By Brad Dorfman
CHICAGO (Reuters) - As long as commodity prices keep rising, ConAgra Foods Inc (CAG.N: Quote, Profile, Research, Stock Buzz) will need to keep raising its own prices to meet its earnings growth target, the company's chief executive said on Monday.
"If the commodities kept going the way (they) are now and we didn't take more pricing, it would not work," CEO Gary Rodkin said during the Reuters Food Summit in Chicago. "We will have to take more pricing if this trend continues, and we are committed to that."
ConAgra, maker of Healthy Choice meals, Hebrew National hot dogs and a host of other packaged foods, has announced price increases over 95 percent of its portfolio to help offset surging costs for wheat, vegetable oils, energy and other commodities.
ConAgra's profit target is growth of 8 percent to 10 percent in earnings per share before one-time items,
So far, retailers and consumers have accepted higher prices because the rising commodity prices are so high profile, Rodkin said.
"Historically, the last thing any of our sales people would want to do is go and talk about pricing with any customer," Rodkin told the summit. "It's never fun to do that, but the environment is such today that there's much more understanding that there's no choice."
Echoing comments made by many food company executives in recent weeks, Rodkin said that since all food makers are being forced to raise prices, consumers should not see ConAgra's prices as more expensive than any others.
"The tide is rising, so I don't believe we are going to be at a disadvantage," he said. But he added that there could be an impact on the company's sales volume at some point. Continued...
© Thomson Reuters 2008. All rights reserved.
| Japan Investment | Jul 01 - 2, 2008 | Country Summits |
| Global Real Estate | Jun 23 - 25, 2008 | Real Estate |
| Consumer and Retail | Jun 16 - 18, 2008 | Consumer Retail |
| Investment Outlook | Jun 09 - 12, 2008 | Financial Services / Exchanges |
| Global Energy | Jun 01 - 5, 2008 | Energy |
