U.S. food makers are looking overseas for more profitable growth over the next few years, as they often must rely on short-term price promotions to drive sales at home.

Kraft Foods Inc said its acquisition of Cadbury would accelerate long-term growth, though it expects the deal to hurt 2010 results."The U.S. consumer is all grown up, and future growth in consumer spending will be outside the U.S.," said Edward Jones analyst Matt Arnold.From that perspective, Kraft buying Cadbury makes a great deal of sense, Arnold said. The concern is the price Kraft paid, including CEO Irene Rosenfeld's decision to sell a thriving frozen pizza business to secure the Cadbury deal. Rosenfeld admitted the move was "a difficult decision."

General Mills Inc said it is encouraged by an expanding middle class in emerging markets. "We just see this middle class growing and growing around the world," General Mills CEO Ken Powell said at the Consumer Analyst Group of New York conference in Boca Raton, Florida, on Tuesday.Chris O'Leary, COO for General Mills' international unit, said for now the company is focusing more on growth than profit margins in emerging markets. Still, its business in China is already a profitable one. General Mills expects its sales in China to nearly triple to $900 million in fiscal year 2015 from $306 million in fiscal year 2009. It also sees potential in markets like Russia, Indonesia and Vietnam, O'Leary said. General Mills said it also sees opportunities to grow sales in Western Europe, noting that household penetration for products like Haagen-Dazs ice cream, Old El Paso Mexican foods and Nature Valley cereal products in that region is well below that of other parts of the world.

Sara Lee Corp CEO Brenda Barnes noted that many categories, such as smoked sausage and hot dogs, are dominated by branded foods and said her company has been more disciplined about pricing. Sara Lee is still actively working to sell its European shoe care and insecticides businesses, CFO Marcel Smits said. CEO Barnes said acquisitions are possible, but any deals would have to be done with discipline as the company works on its leaner profile. For now, Sara Lee plans to repurchase up to $3 billion of its shares to pass some of the money from its planned European business divestitures on to shareholders.

ConAgra Foods Inc, known for foods such as Banquet frozen meals, said there is no let-up in consumers' desire to save, so prices are very important to store traffic. At home, ConAgra wants to see continued growth from products such as Ro-Tel diced tomatoes, said Consumer Foods President Andre Hawaux. He even told investors at the Florida conference about a queso cheese dip that can be made by mixing Ro-Tel with Kraft's Velveeta. "You know it must be good for me to plug one of Irene's brands so hard," Hawaux said during a morning presentation, prompting some laughs from the crowd. ConAgra stood by its 2010 forecast and long-term growth expectations and announced a $500 million share repurchase plan.

Source: Reuters via flex-food-news.com