Campbell to eliminate self-imposed barriers in biscuits and snacks

by Eric Schroeder
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BOCA RATON, FLA. — In late January, Campbell Soup Co. unveiled sweeping changes in the company’s organizational structure, including a change in leadership for its baking and snacking unit. Less than a month later, the company is moving forward with a pivotal change in the structure of its global biscuits and snacks business that its top executive believes will eliminate self-imposed barriers to growth.

“On a global basis, the size of the prize in (the global biscuits and snacks) category is enormous,” Denise Morrison, president and chief executive officer of Campbell Soup Co., Camden, N.J., told analysts at the Consumer Analyst Group of New York conference in Boca Raton on Feb. 18.

Attaining that prize, though, means a shift in the makeup of its operations. Until recently, Campbell’s Pepperidge Farm, Arnott’s and Kelsen Group businesses operated separately. Ms. Morrison said the strategy failed to fire on all cylinders.

“By operating and managing these businesses in separate silos we have sacrificed opportunities to unleash the power of our diverse brand assets and leverage the full power of our biscuits and snacks portfolio,” she said. “Simply put, our organization’s structure has constrained our ability to build scale, manage costs, fund growth and participate fully in many of the large opportunities in this immensely attractive category.

“The time has come for us to eliminate these self-imposed barriers, so we will now combine Pepperidge Farm, Arnott’s and Kelsen into a single unified global biscuits and snacks division that will bring a global perspective to the management of our biscuits and snacks business, unlock its potential and leverage the scale of our product range across both developed and developing markets, with assets that we already own as well as others that we may acquire, people who we already have, brands that span multiple consumer needs and differentiating category expertise that we can fast adapt to each market.”

Ms. Morrison said Campbell particularly is excited by the growth in biscuits and snacks that is occurring in developing markets as incomes are increasing for new middle-class consumers and product formats are shifting from bulk to packaged snacks.

“These trends represent major opportunities for us,” she said. “With our new organization structure and mindset we will be well-positioned to go after them.”

Helping establish the new mindset will be Luca Mignini, who was named president – Global Biscuits and Snacks, in January. He will be charged with leading a division that generated about $2.8 billion in fiscal 2014 sales, or about one-third of Campbell’s total sales, and about 25% of its total operating earnings.
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