Campbell Buys Wolfgang Puck Soups

Company Aims for Organic, Gourmet Segments

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CHICAGO (AdAge.com) -- The king of condensed soups is taking a big step upscale by acquiring the Wolfgang Puck soup business from Country Gourmet Foods for an undisclosed sum. Campbell has also entered into a licensing agreement with Wolfgang Puck Worldwide for the use of the Puck brand to market soup, stock and broth products throughout North America.
The move not only allies Campbell with a celebrated chef but brings it further into the growing realm of organics.
The move not only allies Campbell with a celebrated chef but brings it further into the growing realm of organics.

The move not only allies Campbell with a celebrated chef but brings it further into the growing realm of organics; Mr. Puck has been vocal about his desire to use organic ingredients at all of his restaurants and in all of his packaged-food products.

Time for organic growth
"As the world's leading soup company, Campbell must expand its role in the organic segment of the market," Campbell CEO Douglas R. Conant said in a statement, leaving the door open to further acquisitions. "Combining Wolfgang's brand and reputation with Campbell's distribution and marketing capabilities creates the opportunity for significant growth."

The company said that organic wet-soup sales were $150 million in the U.S. last year, up 23% since 2003. Mr. Puck's soups aren't expected to have a material impact the company's bottom line, however, until after fiscal 2009.

The chef's designer canned-soup line, introduced in 1997, has annual sales of about $22 million, though the entire line has yet to go organic.
Wolfgang Puck
Wolfgang Puck Credit: Lisa Romerein

"What makes Wolfgang Puck attractive to Campbell is its association with gourmet, chef-inspired recipes and its strong and growing presence in the organic and natural segment of the market," said Denise Morrison, president-Campbell North America Soup, Sauces and Beverages. "In addition to its organic and natural credentials, Wolfgang Puck products are positioned as a high-quality premium brand, with the potential to be extended into premium soup offerings."

Access to Whole Foods
Campbell has made a few steps into the organic market, with Campbell's tomato juice, V8 vegetable juice, Prego pasta sauce, Pace salsa and varieties of Swanson broth. But the Puck business gives it a greater entre into Whole Foods, where the chef's products enjoy a healthy amount of shelf space.

In recent years, Campbell has focused on reducing the sodium levels in its soups. Its red-and-white label soups with 25% less salt topped Information Resources Inc.'s list of the hottest new supermarket products for 2007.

But the company has taken grief for its paltry ad budget in recent years, and boosted spending nearly 30% in 2007 to $412 million from $316 million in 2006, according to TNS Media Intelligence. Executives said earlier this year that further escalation would be unlikely in 2008. Campbell's creative agency is Y&R New York.
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