Campbell struggles to keep soup crown
Soup is all but forgotten as a meal choice, even though Americans have plenty of cans in their pantries. With video.
The stock price has stumbled over the past year. Sales have fallen in eight of the past 10 quarters. Profit is down from a year ago, and the company has lowered its full-year forecast. The chief executive is leaving.
Soup doesn't sell that well anymore. Americans have all kinds of choices for quick meals at home, leaving the can of soup -- once the go-to choice for lunch in a jiffy -- in the dust. People still buy soup, but they just forget to eat it, so the cans are relegated to the back of the pantry.
Post continues after this video about Campbell's troubles:
Campbell soups are in 85% of homes, with an average of six cans per home, Campbell's chief executive, Doug Conant, told The Wall Street Journal. But "people forget it is in the pantry," he added. No wonder sales are down.
There's more to Campbell's than soup, but that might not be a good thing. The company also owns Pepperidge Farm foods, Prego sauce and V8 drinks -- good products but ones that are generally more expensive. Shoppers can sometimes find better deals from General Mills (GIS), which owns the Progresso soup line, Heinz (HNZ), Kraft (KFT) or a store brand.
Campbell shares were at about $35.10 Monday, down slightly from Friday's close. Shares fell about 7% in the past year before bottoming out last month.
"We are having a challenging year," Conant told the Journal. Conant will leave the company this summer, and the current chief operating officer will take the reins. But before he departs, he has put two new recovery strategies in place:
More advertising. The company lowered prices to stay competitive last year, but that didn't really help sales volume. Now Conant says Campbell is going to move away from discounting in favor of more innovation and advertising. "Except for a blizzard, advertising is the next best way to get people to think of soup again," he said.
New products. Campbell's will debut "Slow Kettle" soups in late summer, he told the Journal. They are minimally processed with five flavors such as Southwest-style chicken chili that may interest younger buyers -- a weak point for the company.
Will that be enough to gain favor with shoppers who have forgotten soup? Americans are moving toward frozen pizza and other convenience meals, the Journal reports. It will be tough for Campbell to swim against that current, even armed with the best advertising strategy.
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