CAG ConAgra Brands Inc

ConAgra Foods Inc. (CAG) acquired Marie Callender’s brand trademarks from Marie Callender Pie Shops Inc., for $57.5 million. Marie Callender Pie Shops Inc. operates the Marie Callender’s Restaurant & Bakery chain in California and the southwestern U.S. The rights were purchased from the restaurant operating company on June 9, 2011.

In 1994, ConAgra Foods acquired a license to sell Marie Callender’s frozen meals and pot pies. Thereafter in 2010, the company obtained the license for selling frozen dessert pies of American Pie, LLC. With this latest brand trademarks ownership, ConAgra Foods will discontinue paying licensing fees to Marie Callender Pie Shops. However, the restaurant chain has been granted the license to continue with the use of Marie Callender’s brand name for its restaurant and bakery operations by CAG.

Sales of Marie Callender's frozen pot pies, desserts and a wide array of single and multi-serve frozen dinners and entrees by CAG have grown to nearly $800 million annually.  At present, the brand has won ConAgra's second-largest retail position after Banquet, selling 284 million frozen meals and desserts each year.

The company has been in the process of acquisition strategy involving a number of brands over time focusing on value-added opportunities and product innovation. The present transaction envisages adding depth and dynamism to CAG’s existing product lines of convenient meals, snacks and meal enhancers.

ConAgra Foods Inc. is one of North America’s leading food makers operating in Consumer Foods and Commercial Foods segments. The Company’s brand acquisition strategy, value addition and portfolio enhancement has over time given a tough contest to its peers like Kraft (KFT), Nestle (NSRGY.PK) and HJ Heinz (HNZ) in a highly competitive food industry.

We currently maintain a neutral recommendation on ConAgra Foods stock.

 
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