All In The Family Conagra’s Businesses Support Each Other

Let’s get one thing straight: ConAgra is not a company.

That may come as a bit of a surprise to ConAgra’s 125,000 shareholders.

Based in Omaha, Neb., ConAgra’s elaborate corporate “campus” - right up to the palatial colonial staircase - also defies such logic.

But just ask Phil Fletcher, ConAgra’s shoot-from-the-hip chief executive officer.

“ConAgra is not a company,” Fletcher says. “That’s a misconception many people have. We are a FAMILY of companies, and each of those family members runs their own business.”

More precisely, Fletcher views ConAgra as the umbrella for its three divisions (prepared foods, trading and processing and agri-products) and the myriad businesses that compose those divisions.

ConAgra’s 87,000 employees refer to them as independent operating companies. Fletcher, as well as several analysts, said they were the key to ConAgra’s success.

“Operating businesses run ConAgra,” Fletcher said. “The corporate office helps those businesses. It doesn’t tell them what to do.”

Juli Niemann, a securities analyst with Huntleigh Securities, said that philosophy wasn’t a charade.

“When they take over a company, if it’s successful, they leave the same management in place,” she said.

ConAgra dates back to Sep 29, 1919, when four Nebraska flour mills joined forces, calling themselves Nebraska Consolidated Flour Mills.

For the next 30 or so years, flour milling and feed sales were NCM’s primary focus. In 1951, NCM made its first foray into branded foods with the introduction of Duncan Hines cake mixes.

But five years later, the company sold Duncan Hines to Procter & Gamble. By its 50th anniversary in 1969, flour milling and feed still constituted 64 percent of NCM’s total sales.

NCM recognized the need to diversify. In 1971, NCM changed its name to ConAgra, and two years later, its stock began trading on the New York Stock Exchange.

Serious growing pains ensued. ConAgra almost went bankrupt in 1974, losing $12 million.

Enter Mike Harper.

Harper is widely credited for crafting ConAgra’s turnaround from just $4.1 million in earnings and $574 million in sales in 1975 to $606 million in earnings and $21.5 billion in sales in 1993, when he left to become chairman and CEO of RJR Nabisco.

“Mike Harper is really the one who turned it around,” Niemann said. “RJR is lucky to have him.”

Fletcher concurred.

“Mike is the finest executive in business I’ve ever met,” said Fletcher.

As Harper and Fletcher move ConAgra toward the next century, the emphasis is on prepared foods.

ConAgra began expanding into prepared foods by purchasing frozen food companies in the late 1970s. Now it claims such brands as HuntWesson, Peter Pan and Orville Redenbacher. Its meat line includes Butterball, Armour, Swift Premium, Eckrich and Country Pride chicken.

Prepared foods constituted 77.1 percent of ConAgra’s total sales in fiscal 1994 and 80.9 percent of its operating profits. Twenty-one ConAgra brands post annual sales of more than $100 million each.

“What we try to do is participate in every purchasing decision the consumer makes,” Fletcher said.

Last year, ConAgra struck a deal with the Kellogg Co. of Battle Creek, Mich., to create Healthy Choice cereals.

“Healthy Choice has been very, very strong,” he said. “I think we hit it at the right time.”