ConAgra to exit Private Brands labelling business

US-based packaged food company ConAgra Foods is planning to leave its struggling store-brand packaged food business to focus on enhancing its faster growing brand products, such as Chef Boyardee, Hebrew National hot dogs, and Slim Jim meat sticks.

The company has witnessed a continued slump in sales following its $5bn investment to buy the business of private-label foodmaker Ralcorp less than three years ago.

The move comes after Jana Partners, that holds a 7% stake in ConAgra, criticised the company in June regarding its handling of Ralcorp.

ConAgra CEO Sean Connolly said: "As I have intensely studied the situation in our Private Brands operations over the last few months, it has become clear that the time and energy the company is devoting to the Private Brands turnaround represent a suboptimal use of our resources. To prevent further distraction, we are pursuing the divestiture of our Private Brands operations.

"Because the outcome of our strategic review for the Private Brands operations will influence our long-term financial outlook, we will wait until this process is complete before sharing long-term financial commitments. We expect to offer operating details of our plans as well as long-term financial expectations at an investor event later this year."

The company further stated that it was open to acquisitions to enhance its portfolio while also being open to divesting.

Reuters quoted Connolly as saying: "There may be brands that over time can find better homes elsewhere. We will actively consider monetising those assets to fuel other investments when appropriate."