of their [rectums],’ and other Butterball workers frequently bragged about kicking and tormenting birds.”
Sample coverage: “Please don’t buy Butterball (warning: this is disturbing),” Brooklynian.
North Carolina Turkey Hatchery Undercover Investigation, 2006
Also in 2006, before Butterball’s sale, a Compassion Over Killing investigator went undercover at a North Carolina turkey hatchery that supplies Butterball. The video showed chicks being de-toed and often de-snooded. Chicks are mangled in the machinery, suffocated, or dumped, while still alive, along with their discarded egg shells.
Sample coverage: “Abusive Conditions Uncovered Inside a North Carolina Turkey Hatchery that Supplies Butterball with Thanksgiving Turkeys: Undercover Video Shot By Hatchery Employee Includes Scenes of Chicks Gasping for Air as They Slowly Suffocate in Plastic Bags,” PR Newswire.
 This is the first time I’ve seen a difference between the net income and the net income available to common; different sites quote the different numbers; Marketwatch breaks them both down.
 Note: By 2004, Conagra had sold its fresh beef and pork units, and sold Butterball toward the end of 2006.
 There have been many undercover investigations of Butterball, but other than these two, all were after Conagra sold it.