Campbell’s Soup has come a long way from the simple days when its iconic slogan “M’m M’m Good!” meant that sales were as healthy as a steaming bowl of tomato soup. Today’s internal catchphrase for the company is “Real Food That Matters for Life’s Moments.” And therein lies a new tale.
Under CEO Denise Morrison, who is now entering her fourth year, Campbell has tried mightily to resurrect sales of its staple product: Mainstream soups. The company has tried taking salt out and then putting it back in. It has tried riotous new flavors and uncommon packaging to attract millennials who haven’t grown up on soup. It has called the stuff “Go Soup!” and come up with recipe apps for soup. Campbell also has tried various pricing and other promotional gambits.
But even the occasional wins in the soup category have turned out to be chimeras. For example, for the quarter that ended Nov. 2, Campbell’s U.S. soup sales were up by 6 percent—just the second time that has happened in 15 months. But the gain was a false one, BuzzFeed reported, in that it occurred mainly because big retailers including Walmart made holiday orders earlier than usual.[more]
So now, Morrison and the rest of her brain trust seem to have accepted the long-term reality about soup: It’s gone cold.
U.S. soup sales have been flat for the length of her tenure, and there are macroeconomic factors and lifestyle changes among Americans which suggest that growth will continue to defy the category.
It’s been feeling the brunt as consumer tastes shift, with a shrinking middle class that is the main audience for Campbell’s Soup as well as a shift among many moms toward more organic and fresh-food choices and greater demand for transparency in how food is produced and prepared—which, for a consumer packaged goods item with a supply chain as complex as soup, is quite a challenge.
Morrison, in an interview with the Wall Street Journal, didn’t really want to talk about soup, but instead, talked about what “Real Food That Matters for Life’s Moments” means in the context of how Campbell acts as a company—how it thinks about the business and what it means for consumers.
As BuzzFeed noted, “Soup is a vital product and an economic engine for us,” Morris said, “but we are definitely more than just soup.” In fact, it was noted that Morrison didn’t outright dismiss the notion of dropping “soup” from the company’s name in the near future.
— Campbell Soup Co (@CampbellSoupCo) December 8, 2014
Even while the company presses ahead with a new line of organic soups in the new year, Campbell these days is trying to grow its business beyond soup.
That is why the company has poured $2.2 billion into buying companies that have absolutely nothing to do with soup, including Bolthouse Farm and Plum Organics, and is trying to create product development and marketing synergies with its newly acquired health food engines. That’s one reason Plum will be coming out with its own soup next year.
Morrison also has poured lots of resources into reinvigorating the V8 juice franchise, and has had Pepperidge Farm overhauling its own product line with healthier varieties as well as more flavor-intense ones.
“She is working to reignite the company in dominant categories, as well as enhancing other areas of the business,” Erin Lash, Morningstar analyst, told BuzzFeed. So far, however, “results have been slow.”
And some investors are agitating for a takeover play for Campbell. But Morrison, who’s also thinking big picture (including how digital and health will converge) views the company’s bowl as half-full rather than half-empty, and is determined to press ahead.