ConAgra CEO more willing to make acquisition

BOCA RATON, Florida (Reuters) - ConAgra Foods Inc (CAG.N) is looking to make more acquisitions now that Chief Executive Gary Rodkin has gotten his company to the point where it is regularly cutting costs, developing new products and able to price its goods correctly.

"We might be a bit more willing to look at some deals," Rodkin told Reuters on the sidelines of the Consumer Analyst Group of New York meeting on Tuesday.

Rodkin stressed that the company was not looking to make any "transformational" deals like Kraft Foods Inc's (KFT.N) recent purchase of Cadbury Plc. But he did expect that, down the road, there would be more consolidation in the food industry.

"That's just the way of the world, the big get bigger," Rodkin said, noting that consolidation by retailers and manufacturers looking for new ways to cut costs were factors that would drive food industry mergers.

Rodkin would not say if ConAgra would be immune from that sort of major consolidation but said the company is focused on improving operations to the point that it would be in a stronger position so that if ConAgra were part of a big deal, it could be an "equal partner."

In the past, ConAgra would have more likely been seen as an acquisition target than a partner. The company's businesses included a volatile commodity trading operation, consumer products sales were sluggish and it was saddled with a group of second-tier brands with little innovation.

But four years after joining ConAgra as its CEO, Rodkin has slashed costs and sold off businesses to become more focused on consumer packaged goods.

ConAgra is also developing more products, with an emphasis on technology on which the company can get patents, thereby slowing down the introduction of copycat private-label products.

One example is Healthy Choice Cafe Steamers, a frozen entree with a special container that steams the food in the microwave.

"We're trying to do some things that cannot be replicated," Rodkin said. The company is now getting ready to introduce multi-serving microwaveable entrees like lasagna, which cook in about one-third of the time as in a conventional oven, but still heat evenly and otherwise have the same quality as an oven-cooked product, Rodkin said.

ConAgra has also become better at pricing its products, after lagging competitors in raising prices even as commodity costs hurt margins in 2008.

"We learned the hard way, we learned from experience," Rodkin said.

The company brought in new employees to help with pricing and also has seen pricing improve as its businesses have started working together more closely, he said.

Analysts say ConAgra is showing signs of success with the overhaul of the company, but noted that commodity costs eased in the food industry in 2009.

"The real test, however, will come over the next year as the cost trajectory changes direction," J.P. Morgan analyst Terry Bivens said in a research note.

ConAgra shares closed up 2.2 percent at $23.92 on the New York Stock Exchange.

(Reporting by Brad Dorfman; Editing by Tim Dobbyn and Matthew Lewis)