Campbell Soup Pepperidge Farm Milano cookies and Goldfish organic crackers
Campbell Soup is amping up advertising for its Goldfish and Milano brands.

CAMDEN, N.J. — The current environment in the cookie category is competitive, but Campbell Soup Co. is “very pleased” with the performance of its Pepperidge Farm and Arnott’s business, Denise M. Morrison, president and chief executive officer of Campbell Soup, told analysts during a May 19 conference call held in connection with the release of third-quarter financial results.

Denise Morrison, Campbell
Denise Morrison, president and c.e.o. of Campbell Soup

“The program that we’re running in the biscuit business is we are advertising our brands like Goldfish and Milano,” Ms. Morrison said. “We have increased innovation in all of our brands, and with new innovation in Pepperidge Farm Farmhouse cookies, which we’re excited about. These cookies are clean label, simple ingredients and thinner, crispy. They just provide a different experience.

“We’ve also upgraded our Classic cookie line to respond to the fact that the market has moved in terms of quality, and we need to maintain that edge. And then finally, we have a lot of confidence in our direct-store delivery network in terms of their ability to merchandise and work the shelf in store. And we think that combination is serving us well, and our business results are proving that out.”

Pepperidge Farm Farmhouse cookies, Campbell Soup
In April, Campbell Soup launched new Pepperidge Farm Farmhouse Thin & Crispy cookies.

A bright spot during the quarter for the company was its Global Biscuits and Snacks business unit. Sales increased 2% during the quarter to $623 million, and Ms. Morrison said EBIT rose 14%.

“The two main drivers of the sales increase were Pepperidge Farm and Arnott’s biscuit in Asia Pacific,” Ms. Morrison said. “First, Pepperidge Farm. I’m pleased with the performance of the team. Pepperidge Farm snacks continued to deliver strong results, fueled by Goldfish crackers and Pepperidge Farm cookies. Continued Goldfish growth was driven by larger pack sizes and multipacks, increased advertising and the continued expansion of our health and well-being offerings, especially Goldfish made with organic wheat.

“In cookies, sales increased across most of the portfolio. We’re pleased with the April launch of our new Farmhouse cookie brand.”

Pepperidge Farms swirl bread
There has been a decline in demand for Pepperidge Farm Sandwich and Swirl bread.

She said sales declined slightly in the company’s fresh bakery business, reflecting a decline in demand for Pepperidge Farm Sandwich and Swirl bread, coupled with increased spending to counter competitive activity. Buns and rolls delivered strong growth during the quarter, Ms. Morrison said.

Ms. Morrison was asked during the call about Campbell Soup’s different distribution models for its products, specifically whether the independent business operators system the company uses for Pepperidge Farm might be a fit for other areas of the Campbell Soup’s business.

“We run three different kinds of supply chain here,” she explained. “We run a warehouse supply chain. We run a fresh supply chain. And then in Pepperidge Farm … we run an independent distribution system through D.S.D. These distributors are entrepreneurs, and they’ve built a great business. In the snacks business, you do see a portion of the business in warehouse snacks, but you also see a large portion of the snacks business, whether it be sweet, savory or salty, in D.S.D. So we still believe in the model for this category. And the operations part of it calls for a very focused category distribution. And that’s where you can get the maximum effectiveness and efficiency. In fact, we have two separate D.S.D. networks — one for bakery and one for snacks — because of that reason. And we do believe that D.S.D. also helps with the quality of the product and making sure that we’re working the shelves every day.”

Pepperidge Farm delivery truck, Campbell Soup
Campbell Soup runs an independent distribution system through D.S.D. for its Pepperidge Farm products.

Overall, net income at Campbell Soup Co. for the third quarter ended April 30 totaled $176 million, equal to 58c per share on the common stock, and a decline when compared to the same period of the previous year when the company earned $185 million, equal to 60c per share.

Sales for the quarter fell 1% to $1,853 million, which compared with $1,870 million the previous year.