The rating reflects ConAgra Foods' diverse portfolio of well-known packaged-food brands, its good geographic coverage in the U.S., and its improving credit protection measures. These factors are partially offset by the company's recent operating weaknesses in the company's consumer foods segment (about one half of revenues), and Standard&Poor's expectation that the company will be acquisitive over the intermediate term. We expect ConAgra Foods' operating margins to improve now that it has divested its lower-margin businesses. These divestitures allow the management team to focus on the higher-margin packaged-foods segment, as well as on restructuring the organization--improving the company's business processes, manufacturing and marketing capabilities, and continued SKU rationalization. This should result in a more centric-focused organization from a decentralized
