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ANOTHER HELPING FOR CAMPBELL;SAVINGS FROM RESTRUCTURING TO FUND AD BUDGET BOOST

By Published on .

A portion of the $200 million saved from the restructuring plan Campbell Soup Co. disclosed last week will go to a "substantial increase" in worldwide advertising spending, the marketer said.

"The centerpiece of this strategic growth plan is brand-building. We will drive consumer appeal to new heights by investing even more" in marketing, said David Johnson, CEO-chairman and president.

650 JOBS CUT

The cost-cutting program, first reported in Advertising Age last month (AA, Aug. 5), calls for eliminating 650 jobs across its North American operations, including 175 corporate positions-some in marketing, advertising and pr.

In addition, plans call for eliminating several unidentified "non-strategic businesses with sales of $500 million within two years" and, nearer term, to close, sell or scale back some factories.

Campbell said it would increase by 30% the estimated $175 million it spent on advertising this year. That's on top of the 30% soup-spending hike announced earlier this year to support two new lines, including 98% fat-free cream varieties and Healthy Request Creative Chef soups for cooking.

In addition to introducing those soups, Campbell advertising is expected to focus on what the company is calling "icons," including chicken noodle, tomato and cream of mushroom soups; and focusing on product improvements such as adding 33% more meat to its chicken soups.

Campbell said increased support would also go to Prego spaghetti sauce, V-8 juice, and its Pepperidge Farm bakery line-particularly behind Milano cookies and Goldfish snacks-as well as new products.

BBDO MAIN SOUP AGENCY

BBDO Worldwide, New York, is the major soup agency, along with FCB/Leber Katz Partners, which also handles V-8 and Prego. Saatchi & Saatchi Advertising is the Pepperidge Farm agency.

Among the new products to receive support are Swanson Broth in resealable cartons; a new line of supermarket-distributed frozen soups; and the test of a new "nutritionally balanced" food program created by an in-house operating group called the Center for Nutrition & Wellness. Campbell has declined to discuss that venture further (AA, Aug. 26).

While the big spending push is mainly domestic, the marketer also made good on its promise toCampbell to hike ads strengthen global operations, seen by the investment community as comparatively small relative to other food companies.

Campbell moved to rectify that by buying Germany's leading canned soup marketer, Erasco Group of Cos., for $210 million from Grand Metropolitan. Erasco gives Campbell the leading share in soup and shelf-stable meals.

GERMANS EAT SOUP

Marty Thrasher, president of Campbell's international grocery division, said Germans "eat six times more soup per capita than U.S. consumers. ...We see significant opportunity to grow Germany's approximately $1 billion commercial soup category."

Campbell said it will keep Erasco's agency, FCB Hamburg, the German counterpart of a core domestic shop.

Also on the international front, Campbell has started a joint venture with J. Osawa Ltd., a Japanese company, to open 33 Godiva retail stores in that country. And Campbell has acquired Kettle Chip Co., an Australian snack company; Cheong Chan, a manufacturing facility in Malaysia; and Homepride Cooking Sauces in the U.K.

RETURN ON INVESTMENT KEY

Campbell's overall goal with the lean-and-mean restructuring is to propel it into the financial ranks of the best-regarded companies for return-on-investment beyond its peer food group.

"We are poised for breaking away from our competitors in the food industry," Mr. Johnson said. "This strategic growth plan is designed to vault our company into the ranks of the world's renowned consumer goods companies in terms of financial profile and market multiples."

Contributing: Dagmar Mussey, Duesseldorf

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