Conagra Invests 15M Dollars to Meet Increased Product Demand
The specialty provider unveils a new operational blueprint with a 15M-dollar investment to boot
by Peggy Packer, Deli Market News
April 26th, 2021
CHICAGO, IL / Marked by ebbs and flows in the retail market, 2020 and 2021 have been a time of adjustment for companies across the supply chain. Conagra was one of those who made key shifts during this span, as the company announced in its recent Quarter Three 2021 earnings call. This includes a $15 million investment in transportation to keep products stocked as demand skyrocketed.
“Demand was higher than we expected during the quarter. To adequately service this demand, we made the decision to invest approximately $15 million in the quarter. This meant aggressively seeking out every available truck and adjusting how we ship to customers,” said David Marberger, Chief Financial Officer, during the call as reported by Seeking Alpha. “To best service demand for certain brands, we had to bypass our normal distribution network and ship directly to customers. While we incurred additional costs to implement these actions, which impacted our operating margin, this enabled us to minimize out of stocks, maximize on-shelf availability, and maximize profit dollars.”
Although this $15 million investment did lower the company’s profit margin, reported sales increased by 8.5 percent while organic sales rose by 9.7 percent compared to the year prior...