Campbell Soup Company Focuses Portfolio on Strong Potato Chips Brands

The Campbell Soup Company has recently revealed new strategic directions for the North American market, including the focus on two distinct businesses, Campbell Snacks and Campbell Meals and Beverages.

“Campbell will continue to provide consumers with great tasting, high-quality real food. Across the portfolio, the company’s brands will leverage consumer insights and trends to drive relevance, including health and well-being, snacking and convenience,” according to the company.

Each of Campbell’s brands will be managed within a focused and disciplined framework of two differentiated portfolio roles:

Drive Profitable Growth – These powerful brands will be managed to grow disproportionately relative to the categories in which they compete. These include leading brands such as Cape Cod, Goldfish, Kettle Brand, Lance, Late July, Pace, Pacific, Pepperidge Farm Farmhouse and Milano cookies, Prego and Snyder’s of Hanover. Investments in innovation and consumer engagement will enable these brands to leverage evolving consumer tastes and trends, according to Campbell.

Maximize Margin & Cash Flow – These at-scale brands will be managed to generate consistent profit and cash flow. These include leading brands such as Campbell’s soup, Pepperidge Farm fresh bakery, SpaghettiOs and V8. These brands will be managed with disciplined focus and aligned investments to support their strong market positions, to optimize operating margins and cash flow and to fulfill their equally important role in Campbell’s portfolio.

Campbell’s interim president and CEO Keith McLoughlin said: “Campbell’s board of directors considered a full slate of strategic options, including optimizing the portfolio, divesting businesses, splitting the company, and pursuing a sale. The board concluded that, at this time, the best path forward to drive shareholder value is to focus the company on two core businesses in the North American market with a proven consumer packaged goods business model.”

Campbell has engaged Goldman Sachs and Centerview Partners to commence a process to divest its Campbell International and Campbell Fresh businesses in a manner that maximizes value. Campbell International consists of Arnott’s and the Kelsen Group, along with the company’s manufacturing operations in Indonesia and Malaysia and its businesses in Hong Kong and Japan. Campbell Fresh includes Bolthouse Farms, Garden Fresh Gourmet and the company’s refrigerated soup business. Fiscal 2018 net sales of these businesses totaled approximately USD2.1bn. Proceeds from the divestitures will be used to significantly reduce debt.