$46.8B Record U.S. agency revenue in 2015
Campbell Soup Co. will launch more than 200 new products in the next 12 months as the company seeks to adjust to what CEO Denise Morrison described Monday as the "new normal" in packaged food, driven by a demand for fresh foods and more transparency.
New items include the first-ever line of Campbell-branded organic soups that will be packaged in cartons and come in six flavors like chicken tortilla and garden vegetable. And in a move to improve its struggling shelf-stable beverage business, the marketer will launch a new range of V8 flavors that seek to seize on the juicing trends with varieties such as Carrot Mango, Healthy Greens and Purple Power, which is a veggie blend with beets. New flavors coming to the classic V8 lineup include Sea Salt & Clam and Mint & Lime.
Separately, V8 will try to capitalize on the protein craze with a new line of shakes and snack bars. Ingredients will include carrots and sweet potatoes, while the shakes will use a variety of protein sources including dairy, soy, pea protein, brown rice and quinoa.
These and other new product launches come as Campbell -- like most big processed food companies -- is being squeezed by new competition from smaller premium organic and natural foods brands, as well as belt-tightening by low-income consumers. In May, Campbell lowered its net sales guidance for its 2014 fiscal year to 3% growth from the previous estimate of 4% to 5% growth after reporting disappointing results for its third quarter, which ended on April 27.
"We are in a turbulent time," Ms. Morrison said Monday at the company's annual meeting with investment analysts. "The industry has had a tough year and is struggling to deal with the winds of change from many directions."
Earlier in the current fiscal year, which ends on Aug. 3, Campbell began shifting money from advertising to support promotional programs for retailers, including giving price discounts to a wider set of stores. But the move failed to lift sales volumes as the company had hoped, it stated in May. On Monday, executives signaled Campbell would begin shifting more money back into advertising, although they did not detail by how much. Mark Alexander, president of Campbell North America, said the company would "rebalance a little bit back towards" ad spending.
Campbell, like most big food companies, was hurt earlier this year by severe winter weather that disrupted production, shipping and consumer shopping, Ms. Morrison noted. But she suggested that the food industry's struggles are more indicative of longer-term shifts in consumer preferences and priorities.
The transformation "has been building for a number of years and now appears to be at or near a tipping point," she said. "Consumers are clearly demanding greater transparency about their food," she said. "They want to understand how it's grown, produced and marketed."
Campbell's response has been to pursue the "dual mandate" strategy that Ms. Morrison began pushing when she took over as CEO in August of 2011. The approach aims to strengthen the marketer's traditional center-of-the-store core business -- including soup -- while moving into faster growing categories, such as fresh and organic foods, which has been pursued mostly through acquisitions.
The company in August plans to launch a new kids line under its Bolthouse Farms division, which was acquired in 2012 for $1.55 billion and includes fresh beverages, salad dressings and produce. The new kids-targeted products will include smoothies, "fruit tubes" and "veggie snackers" that will not contain added sugar. The target is millennial moms who have children ages 4 to 11.
The company will also seek to grow its dinner-sauce line that targets people who want a quick dinner fix but also want a hand in making the meals. A line called Campbell's Oven Sauces will join existing Slow Cooker and Skillet Sauces that have been launched during Ms. Morrison's tenure. The company will also target cooking occasions with a new product called Campbell's Soups for Easy Cooking, with varieties such as Savory Portobello Mushroom and Mexican-Style Tomato.
Meanwhile, Campbell announced that Seattle Seahawks star Richard Sherman would be the the spokesman for Chunky Soup's "Mamma's Boy" campaign, replacing Clay Matthews.