Soup boils down to M'm! M'm! Money! at the world's #1 soup maker Campbell Soup. The company's most popular selections among its 90-variety soup portfolio in the US include chicken noodle, tomato, and cream of mushroom. Campbell also makes many other simple foods, snacks, and beverages, including SpaghettiOs canned pasta, Pace picante sauce, V8 beverages, Aussie favorite Arnott's biscuits, and Pepperidge Farm baked goods (including those popular tiny Goldfish crackers). Newer products for the soup company include Garden Fresh Gourmet salsas and dips, and Bolthouse Farms carrots and organic baby foods. All told, Campbell sells its products in 100-plus countries from facilities across the globe.
Campbell sells products in three core categories. Its Simple Meals products, which generated 55% of its total sales in fiscal 2015 (ended August) include Campbell’s condensed and ready-to-serve soups; Swanson broth and stocks; Prego pasta sauces; Pace Mexican sauces; Campbell’s gravies, pasta, beans and dinner sauces; Swanson canned poultry; and Plum Organics food and snacks. Campbell's Baked Snacks (31% of sales) include Pepperidge Farm cookies, crackers, bakery, and frozen products in US retail; Arnott’s biscuits in Australia and Asia/Pacific; and Kelsen cookies globally. The company's Beverage products (14% of sales) includes V8 juices and beverages, Campbell’s tomato juice, and Bolthouse Farms' super-premium refrigerated beverages.
For fiscal 2016 (ended August), the company planned to simplify its business from five operating segments into three: Americas Simple Meals and Beverages; Global Biscuits and Snacks; and Campbell Fresh.
The company principal brands, including Arnott's, Bolthouse Farms, Campbell's, Goldfish, Kjeldsens, Pace, Pepperidge Farm, Plum Organics, Prego, Swanson, and V8, are protected by trademark law in the major markets where they are used. In addition, some of the company's products are sold under brands that have been licensed from third parties.
The company operates more than 25 manufacturing facilities in the US and abroad. The US is Campbell's largest market, accounting for 79% of its sales in FY2015. Australia accounted for 8% of sales, while other countries contributed the rest. Campbell has executive offices in Norwalk, Connecticut; Bakersfield and Emeryville, California; Toronto, Canada; Nørre Snede, Denmark; and North Strathfield, Australia.
Sales and Marketing
Campbell's established simple meals, snacks and healthy beverages businesses are concentrated in slower-growing center-store categories in traditional mass and grocery channels. The company's businesses are largely concentrated in the traditional retail grocery trade. In recent years, alternative retail grocery channels, such as dollar stores, drug stores, club stores and Internet-based retailers, have increased their market share. This trend towards alternative channels is expected to continue in the future.
Wal-Mart is Campbell's largest customer, accounting for 20% of sales in FY2015. Its four other largest customers accounted for another 18% of its sales during the year.
Campbell has been decreasing its advertising spend in recent years, though it pledged to spend a larger percentage of its marketing efforts on digital marketing and e-commerce channels while decreasing its television spend in 2016. Overall, the company spent $385 million on advertising in FY2015, down from $411 million and $419 million in fiscal years 2014 and 2013, respectively.
The company has struggled to grow its revenues and profits over the past several years as its many of its product lines have matured and as the US dollar has strengthened.
Campbell's revenue dipped 2% to $8.08 billion in fiscal 2015 (ended August), mostly due to sales declines in its international baking, snacking, simple meals, and beverage lines from unfavorable currency exchange rates, though sales actually increased slightly when not factoring for currency conversions. In the US, the company's beverage sales declined 5% from shrinking V8 V-Fusion and V8 vegetable juice sales amidst increasing competition, though its V8 Splash beverage sales increased. Its US Simple Meals sales were flat, with soup sales declining by 3 to 5% and broth, Prego pasta, Plum products, and Campbell's dinner sauces sales increasing.
Revenue declines in FY2015 caused Campbell's net income to fall 16% to $691 million. The company's operating cash levels jumped 31% to $1.2 billion for the year, however, mostly as it had lower working capital requirements, paid less in taxes than in FY2014 when it sold its European simple meals business, and paid less in pension contributions.
Campbell planned in 2015 to take a number of steps to strengthen its established business lines, intending to launch more than 200 new products during the year to meet consumers’ changing tastes, preferences, and needs. It also continues to selectively acquire food companies that complement its product lines.
In its American soup and simple meals business, the company expects to improve performance by enhancing product quality and elevating its marketing and brand-building efforts. It also looks to introduce new soup and simple meal products responsive to consumers’ desire for indulgent or premium foods; their increasing appetite for ethnic and regional cuisines; and their growing interest in quick and easy home-cooking solutions. To this end in late 2015, the company leveraged its partnership with top US coffee brewer brand Keurig Green Mountain by launching its new line of Campbell's K-Cup Soups. Addressing changing consumer tastes, the company has also been reducing the salt and preservatives content of its foods across some of its best-selling brands, including its iconic tomato soup, along with V8, Healthy Request, Chunky, and Goldfish products. Challenged in quality and sales by rival General Mills' Progresso-brand soups, Campbell has enhanced the taste of its products by adding more vegetables to its vegetable soup and making its cream soups creamier.
For its shelf-stable beverage business, the company will target health-conscious adults with its V8 branded beverages and households with children with its V8 Splash branded beverages. Pepperidge Farm will remain focused on building the Goldfish cracker brand, maintaining the momentum of its fresh bakery portfolio, and revitalizing its adult savory crackers business. The company will also continue its efforts to reinvigorate its businesses in Australia, focusing on Arnott's biscuits.
Beyond the US, Campbell hopes to boost its production and sales presence abroad, moving into fast-growing markets in Asia and Latin America through acquisitions and strategic alliances. With China having one of the world's highest rates of per-capita soup consumption, Campbell has been focusing its efforts on the Guangdong province and Shanghai. In fiscal 2013, Campbell expanded its access to manufacturing and distribution capabilities in Mexico for its beverages, soups, broths, and sauces after it signed a deal with Grupo Jumex and Conservas La Costeñato .
It has also taken steps to close and/or sell unproductive operations. In fiscal 2014, the company and its joint venture partner Swire Pacific Limited restructured manufacturing and streamline operations for the joint venture's soup and broth business in China, closing its soup production plant in Xiamen. That year Campbell also closed plants in Aiken, South Carolina, and Villagran, Mexico. In fiscal 2013 it sold its European simple meals business, closing facilities in Belgium, France, Germany, and Sweden.
Mergers and Acquisitions
In June 2015, Campbells continued its plan to diversify beyond soup and into "faster-growing categories" after buying salsa maker Garden Fresh Gourmet for $231 million. Garden Fresh Gourmet, which is also a top maker of hummus, dips, and tortilla chips, generated $100 million in net sales in 2014.
In August 2013, the soup giant acquired the Denmark-based baked snack maker Kelsen Group for $325 million.
In June 2013 it bought Plum Organics, one of the top brands of organic baby food in the US. The company makes organic foods and snacks for babies, toddlers, and children, a fast-growing premium food category. The company hoped the purchase would bring a new generation of consumers to Campbell.
The descendants of John Dorrance, the inventor of condensed soup and founder of the company, own approximately 42% of Campbell.