The Supply Side briefs: Cargill acquires Pet Carousel, ConAgra lowers guidance

• Cargill to acquire Pet Carousel
Cargill plans to acquire Pet Carousel, a Sanger, Calif.-based manufacturer of private label dog treats. Terms of the deal were not disclosed.

Cargill believes Pet Carousel will complement its California distribution and beef processing business. The company expects Pet Carousel to benefit from Cargill's distribution network and supplies of high-quality beef, pork and turkey.

“From Cargill’s perspective, Pet Carousel has a lot to offer in the way of synergies with our existing animal protein and distribution businesses,” said John Niemann, president of Wichita-based Cargill Food Distribution.

Pet Carousel produces and markets Roper brand cotton blend chew ropes, Choo Hooves natural bones and chews and a line of natural white meat chicken and jerky, and sweet potato and vegetable chews. The company operates a 36,000-sq.-ft. facility with 25 full-time employees.

“I am extremely excited to join forces with Cargill in a venture devoted to meeting consumer needs, while also allowing us to showcase our natural pet products to more customers,” said Troy Becker, president of Pet Carousel. Becker will join Cargill and work from the Sanger facility. He is the son of founder Gary Becker.

Cargill is a supplier to Wal-Mart Stores Inc.

• ConAgra lowers earnings guidance
Challenges in the consumer foods and commercial foods segment prompted ConAgra Foods to lower its earnings per share guidance for fiscal 2014.

Omaha-based ConAgra revised its diluted earnings per share outlook to a range of $2.22 to $2.25, down from previous guidance range of $2.34 to $2.38. The company attributed the revision to weaker-than-expected sales for a few brands in the consumer foods segment, and margin pressures in the commercial foods segment.

The company had forecasted its newly acquired Ralcorp to contribute approximately 25 cents in earnings per share in fiscal 2014. The company now estimates that number to be approximately 20 cents.

Volumes for the consumer foods segment are expected to decline at 3% to 4% in the back half of 2014.

Gary Rodkin, CEO of ConAgra Foods, said forecasting fiscal 2014 was difficult.

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“We are intensely focused on improving our business,” Rodkin said. “It is taking longer than expected to stabilize the performance of the private brands segment, which has been below plan because of pricing, sales force coverage, and customer service issues largely resulting from restructuring actions taken before we bought that business last year. We view these as near-term issues only, and remain fully confident in our private brands strategy and the growth opportunities resulting from the recent acquisition of Ralcorp.”

ConAgra is a supplier to Wal-Mart Stores Inc. with a large sales office in Bentonville.

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