Campbell flagship suffers sales slide

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Frustrated with its inability to even stabilize condensed soup sales-its largest business-Campbell Soup Co. will launch a more personalized ad campaign, a slew of "best-ever" vegetable soups and a range of in-store efforts. But industry observers will be eyeing the moves with more than a little skepticism.

During its recent fourth quarter and fiscal 2002 earnings call, CEO Doug Conant admitted that even the supposed transformational marketing increases of 20% "had limited impact" on condensed soup sales this past year. The business, which makes up roughly 35% of Campbell's profits, fell 5% in dollar sales for the 52 weeks ended Aug. 11, 2002, according to Information Resources Inc. Those results likely prompted the sudden resignation recently, before the crucial fall/winter sales season, of North American soup unit head Andrew Hughson.

"Every year they have a new campaign because the one last year didn't work, and nothing has helped [condensed] soup grow," said Banc of America Securities analyst Bill Leach.

That said, Campbell has no choice but to try. Even though its ready-to-serve brands Chunky and Campbell's Select both grew upwards of 11% last year, those still add up to just 15% of profits-less than half that of its classic red and white brands.

The plan for fiscal year 2003, according to VP-U.S. Soup Jeremy Fingerman, calls for a combination of new product news, advertising that makes a stronger connection with consumers and a lot of investment at the store level, three dimensions that have not been deployed simultaneously over the past couple of years, he said.

While he acknowledged that the continual change of message-seven campaigns in seven years during the late `90s-"may have contributed to consumer confusion about the brand," Mr. Fingerman said that "creative is an important element, but not fully responsible for what's happened to the business."

Last year, for example, the core soup season lacked any new products from the condensed business. To change that, this year Campbell will launch 10 vegetable soups featuring the much-anticipated product-improving technology that allows for firmer, brighter vegetables and more space for chunky ingredients. Analysts who recently tasted the soups were not impressed, however. "I couldn't discern a difference, and the guy next to me summed it up by saying, `It's the same old ... soup,'" Mr. Leach said.

This December, Campbell will advertise vegetable soups for the first time in years with spots carrying the same "Campbell's & You" theme that kicks off this week for varieties including classic Tomato and Chicken Noodle, Swanson broths and new creamier Campbell's cream soups. The TV and print effort, from Omnicom Group's BBDO Worldwide, New York, carries the heritage `M'm! M'm! Good!' tagline for consistency, but aims to more directly connect with heavy users through scrapbook-like scenes of moms using the soups in their everyday lives.

"Significant research we conducted this past year reminded us of the connection people feel for Campbell's and condensed soup," Mr. Fingerman said. Moms narrate, introducing family members "to bring it back to how you're living your life today," he said.

In-store, Campbell will also aim to better connect with consumers. with simplified signage and shelving configurations. In addition, Campbell will invest more heavily in themed in-store promotions, among them a joint effort with Kraft Foods this fall that pairs Campbell soups with Kraft's cheese and Oscar Mayer sandwich ingredients in newspaper inserts and in-store displays.

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