Campbell Soup

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Campbell Soup, Co. Camden, N.J. - When R. David C. Macnair, Campbell Soup Co.‘s chief technical ofticer, summoned doctors and nutrinists for a preview of the company’s promismg new product, he wasn’t prepared for the gasps as he unveiled a helping of mashed potatoes. Unexpectedly, they were glowing bright green The fluorescent spuds might have been a harbinger for Campbell back in 1992, as the soup company pursued its most ambitious and secretive product in a century: a regimen of nutrient-fortified meals promising therapeutic benefits and called Intelligent Quisine. IQ would go beyond the increasingly popular low-fat products of the time, and Campbell backed its therapeutic claims with clinical trials at eight universities. Several medical experts and groups heralded the IQ line as a breakthrough: the first foods scientifically proven to lower high levels of cholesterol, blood sugar and blood pressure. The testimonials were one reward for the seven years and $55 million Campbell would eventually invest in developing IQ? but a bigger payoff was expected in the marketplace. As the company began selling 41 breakfasts, lunches, dinners and snacks in a market test in Ohio in January 1997, then-Chief Executive David W. Johnson told analysts that Campbell foresaw $200 million in annual sales \vhen the brand went nationwide. But after 15 months in Ohio, Campbell yanked the line last March, surrendering to problems outside and within the company. While many test subjects enjoyed the meals and added their testimonials to those of the experts, others found the IQ line too expensive or lacking the variety. In the end, sales fell short of expectations. Inside Campbell, Mr. Johnson’s enthusiasm collided with the skepticism of his eventual successor, Dale Morrison. An in hindsight, some observers suggest that Campbell may have pulled out too soon, noting that IQ’s therapeutic side made it analogous to a new drug, which can take more than two years to garner the support it needs from the medical establishment. Campbell’s own postmortem suggests the company may have bitten off more than it could chew. Spokesman Michael Kilpatric says, “Business results in Ohio didn’t meet expectations and would have required more health-care resources. and that is not a core competency of Campbell.” After its bold plunge into innovation, the big conservative company, built on one main product, went back to its breadwinner. Mr. Kilpatric says Campbell ma& a decision to exit the frozen-food business and “put our resources behind soup.”

Did Campbell quit too soon.7 Other companies continue to regard so-called functional foods - snacks and meals with medical benefits - as the next blockbuster to snap stagnant sales in the $650 billion food industry, which has been suffering from a 0 shortage of innovative hits. Kellog,, Co., which spent $75 million to open a functionalfood lab, is expected to launch new products nearly next year. ConAgra Inc. and Nestle SA are also developing what the industry has dubbed “nutraceuticals.” By some estimates, sales of functional foods could reach $24 billion a year by 2001, as the huge baby-boomer population enters old age. Campbell began casting about for a cutting edge health food in 1990. At the time, the company was still king of soup, with more than three-quarters of the American market. But soup consumption had stalled, leaving the company worried about where future growth would come from just as rivals were digging into hot a hot new market. ConAgra’s Healthy Choice and H.J. Heinz & Co.‘s Weight Watchers frozen meals were taking off as Americans became more aware of the link between the diet and disease. So Campbell researchers began working to push the envelope, with foods that could help people manage or prevent ailments such as diabetes and cardiovascular disease. Campbell saw a demographic gold mine. About 58 million Americans have high-blood pressure and other forms of cardiovascular disease, America’s No. 1...
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