Campbell's has tried just about every which way to get Americans to eat more soup over the last three years under new CEO Denise Morrison: Aim at Millennials and Latin Americans; cut salt; add taste; try new shelf-stable packaging; hold prices steady; cut prices.
The bottom line is that none of it seems to be working all that well. The Campbell Soup Company reported that sales of its soups in channels measured by SymphonyIRI declined by more than 1 percent in the 52 weeks ended April 27 while the category as a whole declined by 0.6 percent. So not only is Campbell's seeing declining US consumption of soup but it also is losing share of that lower intake.
Morrison professed on a conference call to have a handle on the situation, but she also lowered Campbell’s sales expectations for the coming months.
“I can assure you that we are examining the same questions that you [analysts] are, and we are formulating the most effective responses,” she said.
Analysts have concluded that Americans, especially younger generations, simply aren’t that turned on by the traditional hot-soup format, as much as Campbell's and other brands have dressed it up with chunky varieties, lower-sodium versions, organic and natural soups and the zesty flavors that Campbell's introduced a couple of years ago as Go Soup, which included varieties like Creamy Red Pepper with Smoked Gouda. it even partnered with Keurig Green Mountain to bring soup varieties to K-Cups, but it’s difficult for a company with the middle name “Soup” to give up on the category.
Morrison did say that some types of soup sold OK during the period, including just-introduced “pub-inspired” Chunky, Healthy Request and Latin-inspired condensed soups. Some of those were inspired, in turn, by Campbell’s acquisition last year of Plum Organics, whose specialty has been kids’ snacks.
The CEO claimed that a huge factor in the results was “the persistence of an exceptionally challenging consumer environment” featuring American households suffering from continuing underemployment, rising costs and reductions in the food-stamp program. At the same time, however, Campbell's customers weren’t sufficiently incented by an emphasis on price discounting and other promotional activities that the brand used to try to lure them past their financial concerns.
Growth by Plum products and also by Bolthouse Farms, the vegetable-growing outfit in California that the company acquired a couple of years ago, were bright spots, Morrison said. In addition to a “spring innovation suite” of 47 new products, Bolthouse also is getting its first major investments by Campbell's in advertising the brand. “We’re pleased,” the CEO said, “with the market share volume trends and brand awareness” for Bolthouse.
But this year and in the end, Morrison will be judged by whether she has been able to move the needle on US soup purchases. She did a good job of that a couple of years ago but those gains have fizzled. “We have no illusions about the challenges that we are facing,” Morrison said, but insisted, “We have the right long-term strategy.”