Campbell cans latest soup effort

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Campbell Soup Co. is changing the direction of its soup advertising for the fifth time in six years as new management tries to boost its ailing business.

The retooled $95 million effort will scrap last year's "We've got a soup for that" campaign in favor of a renewed focus on the marketer's classic red and white icon soups. The new campaign will concentrate on Campbell's core chicken noodle, cream of mushroom and tomato soups, which make up almost half the marketer's condensed soup sales.

RECIPE-BASED ADS

BBDO Worldwide, New York, has tested ads for a late September launch, according to a Campbell spokesman. Exact creative for those spots could not be determined at press time.

The ads will promote cream of mushroom as a recipe ingredient and tout chicken noodle soups with 20% more chicken. Also highlighted is Campbell's Classics in their ready-to-serve pop-top cans, and the nutritional value of tomato soup.

Past advertising that focused on the health benefits of lycopene in tomato soup helped stem a sales decline, a Campbell spokesman said.

The new campaign effort is being spearheaded by the leadership team formed under interim President-CEO David Johnson, which includes Marty Thrasher, president-Campbell North America; Andrew Hughson, president-U.S. soups and sauces; and Jeremy Fingerman, VP-U.S. Soup.

" `We've got a soup for that' was headed by [former President-CEO] Dale Morrison [former VP-U.S. Soup] Lisa Zakrajsek and [former President of U.S. Grocery] Mark Leckie, who decided that condensed soup was a dinosaur and decided to de-emphasize it in their marketing and product development," an executive close to the company said. As a result, last year's campaign attempted to show the breadth of Campbell's portfolio, with some spots focused on the premium jarred Simply Home line as well as on Campbell's Select and the convenient Soup to Go.

"The problem was that condensed soups are 75% to 80% of total sales and more than that in profits, and they couldn't grow the other parts fast enough to stem the huge declines on the condensed business," the executive said.

SOUP SALES DECLINE

According to DLJ Securities analyst Bill Leach, soup sales declined 15% in the company's third quarter, which ended recently. While that's not traditionally a strong period for soup sales, the numbers were far worse than expected, he said, and fourth-quarter earnings are expected to show a 50% drop.

Mr. Leckie was ousted in June 1999 and Mr. Morrison in March. Ms. Zakrajsek in June 2000 was shifted to VP-marketing services, a post she recently resigned; an executive close to the company characterized that shift as a clear message she did not have the favor of Campbell management.

In addition, Campbell recently shed about 60 people from its Camden, N.J., headquarters and its North American sales force It also lost Tim Callahan, president-beverages and Latin America, who joined ACNielsen U.S. as exec VP-client service.

The new team acknowledged that spending against the fringe businesses is one of what Mr. Johnson has called Campbell's "marketing missteps."

DLJ analyst Mr. Leach, however, was quick to point out that, "it's not really an advertising problem, it's a product problem. Their condensed soup business just isn't in step with today's consumers, and they just haven't been innovative," he said.

Rumors abound that Campbell might soon replace Mr. Johnson with Nabisco Group Holdings Corp. President-CEO Jim Kilts, who will be out of a job when Philip Morris Cos. acquires his company. That, Mr. Leach said, would be a real positive.

Y&R RETAINS CHUNKY

Campbell has retained BBDO for the bulk of its soup business--all but Chunky, which is handled by Y&R Advertising, New York--despite talks about dismissing the longtime agency when Mr. Johnson returned from retirement in March.

According to an executive close to the company, the agency was retained in part due to its strong ties to Mr. Thrasher, who recommended instead that Bernadette Murray, exec VP-senior account director and top executive on the account, be taken off, and that responsibility for the account consolidated with one creative group.

Contributing: Richard Linnett

Copyright July 2000, Crain Communications Inc.

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