Why supply chain is the beating heart of any organization, according to Conagra Brands
Fuel for growth
I have been in the consumer goods industry for almost three decades,” begins Alexandre ‘Ale’ Eboli, Executive Vice President and Chief Supply Chain Officer at Conagra. “My career began back in my home country of Brazil, then Latin America and Europe, until I arrived in the US and joined Conagra. I have spent the last 27 years working and travelling across different geographies.
“The beauty of Conagra is that we are a highly focused company in terms of our portfolio,” he goes on. “By concentrating on the North American market and consumer brands, we have created a strong sense of team spirit and commercial agility, allowing our employees to collaborate in an inventive way. We do things quickly, both in terms of connecting to customers as well as expanding and maintaining the brands they love.”
Conagra is the manufacturing force behind household brands such as Birds Eye, Slim Jim, Gardein, Duncan Hines, Healthy Choice, Earth Balance, Reddi-wip, and Orville Redenbacher’s – just to name a few. In the last 15 years, Conagra has made a concerted effort to modernize its portfolio, creating fresh products – and revitalizing iconic ones – to reflect the needs of customers and consumers alike.
In today’s highly competitive marketplace, it has never been more important to stay relevant and up-to-date with the latest trends. Consequently, as Ale details, the food giant has grown even bigger in stature, garnering substantial returns for its shareholders and investing back into the business and its portfolio of iconic brands.
“Simply put, our intent is to continue to serve our customers and consumers with high quality food and innovative products – each and every day,” says Ale. “Our products fall into three main categories. First is our frozen food, which has gone through a resurgence in recent years as we’ve introduced new products into the frozen aisle that are more aligned with consumer preferences. By premiumizing our frozen portfolio, we’ve been able to offer consumers convenience, affordability and nutrition, and also a means of reducing their waste through the use of sustainable packaging.”
Fresh food spoils. That is not new. With frozen food, we take out what we need when we need it, and the rest is saved until another day. Less ends up in the bin. But Conagra is taking this aspect of sustainability and waste reduction one step further. Evol, a Conagra-owned brand focused on making tangible steps towards the protection of the environment, recently became the first manufacturer to introduce Carbonfree Certified Carbon Neutral frozen meals. In addition, these products are produced in a TRUE certified Zero Waste facility.
To earn this accolade, plants must have diverted an average of 90 percent or greater waste from landfills or made other equivalent waste reductions in the last 12 months. The eco-friendlier range, which includes the all-new Five Cheese Alfredo Mac with Chicken as well as eight other certified single-serve offerings, utilizes fully recyclable paperboard cartons and paper bowls to slash the carbon footprint of packaging across the line.
Small changes make big environmental savings. Indeed, across its Healthy Choice Power Bowls range, a significant carbon saving has been made by Conagra. By using plant-based fibers instead of plastic, the carbon footprint of manufacturing select product lines has been reduced by up to 70 percent, helping to decrease the company’s overall carbon footprint by 34,117 metric tons – the equivalent to avoiding greenhouse gas (GHG) emissions produced by driving 84 million miles.
Ale continues his overview of Conagra’s three distinct product categories: “The second is snacks, so we produce meat sticks, popcorn, sunflower seeds, puddings, and more. We continue to innovate in places that see new or growing consumer demands. If you think about it, a popular meat stick like Slim Jim is free from carbohydrates, and that is really well-received by consumers. Similarly, popcorn offers a healthier option than, say, regular potato chips. These snacks form what we like to call an ‘acceptable indulgence’ for our consumers, and we are growing quite a lot in that space. Another example is keto-friendly cake mixes from Duncan Hines, a versatile option for those following a ketogenic diet but wanting to still get that sweet fix. Addressing this particular consumer need has stimulated significant growth for us.
“Finally, we have our staples category, which are ingredients and enhancers, and shelf-stable meals and sides,” he goes on. “This portion of the business is all about keeping brands available, profitable, and serving consumers according to their evolving needs. It is always imperative to identify and match changing trends: ten percent of turnover comes from innovation and delivering products that directly respond to market analysis. It is a core component of our strategy,” asserts Ale.
Beneath the brands, however, is a rigorous supply chain strategy and program that keeps the wheels turning at Conagra. Without it, particularly in these current times of geopolitical and economic turmoil, names like Slim Jim and Birds Eye might not be available on grocery store shelves.
To prevent that, Ale spearheads a robust supply chain division that focuses on building from a strong base with an experienced and capable team to ultimately drive gross margin and customer service through an aggressive end-to-end productivity agenda. According to Ale, investments in people, assets, and technology make that happen.
Driving forward with an agile and resilient end-to-end supply chain is part of Conagra’s ambition of delivering $1 billion in cost savings over the next three years and becoming the best supplier in the food industry. Yet, for Ale at least, it goes much deeper than that. “There are two things in supply chain that allow me to wake up happy each morning,” he reveals. “The first is that we are responsible for the livelihoods of 15,000 people across a total of 42 factories in the US, Canada, and Mexico. These factories are responsible for approximately 80 percent of the food that we sell; the rest is produced by core manufacturers that operate as an extension of our manufacturing footprint. We ship products from 21 distribution centers across the entire country.
“If, on average, each one of those 15,000 employees has a family of four, then you can imagine the number of people we are impacting – and that is not counting suppliers, their workers, and their workers’ families,” he aptly points out. “We are one of – if not the – biggest employer in this wider network of communities; thus, we see it as our duty to conduct business in a responsible way and also give back to the communities. We treat people with respect as we truly have a tangible impact upon their lives.
“The next special aspect of supply chain management is how it relates to and interacts with the wider business,” he says. “We are the metaphorical heart of the company; we make the blood pump through the system every day, despite the challenges and obstacles that are bound to arise. This is particularly special here at Conagra because we have a uniquely strong partnership with sales, marketing, and finance – all of whom are driven to find creative solutions. Indeed, we approach the supply chain holistically as an orchestrator of specialties, meaning our network of suppliers depends on us to open commercial channels and facilitate the flow of imaginative ideas.”
To expedite that process, Conagra has reorganized its supply chain management, leveraging the integration of end-to-end procurement, manufacturing, logistics, product quality, and service. Suppliers become intertwined with the customer as part of that network.
Key to Conagra’s strategy is its Fuel for Growth program. Ale explains: “The Fuel for Growth program is made up of five pillars and one core, foundational element. The first pillar is Network Optimization, which is not just limited to logistics. In that area, we are centralizing our network and expect to reduce 50 percent of shipping locations within the next three years. Regarding the manufacturing side, we are reviewing opportunities for either consolidation or outsourcing (if they are needed), and finding new capabilities that we can leverage.
“The second pillar is Integrated Margin Management, which is basically our productivity program,” he adds. “The focus, here, is on identifying opportunities on mostly a cost basis across the entire supply chain, so we have a strong team of people always looking at how we can optimize formulations, integrate better, reduce waste, increasingly automate, and digitize our supply chain. All this is part of a wider company effort to be more efficient and lean in our manufacturing and distribution processes.
“The third concerns End-to-End Planning and the retooling of related processes,” comments Ale. “This area is utilizing data science and has successfully implemented artificial intelligence to aid that reconfiguration; consequently, thousands upon thousands of models have been created to find the right weekly location for item combinations. Another concrete example we have used to bolster this pillar is a tool called Blue Yonder – a software that allows us to be much more agile in terms of supply and long-term capacity planning.
“Finally, we have pillars four and five,” he notes. “Talent Management is a pillar that reflects how we attract, maintain, and develop our people and offer them a pathway to a successful future, and the final pillar is Sustainability, which can be broadly summarized by improving our operations through five areas of priority: decarbonization, packaging, agriculture, waste, and water. For each of these, we are building programs that mirror our commitment to the environment.”
Ultimately, each pillar underpinning the Fuel for Growth program is sustained by a core element: Conagra’s continued investment in technology. This includes, for instance, Connected Shop Floor, an innovative program that will neatly digitize and standardize all of the food giant’s manufacturing sites, and Oracle Transportation Management (OTM), a logistics service used to upscale a range of execution capabilities.
On a larger scale, Conagra has also recently opened a new, 245,000-square-foot vegetable processing plant in Waseca, Minnesota. The state-of-the-art facility processes fresh vegetables – taking them from harvest to frozen in just five hours – to support Conagra’s frozen division and Birds Eye brand. The Waseca site was built to the company’s own specification, maximizing automation to generate greater operating efficiencies and enhance food safety measures. Water usage per pound of product produced will be cut by upwards of 25 percent and Conagra will operate with a 20 percent higher throughput capacity, leading to a better overall yield.
It is worth pausing on the sustainability aspect of Conagra’s operations once more. Reduced water usage is an important factor across plant processing sites; however, the company aims to embed more environmentally-friendly methods across its entire supply chain.
Indeed, supply chain sustainability initiatives have not only reduced Conagra’s carbon footprint by 215,000 metric tons and waste by 122,700 tons, but also saved the company $280 million since 2009. Environmentally-minded moves such as this are driven by Conagra’s overarching green agenda: the food company has committed to reducing Scope 1 and 2 GHG emissions by 25 percent by 2030 and will slash Scope 3 emissions from purchased goods and services by up to 20 percent per metric ton of material sourced within that same timeframe.
As mentioned previously, Conagra has already begun to implement plant-based serving bowls across select product lines, which have avoided an estimated 23 million pounds of plastic, while also driving $1 billion in sales. Another example Ale is keen to highlight is the transformation of Swiss Miss’ Coco Powder packaging.
“We were the first major hot cocoa brand to move to a cubical shape instead of the conventional cylindrical one,” he says. “The shape of a product affects everything – how you build and stack pallets, space utilization in transport, and the amount of stock that can be stacked on shelves. By altering the shape of the packaging, we managed to completely change the carbon footprint of the product, making Swiss Miss better for the environment and more profitable.”
The new Swiss Miss easy-to-grip container is made of recyclable plastic and features a space-efficient cube design that is said to reduce the carbon footprint associated with manufacturing and transportation by 15 percent – the same as avoiding emissions expelled by driving 243,176 miles.
“Each sustainability initiative makes sense for both the planet and the business,” concludes Ale. “That interconnection is powerful, and we will continue to invest in this dynamic space going forward. But we will also continue to play the game we are currently winning, and that means continuing to innovate, grow, and listen to consumer demand. Everything comes down to digitizing and improving operations across the supply chain.”