In an industry—consumer packaged goods and food & beverage—that arguably is changing more than most due to consumer demands, Denise Morrison became a dedicated change agent during her tenure as president and CEO for the Campbell Soup Company. She actively sought to transform the stodgy old CPG player and its brands from the start of her tenure in 2011.
Denise Morrison, President and Chief Executive Officer (CEO) and a Director, has chosen to retire effective today. Keith R. McLoughlin has been named interim CEO.https://t.co/XJrGHdZ2oT pic.twitter.com/pNIxsEAwd0
— Campbell Soup Co (@CampbellSoupCo) May 18, 2018
But even her efforts weren’t enough, and so the company’s quarterly earnings report on Friday announced that Morrison was immediately stepping down, CSC with a board member stepping in as temporary CEO, promising quick course-correcting action.
If only it were that easy in a worldwide food and beverage business that has been roiled by global competition, highly successful (and disruptive) startups and a revolutionary shift in consumer tastes represented by many millennials and increasingly health-conscious older consumers as well.
The apparent failure of the 64-year-old Morrison had nothing to do with her gender or age, just as her initial success didn’t, either. True, her “retirement” from Campbell further reduces the number of female chiefs of Fortune 500 companies in the wake of some other notable departures this past year, but Morrison’s difficulties were inherent in the role and would have challenged anyone looking to turn around one of America’s most iconic brands.
Unfortunately, Morrison is being made into something of a scapegoat for not navigating these sea changes quickly or successfully enough. Interim CEO Keith McLoughlin, in a quarterly earnings call with Wall Street analysts on Friday, blamed poor execution by Morrison that was detailed in what remains the most important statistic for the company: soup sales. They were down by 1.9% over the last year, while rival brands were up by 3.8% and private-label soup sales rose by 11%.
— Campbell Soup Co (@CampbellSoupCo) May 18, 2018
“We must take a fresh look… with urgency,” McLoughlin said. “Everything is on the table… there are no sacred cows.” The problem for Campbell’s is that approach sounds a lot like the one taken by Morrison when she rose to the CEO job seven years ago after spending eight years at the company and a total of 30 in the food business.
Morrison moved with dispatch, especially relative to a CPG industry where many other CEOs were asleep at the switch by comparison. She tried everything to get millennials interested in soup, introducing new flavors, new packaging and simpler ingredient lists—but they’ve basically yawned at all these attempts by the soup icon to figure out what they want.
Morrison even instituted a Generation Y-friendly corporate slogan, “Real food that matters for life’s moments” and a new tagline: “Made for real, real life.” Many millennial consumers, it seems, would just as soon make or buy raw bone broth and add fresh soup ingredients themselves rather than have Campbell do it for them at the factory.
Morrison also used acquisitions to diversify a brand and product portfolio that largely consisted of processed soups, V8 juices, Prego pasta sauce and Pepperidge Farm snacks. Morrison tacked heavily in the direction of better-for-you and fresh foods by acquiring Bolthouse Farms, the vegetable and juice brand; Garden Fresh salsa and hummus; Pacific Foods, an organic soup company; and Plum Organics baby and toddler food. In step with the times, she launched an investment fund for Campbell to work with innovative startups and smaller brands.
But none of it was enough for antsy investors and board members. Part of the problem was Morrison’s timing: She bought Bolthouse just as many young mothers, athletes and other target customers were beginning to question the sugar content of all juices and favor toward bottled waters.
Yet another problem for Morrison was that under her, Campbell didn’t do a very good job of integrating all of these acquisitions into a seamless company, neither for the benefit of the acquired brands nor for the broader benefit of Campbell’s corporate brand.
Campbell was forced to write down the value of the Bolthouse and Garden Fresh acquisitions by hundreds of millions of dollars over the last few years, blaming issues such as drought in California and distribution challenges with Garden Fresh. But clearly there was a problem of cultural fit between Campbell and the startups—in comparison with how Coca-Cola, for example, was able to integrate Honest Tea or how Unilever has integrated the myriad startups it has recently acquired.
“Denise did a very good job of rallying the troops to understand what the challenges were that were before the company, and she had a very solid understanding of what Campbell Soup needed to do in order to compete in today’s environment,” Ken Harris, managing director of Cadent, a major CPG brand consulting firm, told brandchannel. “The reality is that some of those efforts fell short, and you can’t have six quarters of sub-par performance and expect that people will continue to be patient—for anyone. It’s not really about Denise.”
Toward the end, Morrison swung from one end of the freshness spectrum to the other with her acquisition strategy, acquiring the Snyder’s-Lance salty-snack business for $6 billion in Campbell’s biggest-ever deal. Now her successor will have to deal with whether stocking up on snacks will help the struggling giant any more than fresh food proved to do.
As Harris commented, “Change is hard, and initiating change may be the most difficult thing to do. Paying it off with results is the only thing that is sustainable, and whoever inherits the CEO role at this point will have a platform that is better positioned today than it was when Denise took over.”
And then there’s the issue of shrinking representation of women in the C-Suite. As Fortune editor Alan Murray commented about the new Fortune 500 report released today, “With Denise Morrison stepping down from the top spot at Campbell’s, only 24 companies on the list are headed by women—whose ascent to the top spots of American business has clearly stalled.”