Omaha, Nebraska, USA-headquartered ConAgra Foods, Inc. confirmed on August 11 that Gary M. Rodkin, its chief executive officer since 2005, intends to retire at the end of the company’s fiscal year, May 2015. The announcement came after a Reuters report on Friday suggested that he would leave the company within the next several months, thus “paving the way for a successor who investors hope can turn around the ailing packaged foods company.”
The board of directors has established a search committee, led by independent director Richard Lenny, to identify Rodkin’s replacement. Lenny, the former chairman and chief executive officer of The Hershey Co., has served on the ConAgra Foods board since 2009.
ConAgra, which is capitalized at $13 billion, is a major producer of branded retail frozen food products, as well as refrigerated, canned and shelf stable items. The company’s Lamb Weston unit produces frozen french fries for the foodservice sector, and the $4.95 billion purchase of Ralcorp in January of 2013 made it the biggest private label food supplier in the United States.
Rodkin has been under pressure from shareholders to boost profits, which have missed Wall Street expectations following the acquisition of Ralcorp. The private label segment posted a loss of $573 million during the fourth quarter of fiscal year 2014, which ended on May 25, due largely to price cutting and higher than anticipated operating costs. Quarterly dollar volume of approximately $1 billion, however, was in line with previous year sales.
Weak volumes in the Consumer Foods sector (which includes the company’s numerous frozen food retail brands as well as Chef Boyardee canned goods, Orville Redenbacher’s popcorn and other household name products) resulted in sales and profitability declines of 7% to $1.8 billion and $177 million, respectively.
On the plus side, overall sales in the commercial foods segment (which includes baked goods, ingredients and packaged food items as well as Lamb Weston french fries and other value-added potato products marketed primarily to foodservice operators) rose 1% to $1.63 billion during the fourth quarter.
The bottom line is that revenue slipped 3% to $4.43 billion.
ConAgra Chairman Steven Goldstone, insisting that the company is confident in its ability to deliver on fiscal year EPS commitments, stated: “The board is extremely appreciative of Gary’s leadership, vision and accomplishments over his almost nine years as ceo. Under his stewardship, ConAgra Foods has transformed from a holding company into one unified company, with a well-balanced portfolio of consumer, commercial and private brand businesses, and strong operating capabilities. To achieve this transformation, Gary made necessary and bold moves with the company’s portfolio and drove significant cultural change throughout the business. We thank him for his hard work and commitment to ConAgra Foods and its 34,000 employees.”
Rodkin remarked, “It is a great privilege to lead ConAgra Foods, and while I look forward to retirement, I will miss working alongside so many smart and talented people who I’ve watched grow tremendously in my nine years here. I’m pleased we are beginning my last fiscal year at ConAgra Foods by making good progress, and I have deep conviction that we are on the right path to deliver sustainable, profitable growth due to our significantly improved operational capabilities and our differentiated portfolio that is right for today’s value-oriented consumers. I will continue to lead our team with focus and enthusiasm until my successor is on board, and I look forward to helping with the transition process.”
