Campbell Soup Is Hurting From Consumer Paradigm Shift

By Sam Lewis

Soup maker is undergoing a makeover to meet consumers’ demands

Camden, NJ-based Campbell Soup has been trying to shed its image of being the supplier of canned and packaged food items sold in grocery aisles. The makeover comes in large part due to consumers leaving the canned and packaged sections of the supermarket, and venturing to grocer’s borders where fresh dairy, produce, and meat are sold.

The reshaping of the company’s image is still a work in progress, reflected in the company’s quarterly earnings report, released Tuesday, Nov 19. Campbell Soup is reporting earnings of $172 million, down 30 percent from $245 million from the same time frame of 2012. Sales of both soups and V8 beverages — two of the company’s leading products — declined, which is partially to blame for diminished profits. A recall of Plum Organics products, which Campbell Soup recently acquired, also hurt the company’s bottom line.

In an effort to reach Millenials — notorious for shunning canned foods — Campbell Soup repackaged its soups in brightly colored plastic pouches and put its dinner sauces in black packages with aesthetics meant to resemble a café’s blackboard menus. The company has yet to offer metrics on the success of the newly packaged items, but CFO Craig Owens says, “It's still pretty small. It's not a very significant portion of our soup sales.” The company has a lot of ground to make up as the prepared foods sections of grocery stores, often offering fresh hot soups, continue to grow.

In addition to refreshing the company’s core offerings, Campbell Soup is also making attempts to expand its product line. As mentioned earlier, it recently acquired Plum Organics, but also acquired Bolthouse Farms — both intended to give Campbell Soup leverage in the growing category of “fresh packaged goods.” But, Campbell Soup has already tripped over its own feet with Plum Organics products being recalled due to unexpected spoiling.

Still, Campbell Soup is not discouraged by its poor performance in fiscal Q1 and is planning adequately for the future. “We understand what happened, we know what we have to do, and we're determined to improve our performance over the next 3 quarters,” says CEO, president, and director at Campbell Soup, Denis Morrison. “Looking ahead, we expect soup consumption trends to pick up in the balance of the year as consumers respond to marketing and promotions, taste improvements, and new products as we enter the winter months.”

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