Soup means M'm! M'm! Money! at the world's #1 soup maker Campbell Soup. The company's most popular selections in the US include chicken noodle, tomato, and cream of mushroom. Campbell also makes and markets meal kits, SpaghettiOs canned pasta, Pace picante sauce, V8 beverages, and Pepperidge Farm baked goods (including those popular Goldfish crackers). Campbell's Australian division produces snack foods, such as the Aussie favorite Arnott's biscuits. The food manufacturer, which sells its products in more than 160 countries, boasts facilities throughout the world. In addition to North America, its principal markets are Australia, Belgium, France, and Germany.
After a decade with the same CEO, the food company promoted from within as part of a succession plan. In mid-2011 Denise Morton rose from EVP and COO to CEO, succeeding Douglas Conant who had led Campbell since 2001. Several other executives were named to top positions in the US and international businesses in 2010 prior to the CEO succession.
The company is working to increase profits by focusing on three categories worldwide -- simple meals, baked snacks, and healthy beverages. Campbell intends to increase product innovation and consumer marketing initiatives for products in the Campbell's, Swanson, Pace, Prego, Liebig Erasco, Pepperidge Farm, Goldfish, Arnott's, and V8 lines that fall under the three categories. Campbell looks to stablize and boost the profitability of its North American soup and simple meals businesses in 2012.
Campbell is also focused on boosting its presence in international markets with existing products in Europe and Asia Pacific. It also hopes to capture market share in fast-growing markets in Asia and Latin America through acquisitions and strategic alliances, such as joint ventures. Indeed, Campbell will be leveraging its joint venture with Swire Pacific Limited to build its soup and simple meals business in China.
With China having one of the world's highest rates of per-capita soup consumption, Campbell has been focusing its efforts there in recent years. After entering the Guangdong province in late 2007, the company expanded to Shanghai the next year. Campbell in 2011 began to turn up the heat on soup-making in China, where some 355 billion servings of mostly homemade soup are consumed each year. To this end, Campbell formed a joint venture with its Chinese distribution partner Swire Pacific Limited in early 2011 to chase after the commercial soup market. Named Campbell Swire, the venture is controlled by Campbell, which retains a 60% ownership in the partnership, and based in Campbell's Shanghai offices.
For its healthy beverages business, the food company plans to chase after fast-growing product segments, such as energy drinks and juices, while also growing this business outside the US. To set up its baked snacks business for growth, Campbell is building a new 34,000-sq.-ft. innovation center at the Pepperidge Farm headquarters.
Campbell expects the effort to revitalize its business to require substantial investment, however. Funding the initiatives will negatively affect financial performance for that year but help set the stage for profitability in 2013 onward.
Challenged in quality and sales by General Mills' Progresso-brand soups, Campbell has boosted the taste of its products -- adding more vegetables to its vegetable soup and making its cream soups creamier. The company's Away From Home business follows customers out of the kitchen, selling soup, sauces, and buns to cafeterias, fast-food restaurants, and harried consumers via the supermarket. It has added microwaveable versions of its Chunky and Select soups.
Answering to changing consumer tastes, the company has been reducing the salt content of its foods and intends to continue to do so with some of its best-selling brands, including its iconic tomato soup, along with V8, Healthy Request, Chunky, and Goldfish products.
Meanwhile, Campbell has continued to expand its brand portfolio. It acquired Ecce Panis, a maker of artisan breads. Folded into the Pepperidge Farm operations, the 2009 acquisition gave Campbell entry into the growing higher-margin artisanal bread sector. It had acquired the Wolfgang Puck soup label from Country Gourmet Foods in 2008 and inked a licensing deal with Wolfgang Puck Worldwide to use the celebrity chef's name on additional broth and stock products.
To concentrate on its revenue-generating soup and snacks businesses, the company sold its premium chocolate maker Godiva to Turkish food company Ülker. Campbell pocketed $850 million from the sale in 2008 and used the proceeds to repurchase shares. The company also divested its French sauce and mayonnaise business, which was marketed under the Lesieur brand, for $42 million as well; it also sold some of its Australian salty snack brands including Cheezels, Thins, Tasty Jacks, French Fries, and Kettle Chips. The French and Australian divestitures were part of Campbell's operational-efficiency and long-term restructuring initiative, which began that year. Whittling down manufacturing costs, Campbell in mid-2010 sold its German Village Products pasta facility in Ohio to Philadelphia Macaroni, which has in turn agreed to supply pasta to Campbell.
Fiscal year 2010 saw the company's net sales increase 1% when compared to the previous year. Its productivity efforts saw gross profit increase 1% as well. Sales from its baking and snacking sector rose 7%, due to additional sales from newly acquired Ecce Panis plus volume gains; its international soup, sauces, and beverages sector grew by 5%, mostly due to currency differences. However, sales for soup, sauces, and beverages in the US (traditionally Campbell's most lucrative segment) were down by 2% and within that segment, sales of its iconic condensed soups were down 2% and ready-to-serve soups (both canned and microwavable) were down by a dismal 9%. Broth sales, though, were in the plus category, increasing 3% due to consumer demand for more natural, less processed products; its V8 products did well, with sales percentages increasing in double digits; its Prego pasta sauces also did well. North American foodservice sales declined 4% due to the continuing drop off in dining out by consumers.
The company operates manufacturing facilities in 14 US states and 10 foreign countries. Wal-Mart is Campbell's largest customer, accounting for 17% of sales. The descendants of John Dorrance, the inventor of condensed soup and founder of the company, own approximately 42% of Campbell.