ConAgra has been one of top-performing companies in the packaged food sector in 2014, posting stock gains of 8.46% and beating the 6.73% gain in the S&P 500 (SPY) and the 2.97% gain in the Dow Jones Industrial Average (DJI) .
The company best known for popular brands like Chef Boyardee, Healthy Choice, and Slim Jim reports its second quarter Thursday, expected to show year-over-year declines. But ConAgra has moved to satisfy consumers' potato craving, and that's a good thing for shareholders.
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According to Euromonitor International, a strategy research service for consumer markets, the frozen potato category is projected to grow by 1.8 billion pounds (about $2.83 billion) between 2013 and 2018.
The growing global popularity of french fries and hash-browns (among other potato products) has moved Omaha, Neb.-based ConAgra to recently announced it will invest $150 million in adding a second production line to its frozen potato processing plant in Netherlands as part of its Lamb Weston-Meijer joint venture. The company said the second production line will be fully operational in the middle part of 2016.
This is the second time in less than a month ConAgra has shown that potatoes will be an important part of its long-term growth.
In late November, ConAgra opened its Lamb Weston potato processing facility in Shangdu, Inner Mongolia -- its first food plant in China. This is a part of the company's international expansion strategy, prompting it to purchase TaiMei Potato Industries Limited in July.
ConAgra's love for potatoes and its aggressive growth strategy is well-thought out.
Paul Maass, ConAgra's president of Private Brands and Commercial Foods, said these moves positions ConAgra to meet emerging market growth through a highly efficient, well-established dual sourcing model supplying. ConAgra, he added, will be able to offer its consumer base in both North America and Europe the frozen potato products they want.