Campbell Soup Company
December 11, 2008
Dr. Jacqueline Garner
Business description & brief history
Campbell Soup Company is a global manufacturer of high quality soup, beverage, confectionery, and prepared food products. The company is 136 years old, counts about 22,500 employees and represents close to $8 billion in annual sales. Its portfolio is very broad and now includes more than 20 market-leading brands. Campbell’s North American portfolio includes powerful retail and food service brands, including: Campbell's, Pace, Prego, Swanson, StockPot, V8, and Pepperidge Farm. Each of these brands is #1 or #2 in its category or segment. The North American business represents $5.2 billion in sales, with operations in the United States, Canada, Mexico, and Latin America. Campbell’s also has an international presence and its portfolio features leading brands in Europe and Asia Pacific. Campbell owns a variety of soup and sauce brands, including Erasco soups in Germany and Liebig soups in France. The company also owns dry soup and sauce businesses in Europe under the Royco, D&L, Heisse Tasse, and Blå Band brands. In Asia Pacific Campbell owns the Arnott's brand of biscuits and snacks. Their international business represents $1.5 billion in sales. What is today an important corporation started more than 130 years ago, when a young chemist named Dr. John T. Dorrance made his mark on history with the invention of condensed soup. He created an icon and laid the foundation for Campbell Soup Company, one of the most beloved food companies of all time. Since then, Campbell has branched into prepared foods and sauces, cookies, biscuits, and beverages, building iconic brands around the world.
Campbell Soup has large household penetration in the North American market; with 85% of households purchasing Campbell soups, the company holds a strong position on the market. Campbell’s has made inroads into international markets, and continues to move forward into developing nations such as Russia and China, these two countries account for 50% of the global soup market. They have had a few stumbles, and seem to recognize and course correct quickly as identified by the sales of brand lines abroad. However, Campbell also faces competitors such as General Mills Co (Progresso Soups) Kraft Inc. and Heinz H. J. Co. Most of the Campbell competitors are multi-billion dollar food companies and what mainly differentiates them from Campbell is their more international presence. For instance, Kraft makes $24 billion in North America but also $13 billion in the rest of the world. (Making a 1/3 ratio in comparison to a 1/5 ratio for Campbell). These are all also highly diversified companies.
In addition of these big global players, Campbell also competes with small local producers or distributors on specific markets segments. They have a rare position of playing in a marketplace at both ends of the spectrum and appearing as both a global player and a local company.
Discussion of Recent Developments
In opposition to the big food companies, diversification does not seem to be as appealing to Campbell who recently preferred to focus on their core business: soups. The President and CEO Douglas R. Conant recently stated “as a more focused company, we are ready to compete and win.” We saw the consequences of this new strategy when Campbell decided in 2007 to divest their chocolate business: Godiva. Similarly, the company also chose to leave aside the mayonnaise brand “Lesieur” marketed in France.
Additionally in 2008 the company reported charges for restructuring related changes in brands and plant assets in both Australia and Canada. The company has announced initiatives to focus on improving operational efficiencies and enhancing long-term profitability; not surprising in this uncertain economic time.
In line with these...