… “Mrs. Butterworth’s was really architected to resemble a loving grandmother, but we can understand how some people may view it differently, may find it offensive”…
Conagra CEO on revamping Mrs. Butterworth’s brand: ‘Perception is reality’
· “Mrs. Butterworth’s was really architected to resemble a loving grandmother, but we can understand how some people may view it differently, may find it offensive,” Conagra Brands CEO Sean Connolly told CNBC’s Jim Cramer.
· “We’re really in the listening mode right now. We want to understand what a diverse range of our consumers and our employees think, and we want to do what’s right,” Connolly said.
· “It’s really part of a bigger initiative, Jim, really coming out of all the horrific things you’ve seen in society over the last couple months,” he said.
Tyler Clifford, CNBC
Jun 30 2020
Conagra Brands CEO Sean Connolly, in an appearance on CNBC Tuesday, explained how the food company plans to implement changes to one of its most recognized brands.
In the midst of a civil uprising that has brought racial injustice and inequity to the forefront in America, Connolly earlier this month announced that the company would undergo a brand review for Mrs. Butterworth’s, a popular syrup brand that first hit shelves in the early 1960s.
Connolly said that “perception is reality.”
“Mrs. Butterworth’s was really architected to resemble a loving grandmother, but we can understand how some people may view it differently, may find it offensive,” he said of the brand’s packaging in a “Mad Money” interview with Jim Cramer. “We’re really in the listening mode right now. We want to understand what a diverse range of our consumers and our employees think, and we want to do what’s right.”
Conagra, through Mrs. Butterworth’s, joins a growing list of companies that committed to revamping their packaging images after questions about racist imagery. Aunt Jemima, Uncle Ben’s and Cream of Wheat, whose brands depict Black cooks in a reference to America’s past, in recent weeks also announced plans to initiate a brand review...
more, including video report [2:35 min.]
Conagra Brands, Inc. (CAG) Q4 2020 Earnings Call Transcript
CAG earnings call for the period ending May 31, 2020.
Motley Fool Transcribers
Jun 30, 2020
Questions and Answers
Good day and welcome to the Conagra Brands Fourth Quarter Fiscal Year 2020 Earnings Conference Call. [Operator Instructions]
I would now like to turn the conference over to you, Brian Kearney. Please go ahead.
Brian Kearney -- Head of Investor Relations
Good morning, everyone. Thanks for joining us.
I'll remind you that we will be making some forward-looking statements today. While we are making those statements in good faith, we do not have any guarantee about the results we will achieve. Descriptions of the risk factors are included in the documents we filed with the SEC.
Also, we will be discussing some non-GAAP financial measures. References to adjusted items, including organic net sales, refer to measures that exclude items that management believes impact comparability for the period referenced. Please see the earnings release for additional information on our comparability items. The GAAP to non-GAAP reconciliations can be found either in the earnings press release or the earnings slides, both of which can be found in the Investor Relations section of our website, Conagrabrands.com.
Finally, we will be making some references to total Conagra Brands as well as Legacy Conagra Brands. References to Legacy Conagra Brands refer to measures that exclude any income or expenses associated with the acquired Pinnacle Foods business.
With that, I'll turn it over to Sean.
Sean Connolly -- President and Chief Executive Officer
Good morning, everyone, and thank you for joining our fourth quarter fiscal 2020 earnings call. On behalf of Conagra Brands, I want to start by expressing my heartfelt hope that you and your families are continuing to stay safe and healthy.
On today's call, we're going to address our fourth quarter and fiscal 2020 results, our expectations for fiscal 2021 and our perspective on why Conagra is uniquely positioned to succeed in this new environment. But first, I want to provide some context around what has brought us to this point.
Over the past five years, we have been purposefully architecting one of the largest transformations in the food industry. When we embarked on this process, we made major strategic decisions on where to compete and how to win. After decades as a food conglomerate, we transformed into a pure play branded food company with a portfolio focused on competing in three domains: frozen, snacks and staples.
We committed to perpetually reshaping our portfolio for better growth and better margins, and established a disciplined approach rooted in a playbook that we call the Conagra Way. This relentlessly principle-based playbook is filled with repeatable and scalable processes that focus on modernizing our iconic brands through superior food, contemporary packaging and strong, consistent marketing investment. The Conagra Way is not just a way to build brands, but an operating model that has helped cultivate our agile, motivated and highly energized culture.
As I'll describe in more detail in a moment, fiscal 2020 saw unprecedented performance as we built upon the extraordinary progress we have made over the past five years. We further strengthened our business, including getting legacy Pinnacle back on track, and delivered strong financial results. During the fourth quarter in particular our transformation was put to the test, and you are seeing the fruits of our labor.
Our modernized portfolio and agile culture enabled us to respond to the increased consumer demand driven by COVID-19. At this point, the degree to which demand will return to historical norms is still uncertain and the timing of the changes in consumer demand is also uncertain. However, we believe that demand will likely remain elevated in the near term given both consumer perceptions about returning to work and eating outside the home as well as the fact that consumers are discovering and rediscovering the pleasures, conveniences and tremendous value proposition of dining at home.
Dave will cover the financials in more detail, but I want to let you know that we continue to be on track to deliver our fiscal 2022 algorithm, and we remain committed to achieving our leverage target of 3.5 times to 3.6 times by the end of fiscal 2021.
As we'll detail today, we believe our portfolio is optimally positioned to succeed in the new normal. We are focused on making the right investments to ensure that we can continue to safely and reliably meet consumers' needs in fiscal '21 and the longer term. In today's presentation, we will cover our business update, the behavioral shifts we have seen and how Conagra is well positioned to benefit from these shifts and what we expect going forward in terms of our near-term outlook and the opportunity to create long-term value.
Beginning with our business update. Before I get into the numbers, I would like to recognize that our extraordinary results have only been possible because of the thousands of hardworking Conagra team members on the front lines across North America. Here at Conagra, we talk about infusing a refuse to lose attitude, and never before have we seen our team make such extraordinary efforts. The team's commitment has enabled us to meet the elevated demand from our customers and the communities we serve and deliver the strong results that we are announcing today. I couldn't be more proud of all that they've accomplished. To all of our team members, thank you. Great job all around.
During the fourth quarter, we experienced significant growth across our core operating metrics, including 21.5% growth in organic net sales and a 108.3% growth in adjusted EPS. These results helped to contribute to our rapid progress in reducing our leverage, and I'm proud to say that we ended the quarter with a net leverage ratio of 4.0 times, down from 4.8 times in the third quarter. As you can see on slide 9, our growth was not confined to one area, but was driven by strong retail sales across our portfolio, spanning staples, frozen and snacks. Our strong growth in e-commerce continued to accelerate both on an absolute basis and as a percentage of our overall sales. The work we've done over the past several years to improve our e-commerce capabilities has certainly paid off. As consumers increasingly adopt online grocery shopping, our share of e-commerce sales has steadily increased.
Slide 11 highlights that our disciplined approach to innovation is clearly working. Our absolute sales on new innovation introduced this year increased 43% compared to our innovation slate of fiscal 2019. As a reminder, we stated at our initial Investor Day that our goal was to have 15% of total sales coming from products launched within the past three years. Well, today I'm proud to say that we've consistently performed above that level. In a few minutes, we'll provide you some of the new innovation that we have in store for fiscal 2021 as we seek to build upon this success.
As we've discussed previously, frozen is an increasingly important domain for consumers, especially in today's environment. For the fourth quarter, total Conagra frozen retail sales grew 26.2% over last year, with strong growth across each frozen category, including single serve meals, vegetables, multi-serve meals and plant based meat alternatives. And as slide 13 shows, as we grew we also gained share in the important frozen meals category during the quarter, continuing a trend we've seen for some time now. The Conagra Way playbook continues to pay off.
And while the trends have remained strong, there's even more opportunity, particularly in frozen vegetables. Birds Eye faced some unique dynamics in the quarter. As I said earlier, the category remained extremely relevant for consumers. We continue to see robust demand for frozen vegetables, and our retail sales up 26.5% during the quarter. Importantly, Birds Eye holds the top position in category share and has 2 times the share of the next branded player. Given the incredible surge in demand we experienced during the fourth quarter and our number one brand position, we hit a ceiling on capacity.
Furthermore, we made the decision to temporarily close a plant during the quarter due to COVID-19 which further constrained capacity. The good news is, the plant is safely back up and running flat out. In addition, we have made the strategic decision to bring on more external partners to fulfill demand and rebuild inventory. These investments in our supply chain will allow us to efficiently meet the elevated demand we are seeing today and expect to see going forward. This is an important example of that investment, and I will expand on this in a few minutes...