The soup wars are boiling over into the courtroom.
Campbell Soup Co. has filed a lawsuit in a bid to block one of its executives from taking a top marketing post at archrival Pillsbury Co.
The executive, VP-Global Advertising and Promotion Robert Desatnick, was offered the job of chief marketing officer at Pillsbury. But Campbell, the $6 billion soup king, filed suit in U.S. District Court in Camden, N.J.
Pillsbury, a $4 billion unit of Diageo, is believed to have countersued.
Campbell confirmed it filed the suit April 15 to "seek to enforce our non-compete agreement." Mr. Desatnick, reached at home, declined comment, as did Pillsbury officials.
Campbell is said to have expected the departure of Mr. Desatnick. Last fall, he was passed over for the position of VP-global business development, a job filled instead by former Kraft executive Tim Callahan. But Campbell was said to be upset Mr. Desatnick planned to join the company that markets its closest competitor, Progresso soup.
"There were four companies Campbell considered totally taboo," said a former Campbell executive. "Heinz, CPC, ConAgra and Pillsbury."
At Pillsbury, Mr. Desatnick's responsibilities would presumably extend beyond Progresso to include refrigerated dough, Green Giant frozen food and Haagen-Dazs ice cream, categories in which Campbell does not compete. The food giants do cross swords in another arena, with Pillsbury's Old El Paso Mexican foods up against Campbell's Pace line of Mexican sauces.
Progresso and Campbell are fierce rivals. Progresso markets ready-to-serve soups, growing at a much faster clip than condensed soups, which are Campbell's main strength. That said, the share gap between the competitors still yawns. Progresso holds only about an 8% volume share of the wet soup category, compared to Campbell's 75%, according to recent analyst estimates.
SECOND TRIP TO COURT
The lawsuit marks the second time in recent years that Campbell has taken legal action to stop an executive from jumping ship to a rival. In what was at the time a highly publicized and unusual move, the company in late 1996 sued to halt the head of its U.S. soup unit, Dan O'Neill, from joining H.J. Heinz Co., saying it feared the loss of trade secrets.
That suit, heard in the same court that now has before it the new filing, was settled in February 1997 when Heinz agreed to temporarily keep Mr. O'Neill away from its soup business. Instead, he was given responsibility for tuna and pet food. Heinz's victory was short-lived, however; last month, Mr. O'Neill departed for Molson Breweries in Canada.
Copyright May 1999, Crain Communications Inc.