The company's own description of what it does — segments, products, customers, and how it makes money — from its annual 10-K filing (Item 1).
The text below is reproduced verbatim from CAG’s SEC filing. See also CAG’s supply chain and financial statements.
ITEM 1. BUSINESS
ITEM 1. BUSINESS General Development of Business Conagra Brands, Inc. (the "Company", "Conagra Brands", "we", "us", or "our"), headquartered in Chicago, is one of North America's leading branded food companies. Guided by an entrepreneurial spirit, the Company combines a rich heritage of making great food with a sharpened focus on innovation. The Company's portfolio is evolving to satisfy people's changing food preferences. Its iconic brands such as Birds Eye ® , Duncan Hines ® , Healthy Choice ® , Marie Callender's ® , Reddi-wip ® , and Slim Jim ® , as well as emerging brands, including Angie's ® BOOMCHICKAPOP ® , Duke's ® , Earth Balance ® , Gardein ® , and Frontera ® , offer choices for every occasion. We began as a Midwestern flour-milling company and entered other commodity-based businesses throughout our history. We were initially incorporated as a Nebraska corporation in 1919 and reincorporated as a Delaware corporation in 1976. Over time, we transformed into the branded, pure-play consumer packaged goods food company we are today. Growing our food businesses has also been fueled by innovation, organic growth of our brands, and expansion into adjacent categories, including through acquisitions. We are focused on delivering sustainable, profitable growth with strong and improving returns on our invested capital. On October 26, 2018, we completed our acquisition of Pinnacle Foods Inc. ("Pinnacle"). As a result of the acquisition, Pinnacle became a wholly-owned subsidiary of the Company. Narrative Description of Business We compete throughout the food industry and focus on adding value for our customers who operate in the retail food and foodservice channels. Our operations, including our reporting segments, are described below. Our locations, including manufacturing facilities, within each reporting segment, are described in Item 2, Properties . Reporting Segments Our reporting segments are as follows: Grocery & Snacks The Grocery & Snacks reporting segment principally includes branded, shelf-stable food products sold in various retail channels in the United States. Refrigerated & Frozen The Refrigerated & Frozen reporting segment principally includes branded, temperature-controlled food products sold in various retail channels in the United States. International The International reporting segment principally includes branded food products, in various temperature states, sold in various retail and foodservice channels outside of the United States. 3 Foodservice The Foodservice reporting segment includes branded and customized food products, including meals, entrees, sauces, and a variety of custom-manufactured culinary products packaged for sale to restaurants and other foodservice establishments primarily in the United States. Unconsolidated Equity Investments We have two unconsolidated equity investments. Our most significant equity method investment is Ardent Mills, a milling business. Acquisitions On October 26, 2018, we completed the acquisition of Pinnacle, a branded packaged foods company specializing in shelf-stable and frozen foods. As a result of the acquisition, Pinnacle became a wholly-owned subsidiary of the Company. See Note 2, "Acquisitions" , to the Consolidated Financial Statements contained in this report for further information. Divestitures During the fourth quarter of fiscal 2021, we completed the sale of our Egg Beaters ® business for net proceeds of $50.6 million, subject to final working capital adjustments. The results of operations of the divested Egg Beaters ® business were primarily included in our Refrigerated and Frozen segment, and to a lesser extent within our International and Foodservice segments, for the periods preceding the completion of the transaction. The assets and liabilities of this business have been reclassified as assets and liabilities held for sale within our Consolidated Balance Sheets for all periods presented prior to the divestiture. During the third quarter of fiscal 2021, we completed the sale of our Peter Pan ® peanut butter business for net proceeds of $101.5 million, including working capital adjustments but subject to final adjustments for certain tax benefits. The business results were previously reported primarily within our Grocery & Snacks segment, and to a lesser extent within our International and Foodservice segments, for the periods preceding the completion of the transaction. The assets and liabilities of this business have been reclassified as assets and liabilities held for sale within our Consolidated Balance Sheets for all periods presented prior to the divestiture. General The following comments pertain to all of our reporting segments. Conagra Brands is a branded consumer packaged goods food company that operates in many sectors of the food industry, with a significant focus on the sale of branded, private branded, and value-added consumer food, as well as foodservice items and ingredients. We use many different raw materials, most of which are commodities. The prices paid for raw materials used in making our food generally reflect factors such as weather, commodity market fluctuations, currency fluctuations, tariffs, and the effects of governmental agricultural programs. Although the prices of raw materials can be expected to fluctuate as a result of these factors, we believe such raw materials to be in adequate supply and generally available from numerous sources. From time to time, we have faced increased costs for many of our significant raw materials, packaging, and energy inputs. We seek to mitigate higher input costs through productivity and pricing initiatives and the use of derivative instruments to economically hedge a portion of forecasted future consumption. We experience intense competition for sales of our food items in our major markets. Our food items compete with widely advertised, well-known, branded food, as well as private branded and customized food items. Some of our competitors are larger and have greater resources than we have. We compete primarily on the basis of quality, value, customer service, brand recognition, and brand loyalty. Demand for certain of our food items may be influenced by holidays, changes in seasons, or other annual events. For example, sales of frozen foods tend to be marginally higher during the winter months, seafood sales are highest during Lent, in advance of the Easter holiday, and production of certain of our products occurs seasonally, during or immediately following the purchase of agricultural crops. 4 We manufacture primarily for stock ; we fill our customer orders from finished goods inventories. While at any given time there may be some backlog of orders, such backlog is not material in respect to annual net sales, and the changes of backlog orders from time to time are not significant. Our intellectual property rights, including our trademarks, licensing agreements, trade secrets, patents, and copyrights are of material importance to our business and we attempt to protect such rights by pursuing remedies available to us under trademark, copyright, trade secret, and patent laws, as well as entering into licensing, third-party nondisclosure and assignment agreements, and policing of third-party misuses of our intellectual property. Some of our food items are sold under brands that have been licensed from others, including under the P.F. Chang’s ® , Bertolli ® , and Libby’s ® trademarks. We also own certain intellectual property rights that are licensed to third parties, such as the Alexia ® trademark. While many of these licensing arrangements are perpetual in nature, others must be periodically renegotiated or renewed pursuant to their terms. We also actively develop and maintain a portfolio of patents, although no single patent is considered material to the business as a whole. We have proprietary trade secrets, technology, know-how, processes, and other intellectual property rights that are not registered. Our operations are subject to various laws and regulations administered by federal, state, local, and foreign government agencies, including, but not limited to, the United States Department of Agriculture, the Federal Food and Drug Administration, the Occupational Safety and Health Administration, the Environmental Protection Agency, and the Department of Labor. In particular, the processing, packaging, transportation, storage, distribution, advertising, labeling, quality, and safety of food products, the health and safety of our employees, and the protection of the environment are each subject to governmental regulation. Additionally, we are subject to data privacy and security regulations, tax and securities regulations, accounting and reporting standards, and other financial laws and regulations. We believe that we are in compliance with such laws and regulations in all material respects and do not expect that continued compliance with such regulations will have a material effect upon capital expenditures, earnings, or our competitive position. Our largest customer, Walmart, Inc. and its affiliates, accounted for approximately 26% of consolidated net sales for each of fiscal 2021 and 2020 and 24% of consolidated net sales for fiscal 2019. Human Capital Resources At Conagra, we believe that our employees are the driving force behind our success. We believe that the success and growth of our business depend in large part on our ability to attract, develop, and retain a diverse population of talented and high-performing employees at all levels of our organization. We leverage our six timeless values, which form the framework of our Company culture, to guide our approach to human capital management: • Integrity: Doing the right things and doing things right • External Focus: Centering on the consumer, customer, competitor, and investor • Broad-Mindedness: Seeking out and respecting varied perspectives, embracing collaboration, and assuming positive intent • Agility: Converting insights into action with the speed of an entrepreneur • Leadership by all: Simplifying, making decisions, inspiring others, and acting like an owner • Focus on results: Leveraging a "refuse-to-lose" obsession with impact and value creation We have developed key recruitment, development, and retention strategies and objectives that guide our human capital management approach. These strategies and objectives are advanced through a number of programs, policies, and initiatives, as described below. As of May 30, 2021, we had approximately 18,600 employees, primarily in the United States. Approximately 46% of our employees are parties to collective bargaining agreements. We believe our relationships with employees and their representative organizations are good. Safety and Health: The health and safety of our employees is our top priority. We are focused on maintaining a strong culture of safety, in which all employees commit to protecting themselves and their colleagues. During fiscal year 2021, our Occupational Safety & Health Administration Incident Rate was 2.00 incidents per 100 full-time workers, as compared to 1.69 incidents per 100 full-time workers in fiscal 2020 and 2.28 incidents per 100 full-time workers in fiscal 2019. We compare our incident rate to that of the average for companies in the food manufacturing sector, as published by the Bureau of Labor Statistics. 5 In each of the last three fiscal years, our incident rate has been below the industry average. Our health and safety team audits each of our facilities every two years to ensure compliance with safety regulations and corporate policies. The team documents the audit results and tracks corrective actions to ensure we hold ourselves accountable for providing a safe work environment. Beginning in February 2020 and over the course of the COVID-19 pandemic, our senior leadership has relied on cross-functional teams (a COVID-19 pandemic team, Return to Office team, and Vaccine Preparedness team), to review and assess the evolving situation, and to recommend risk mitigation actions for the health and safety of our employees. In order to enhance the safety of our employees during the COVID-19 pandemic, these teams have recommended, and we have implemented, various measures, including the installation of physical barriers between employees; employee screening protocols; facility cleaning and sanitation protocols; policies on the use of personal protective equipment; and robust employee leave policies. We have also executed a phased return to office approach to enable in-person work for corporate personnel, implemented work-from-home initiatives for certain office personnel, and provided increased access to COVID-19 vaccines for production facilities and corporate locations. Diversity and Inclusion: We strive to nourish an inclusive culture that encourages openness, acceptance, and individual authenticity. We believe that an inclusive culture drives employee engagement. At Conagra, diversity is more than race, gender, sexual orientation, and disability. All backgrounds, perspectives, styles, and opinions are valued and belong at Conagra, and we harness the power of diversity and inclusion ("D&I") to accelerate innovation and growth and as key enablers of shareholder value creation. We approach diversity from the top-down, exemplified by our Board of Directors (the "Board") and our Senior Leadership Team: three of our 11 directors are racially/ethnically diverse, three of our 11 directors are women, and four of 10 members of our Senior Leadership Team are women. We believe that a diverse team with a variety of viewpoints adds value to our business decision making and innovation by encouraging and incorporating a variety of perspectives and experiences. During fiscal 2021, we launched numerous efforts to amplify our commitment to a diverse and inclusive workforce: • We established a Diversity and Inclusion Leadership Council (the "Council"), comprised of our Senior Leadership and Human Resource Diversity and Inclusion teams, to set our D&I strategy, track our D&I progress, and ensure execution of our D&I initiatives. • The Council refreshed the Company's D&I strategic plan during fiscal 2021, and declared a focus on recruiting, advocating for, and developing diverse talent. In each of these areas, we have multiple strategic initiatives underway. Core aspects of our strategy include building a strong entry-level pipeline; providing development opportunities for underrepresented groups, internal and external; and committing to develop and advance our talent along the way. Examples of recruitment, advocacy, and development initiatives launched during fiscal 2021 include the following: • In October 2020, we launched Conagra's inclusive leadership development program. Through the end of fiscal 2021, we have trained over 1,400 people managers in inclusive leadership practices. • In November 2020, we partnered with The Hatchery Chicago to create a twelve-week culinary internship program for individuals from underrepresented communities. • In May 2021, we announced a partnership with the Thurgood Marshall College Fund and the Hispanic Scholarship Fund through which Conagra will make donations to each organization for college scholarships in an effort to ensure that black and brown students receive equitable access to higher education opportunities. Conagra employees will also actively engage with scholarship recipients to provide professional development opportunities. • Throughout fiscal 2021, the Human Resources Committee of our Board (the "HR Committee") received regular updates from management on our D&I progress. The HR Committee has embedded D&I into its standing agenda and intends to discuss the topic at every regularly scheduled meeting it holds in fiscal 2022. We also continue to provide diversity and inclusion training for employees to highlight issues that impact underrepresented communities and to reduce the effects of bias in the workplace. Our goal is to create a culture of belonging, where everyone can experience inclusion. We want to be a place where people trust and respect one another. While we value and embrace diversity, we also celebrate what we all have in common—our energy and passion for making great food and great brands. 6 Learning and Development: We believe that by enabling employee development, we better position Conagra to meet current and future business needs and increase employee retention. By providing employees with learning and development opportunities, we empower them to build knowledge and skills and feel fulfilled in their work at Conagra. We leverage a variety of processes to enable employee learning and development at Conagra: • Employees have access to a variety of learning tools at Conagra, covering a wide array of topics. Our office-based employees can also access thousands of learning modules on-demand at their desks. • Individual objectives are set each year, providing employees with clear expectations for their performance in the short-term. Regular performance evaluations provide employees with feedback and growth opportunities. • Salaried employees are encouraged to develop Individual Development Plans ("IDP"). IDPs serve as a personal action plan, under which employees engage with their manager in ongoing development conversations, so that long-term career goals and developmental activities can be reviewed. Compensation and Benefits: We offer competitive compensation and benefits to attract the best talent and to support the overall well-being of our employees. Through our holistic approach to benefits, we provide our employees with resources to help them thrive. We offer a wide range of benefits across areas such as health, family, finance, community, and time away, including healthcare and wellness benefits, adoption and surrogacy assistance, family care resources, a 401(k) plan, family leave, and paid time off. A more complete discussion of our approach to employee compensation and benefits can be found in our Proxy Statement for the 2021 Annual Shareholders' Meeting. Additional information regarding our human capital management is available in our 2020 Citizenship Report that can be found on our website at https://www.conagrabrands.com/our-company/corporate-social-responsibility . Information on our website, including our 2020 Citizenship Report, is not incorporated by reference into this Annual Report on Form 10-K. Information About Our Executive Officers The names, ages, and positions of our executive officers as of July 23, 2021 are listed below: Name Title & Capacity Age Year First Appointed an Executive Officer Sean M. Connolly President and Chief Executive Officer 55 2015 David S. Marberger Executive Vice President and Chief Financial Officer 56 2016 Colleen R. Batcheler Executive Vice President, General Counsel and Corporate Secretary 47 2008 Charisse Brock Executive Vice President, Chief Human Resources Officer 59 2015 Thomas M. McGough Executive Vice President and Co-Chief Operating Officer 56 2013 Darren C. Serrao Executive Vice President and Co-Chief Operating Officer 55 2015 Robert G. Wise Senior Vice President, Corporate Controller 53 2012 Sean M. Connolly has served as our President and Chief Executive Officer and a member of the Board since April 6, 2015. Prior to that, he served as President and Chief Executive Officer and a director of The Hillshire Brands Company (a branded food products company) from June 2012 to August 2014, Executive Vice President of Sara Lee Corporation (the predecessor to Hillshire), and Chief Executive Officer, Sara Lee North American Retail and Foodservice, from January 2012 to June 2012. Prior to joining Hillshire, Mr. Connolly served as President of Campbell North America, the largest division of Campbell Soup Company (a branded food products company), from October 2010 to December 2011, President, Campbell USA from 2008 to 2010, and President, North American Foodservice for Campbell from 2007 to 2008. Before joining Campbell in 2002, he served in various marketing and brand management roles at The Procter & Gamble Company (a consumer packaged goods company). David S. Marberger has served as Executive Vice President and Chief Financial Officer since August 2016. Prior to joining Conagra Brands, he served as Chief Financial Officer of Prestige Brands Holdings, Inc. (a provider of over-the-counter healthcare products) from October 2015 until July 2016. Prior to that, Mr. Marberger served as the Senior Vice President and Chief Financial Officer of Godiva Chocolatier, Inc. (a global manufacturer and supplier of premium chocolates) from 2008 until October 2015. Prior to that, Mr. Marberger served Tasty Baking Company (a manufacturer and supplier of baked goods) as Executive Vice 7 President and Chief Financial Officer from 2006 to 2008 and as Senior Vice President and Chief Financial Officer from 2003 to 2006. From 1993 until 2003, he served in various roles at Campbell Soup Company (a branded food products company) , where he last held the position of Vice President, Finance, Food and Beverage Division. Colleen R. Batcheler has served as Executive Vice President, General Counsel and Corporate Secretary since September 2009 and served as Senior Vice President, General Counsel and Corporate Secretary from February 2008 until September 2009. Ms. Batcheler joined Conagra Brands in June 2006 as Vice President, Chief Securities Counsel and Assistant Corporate Secretary. In September 2006, she was named Corporate Secretary. From 2003 until joining Conagra Brands, Ms. Batcheler served as Vice President and Corporate Secretary of Albertson's, Inc. (a retail food and drug chain). Prior to that, she served as Associate Counsel with The Cleveland Clinic Foundation (a non-profit academic medical center) and an associate with Jones Day (a law firm). Charisse Brock has served as Executive Vice President and Chief Human Resources Officer since November 2015 and previously served as Senior Vice President and Interim Chief Human Resources Officer from August 2015 until November 2015. Prior to serving in these roles, Ms. Brock served as Vice President of Human Resources for the Consumer Foods segment of Conagra Brands from September 2010 until August 2015. Ms. Brock joined Conagra Brands in 2004 as Director of Human Resources, supporting the Refrigerated Foods Group. Prior to joining Conagra Brands, she served for 15 years at The Quaker Oats Company (a branded food products company) (which was acquired by PepsiCo during her tenure) in its Consumer Foods Division. Thomas M. McGough has served as Executive Vice President and Co-Chief Operating Officer since October 2018. Prior to that, he served as the Company's President, Operating Segments from May 2017 until October 2018 and as the Company's President of Consumer Foods from May 2013 until May 2017. Mr. McGough also served as President, Grocery Products from 2011 until May 2013 and as Vice President in the Company's Consumer Foods organization from 2007 to 2011. Prior to joining the Company, Mr. McGough served in various roles at H.J. Heinz (a food processing company), where he began his career in 1990. Darren C. Serrao has served as Executive Vice President and Co-Chief Operating Officer since October 2018. Prior to that, he served as Executive Vice President, Chief Growth Officer from August 2015 to October 2018. Prior to joining the Company, Mr. Serrao served as Senior Vice President, Chief Marketing and Commercial Officer at Campbell Soup Company (a branded food products company) from February 2015 until August 2015 and as Senior Vice President of Innovation and Business Development for Campbell North America from July 2011 until February 2015. Mr. Serrao has also held several profit and loss and marketing positions during his career, including roles with PepsiCo and Unilever. Robert G. Wise has served as Senior Vice President, Corporate Controller since December 2012. Mr. Wise joined Conagra Brands in March 2003 and has held various positions of increasing responsibility with Conagra Brands, including Vice President, Assistant Corporate Controller from March 2006 until January 2012 and Vice President, Corporate Controller from January 2012 until December 2012. Prior to joining Conagra Brands, Mr. Wise served in various roles at KPMG LLP (an accounting firm) from October 1995 until March 2003. Foreign Operations Foreign operations information is set forth in Note 20, "Business Segments and Related Information" , to the Consolidated Financial Statements contained in this report. 8 Available Information We make available, free of charge through the "Investors—Financial Reports & Filings" link on our Internet website at http://www.conagrabrands.com, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission (the "SEC"). We use our Internet website, through the "Investors" link, as a channel for routine distribution of important information, including news releases, analyst presentations, and financial information. The information on our website is not, and will not be deemed to be, a part of this annual report on Form 10-K or incorporated into any of our other filings with the SEC. We have also posted on our website our (1) Corporate Governance Principles, (2) Code of Conduct, (3) Code of Ethics for Senior Corporate Officers, and (4) Charters for the Audit/Finance Committee, Nominating and Corporate Governance Committee, and Human Resources Committee. Stockholders may also obtain copies of these items at no charge by writing to: Corporate Secretary, Conagra Brands, Inc., 222 Merchandise Mart Plaza, Suite 1300, Chicago, IL, 60654.