There was a time when the biggest problem the Campbell’s company had was this terrifying, shape-shifting snowman-child that subsisted only on chicken noodle soup.
Those were the days.
Reuters has reported that Campbell’s is facing pressure from some of its investors to make some big changes in an effort to right the course of a company that’s been slipping for some time. One place they’re starting is in putting two business units up for sale, which – combined – comprise a billion dollars in annual sales.
One of the units on the chopping block is Campbell Fresh, which is comprised of products like Bolthouse Farms and Garden Fresh Gourmet, acquisitions the company made around the time that many companies were jumping on the fresh food bandwagon.
Analysts say Millennials were shying away from Campbell’s shelf-stable canned soups and packaged cookies like Pepperidge Farms, but the route the company took to combat this – acquisitions in the booming– brought volatility into the business they hadn’t seen before, especially as bad weather pounded necessary crops over the past few years.
The other problem was that Campbell’s added these lines as their competitors were also jumping into the fresh food game, leaving no clear differentiating result.
But these aren’t the only issues plaguing the company.says aluminum tariffs and super low prices due to the current “grocery wars” have added to their list of challenges and one hedge fund with a stake in Campbell’s says “the only justifiable outcome” of this whole mess is to sell the entire company outright. Reuters says by selling the fresh foods business, along with the international business, Campbell’s could be streamlining itself to make the company more attractive to a potential buyer.
For now, its CEO Keith McLoughlin says key snack brands like “Goldfish, Pepperidge Farm cookies, Snyders … and Kettle chips will drive about 70% of the company's growth.” No mention of soup, in fact – a category that continues to plummet for Campbell. Without sales from recently acquired Pacific Foods, maker of vegetarian and organic soups, Campbell’s soup sales would have been down 14 percent in the second quarter.