Campbell advancing growth strategies
by Eric Schroeder
NEW YORK — Denise Morrison, president and chief executive officer of Campbell Soup Co., said the Camden, N.J.-based company is “working very hard to lay the groundwork for a different and exciting future for Campbell.” Ms. Morrison spoke May 30 as part of the Sanford C. Bernstein & Co. Strategic Decisions Conference in New York.
As part of its effort to build a global food company with superior consumer brand value, Ms. Morrison honed in on three growth strategies in place at Campbell: to stabilize and then profitably grow North America soup and simple meals; to expand the company’s international presence; and to continue to drive growth in healthy beverages and baked snacks.
While acknowledging Campbell was not satisfied with the performance of some of its businesses in the most recent quarter, Ms. Morrison stressed the company remains undeterred.
“What we are building is a longer-term idea, one that must be sustained through brand building, innovation and expansion into higher growth segments that speak to today’s consumers,” she said. “The winners in this environment will succeed through creativity, agility, patience and fortitude.”
Keeping it ‘simple’
Ms. Morrison said Campbell’s first priority in North America is “to stabilize and then profitably grow U.S. simple meals.”
“U.S. simple meals profit was challenged in the most recent quarter, largely due to greater-than-expected volume loss in our soup business and an increase in marketing spend that was planned,” she said. “Year-to-date, we are still broadly in line with the level of volume loss that we anticipated this year as we move away from very deep discounting and focus on growing the profitability of this business.
“Make no mistake, we will increase the competitiveness of this category in the coming fiscal year with delicious new products that are new to the world and speak directly to underdeveloped demographic groups and renovation to our base business that connects with our core consumers.”
Planned actions include a “refreshing” of the Chunky and Select Harvest lines, a move toward new convenient packaging formats that are expected to have a stronger appeal to certain consumer groups, and, in fiscal 2013, the launch of Campbell’s Go!, a new line of products with “intriguing global cuisine and flavor profiles, rich product textures, dynamic new packaging, and edgy packaging graphics.” Also in 2013, Ms. Morrison said Campbell will introduce Campbell’s Skillet Sauces, which are sauces in pouches with bold flavors such as creamy chipotle, Thai green curry and fire roasted tomato.
Mosaic of approaches
On the international front, Ms. Morrison said Campbell is exploring “a mosaic of approaches.”
“We are open to acquisition, partnership or a mix of entry models for building scale closely tied to the structure of each market,” she said.
Efforts to improve the international business include the recent naming of a new president of Asia, as well as incorporating a new approach to the company’s export business by prioritizing key distributors by region and leveraging them to explore new opportunities for the company’s brands.
“We are expanding soup and beverage distribution throughout Latin America using a distribution network in Central America, and we have successfully introduced Pepperidge Farm cookies in France,” Ms. Morrison said. “We are exporting soup, beverages and biscuits into Dubai for distribution throughout the Middle East, and we export Arnott’s biscuits into more than 70 countries worldwide.”
The health of beverages, snacks
The third leg of the strategic framework focuses on driving continued growth in healthy beverages and baked snacks.
Ms. Morrison said Campbell has been able to grow V8 by extending the brand beyond traditional tomato-based beverages, first with V8 Splash and more recently with V8 V-Fusion.
“Both of these lines have been very successful, and the reason is pretty simple — when we deliver vegetable nutrition without the vegetable taste, we expand the market,” she explained.
An area ripe for growth in the beverage category is products for children, and Ms. Morrison said Campbell intends to tap into that market with the launch this summer of V8 V-Fusion juice boxes. Later this fall, the company plans to add flavors to the original V8 line, including hint of lime and black pepper.
The Baked Naturals line of cracker chips has provided Campbell’s Pepperidge Farm business with more routes into the adult savory space, Ms. Morrison said. In 2013, the company plans to drive further growth with the introduction of Jingos!, a crunchy baked snack cracker that is seasoned twice “for an explosive taste in lime and sweet chili, Parmesan garlic and fiesta cheddar flavors,” she said.