Campbell Soup bets on busy American lifestyles

Forget soup. To understand this company, look at the growing desire for easy-to-make meals.

By Jonathan Berr Nov 22, 2011 1:16PM

Selling canned soup is an increasingly tough proposition for Campbell Soup (CPB), which reported a 4% decline in quarterly soup sales on Tuesday.

 

But that doesn't mean the iconic brand has given up trying to win over the hearts and minds of America's cooks. Campbell's big bet these days is on simple meals, which includes soup as well as jarred sauces and mix packets. That division boasted a decent profit increase of 8% as the company trimmed advertising expenses and raised prices.

 

Post continues below.

The change in strategy -- which is showing signs of paying off -- is easily apparent this Thanksgiving. For example, Campbell's isn't pushing soup -- even though we're well into soup season. It's mostly advertising its classic green bean casserole, which has mushroom soup as a primary ingredient.

 

American cuisine, 2011


Forget the images of chefs happily making dishes from scratch on the "Food Network." Most Americans struggle to find enough time to turn on their stoves at all. A 2010 study by the Bureau of Labor Statistics found that Americans spent about an hour each day on food preparation and clean-up. That's about enough time to prepare, eat and clean up an an omelet. Image: Parents and children eating at table © Maria Teijeiro/Digital Vision/Getty Images

According to Harry Balzer of the NPD Group, that's fine with most Americans, who view cooking as a "job." That trend is born out by his data which found in 2010 that 59% of main dishes were made from scratch or using fresh ingredients. In 1984, that figure was 72%. 

 

It seems more Americans are defrosting the frozen lasagna rather than cooking the homemade kind. "The gold standard for this generation is frozen lasagna," says Balzer.

That's why its hardly a shock that Campbell's, as well as other companies in the food industry, are spending so much time developing easy-to-make meals. That investment has begun to pay off for Campbell's, which has long struggled to turn around its faltering soup business.

 

Stock is sliding

 

Earlier this year, shares plunged after Campbell Soup slashed its earnings outlook. Competition had intensified even as the company ramped up marketing spending. The stock is down more than 8% this year.

Simple meals are an integral part of Campbell's strategy because they require the use of soup or soup mix. Many Campbell soups have recipes on them for meals, such as meatloaf made with onion soup mix. This category includes the use of ready-made sauces (Campbell's owns the Prego brand), used in easy-to-make meals, such as pasta.

Campbell's earnings for the quarter ended Oct. 30, 2011, were $265 million, or 82 cents per share, down 5% from $279 million, or 82 cents. Revenue was $2.161 billion, little changed from a year earlier. This beat analysts' forecasts for profit of 79 cents on revenue of $2.21 billion. 

 

Profit at the U.S. Simple Meals business, which includes soups, rose 8% to $260 million. The rest of Campbell's businesses showed declines with the exception of North American Foodservice*. The company reaffirmed its guidance for 2012.


Campbell, though, figures that Americans will want to spend time making a Thanksgiving meal, which costs 13% more this year to produce, judging from the recipes on its website. 

 

Keeping Americans enthused about cooking the rest of the year is the tricky part.


*An earlier version of the story failed to reflect that the North American Foodservice unit was also profitable.


Related reading:Campbell struggles to keep soup crown

Tags: CPB
3Comments
Nov 22, 2011 3:52PM
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Lower the prices. The small cans of soup that they offer today are not what we used to get when we were kids and the product in side is less than what you used to get. I can't see paying over $1.00 for something like chicken n stars when I can go buy a box of macaroni for a $1.00 and add my own broth that comes out to be less than what you charge for a small bowl of soup by the time you add the water. Lower the price and offer other items and maybe your sales would go up.
Nov 22, 2011 3:39PM
avatar
If I were in the soup business, which I have been considering someday, I would offer home cooked soup in the frozen section. I can tell you that there is a big difference in mushroom canned soup and homemade. My soups are healthy, and I make soups for cancer patients who can't hold food down after treatments. My soup is the only thing my dad could eat for months after his cancer treatments. No disregard to Campbell's, but times change and you have to get on board, and be ready when it does. Smile
Nov 22, 2011 4:35PM
avatar

more people are cooking at home now a days and from scratch, fresh.

it's key to healthy living and always has been.

frozen foods and fast foods are poison and a rip off in price.

 

ok from time to time.. but not that much.

make it yourself and use leanmeats or stick with fish and chicken and turkey

with veggies and fruit.

 

only a fool bys frozen anything...

 

frozen veggies, maybe... but fresh works best!

 

less calories and fat and no checicals or preservitives when ya do it yourself.

 

 

it's easy to cook and fun.. not a job it's a way of life and a must to learn if you don't know how.  it's not hard to read a recipe ya know?

 

try some swiss steak in brown gravy cooked in a crock pot with mashed potatoes and corn on the side...   healthy and fresh.... a real meal.

 

invest in a crock pot, it does most of the work for you.

make your own burgers on the old barbacue..

 

less calories and way better for you.

 

no more frozen poison foods!  they bloat ya!

bad chemicals to pro-long shelf life, not good for ya!

 

do it yourself.

 

fast food?  rip off in price, you get more for your buck buying from store.

 

look at some of these burgers with over 1000 calories???

unheard of!!!!

 

make it at home at it's under 400 hundred and just as big and better tasting!

 

wake up america!

 

stay active and get cooking for yourselfs!

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