The roughly $200 million increase for 2002 will include a renewed emphasis on advertising, said President-CEO Douglas Conant.
"Regrettably, cutting advertising leads to a circle of doom. It happened to us, and now we have to restore support to our franchises and reconnect to consumers once again," he said in a presentation to analysts.
Company's biggest renewal
As part of the renewal effort, which Mr. Connant said was the largest-ever undertaken in Campbell history, ad spending against Chunky soups will double over the next three years, while the 75-variety Red & White condensed soup line will also get an increase above the 38% hike it saw during the past year, Mr. Conant said.
Ads for Red & White and the ready-to-serve Select line will continue to be touted under the M'm! M'm!Good! banner. Advertising for Chunky is with WPP Group's Y&R Advertising, New York, while Omnicom Group's BBDO Worldwide, New York, handles Red & White and Select brands.
Taylor Nelson Sofres' CMR reports that Campbell spent $20 million in measured media against Chunky, and an additional $100 million on its other Campbell soup brands in 2000.
Improvements, new products
Mr. Conant said the whole portfolio of soups will benefit from product improvements during the next three years, including the addition of easy-open lids for the condensed line as well as new products such as microwaveable single-serving soups with easy-open lids called Campbell's Soup to Sip.
The plan also calls for increasing marketing investment behind non-soup brands including Pepperidge Farm, Godiva, Pace, Prego and V-8.
As a result of the increased marketing investment, as well as an increase of $100 million in capital spending for product improvements across the portfolio in 2002, Campbell expects earnings per share for fiscal 2002 to be reduced 20%. Campbell's stock price fell nearly 3% in the wake of the announcement.