It is “unrealistic” to expect food prices to come down anytime soon, ConAgra CEO Gary Rodkin told CNBC Tuesday.
The food company behind Wesson oil, Orville Redenbacher popcorn, and Hebrew National hotdogs has seen its commodities costs rise 10 percent.
“We see that moderating over the 12 months or so but we do not see it declining,” he said. “Therefore, while we may see the slope moderate and prices moderate it’s probably not realistic to assume you’re going to see sharp downturns in retail pricing.”
The food industry as a whole has seen a downturn in unit volumes since after Thanksgiving late last year, he said, “and it’s hard to put your finger on exactly what the key factor is.” But he said the effect of growing “input cost inflation” is now fully priced into the cost of food products on shelves today, which may be a factor.
The price of gas is another factor in consumers cutting back spending, he said. “The vast majority of consumers find $4 gasolinedifficult to deal with. They just don’t have that much discretion in their disposable income to be able to really handle that. It is a tough market for us.”
To counter that, ConAgra is looking to move further into private labelbrands and supplement its core businesses with faster-growing “adjacent” businesses. He also expects there will be mergers into “faster-growing categories and geographies,” as the company tries to double its international business. He gave no details.