The iconic “soup” will soon be dropped from Campbell’s brand name under a new company initiative, as the food and beverage company redefines its financial objectives.
Following shareholder approval at an upcoming November meeting, Campbell Soup Co. will be rebranded as The Campbell’s Company. This change seeks to better reflect the company’s diverse product offerings, although soup will still remain a core part of its portfolio.
Last year, Nasdaq-listed Campbell made significant changes to its product lineup by acquiring Sovos Brands. This acquisition, approved by regulatory bodies in March, included popular items like Rao’s Italian sauces, ready meals, and frozen pizzas. In recent years, the company has also divested from other brands, such as Emerald Nuts, Plum Organics baby food, and Arnott’s snacks.
At a recent investor day event on September 10, Campbell revealed a new set of long-term growth targets. The company aims for organic growth of 2-3%, which is an increase from the previous target of around 2%. Additionally, Campbell is looking at adjusted EBIT growth of 4-6% and adjusted EPS increases of 7-9%.
According to results released for the 2024 fiscal year, Campbell experienced a 1% decline in organic growth, reaching $9.6 billion. However, adjusted EBIT rose by 6% to $1.5 billion, while adjusted EPS increased by 3%, amounting to $3.08.
President and CEO Mark Clouse emphasized, “Over the past five years, we have embarked on a transformative journey to redefine our company. Our focused strategy has positioned us well and laid the groundwork for consistent results.”
Looking ahead, Campbell aims to leverage its transformed product portfolio and engaged organizational culture to set high performance standards within the food and drink business.
Within its growth models, Campbell expects a modest organic growth of 3-4% in its snacks segment and a more subdued growth of 1-2% in the meals and beverages division, which contains the Sovos Brands offerings. The company envisions sustainable growth supported by a $250 million cost-savings program, set to span through the 2028 financial year, allowing reinvestment into the business.
CFO Carrie Anderson expressed optimism, stating, “With a refreshed long-term algorithm, we have a clear roadmap for multi-year top- and bottom-line expansion. Our investor proposition remains strong, as we generate internal cash flow and explore multiple avenues for shareholder value creation.”
Impressively, Campbell noted that 84% of net sales for fiscal 2024, along with 95% of operating income, were derived from 16 prominent “leadership brands,” with 3% attributed to product innovation. The company identified three billion-dollar brands: Goldfish, Campbell’s Soup, and Pepperidge Farm, closely followed by Rao’s sauces, which contribute $900 million.
In terms of operational efficiency, Campbell forecasts an increase in the snacks operating margin from 15% in fiscal 2024 to approximately 17% by the 2027 financial year. Meanwhile, meals and beverages margins are targeted to rise from 17.3% to around 19%.
Analyst Alexia Howard from AllianceBernstein has shown a favorable view of Campbell’s margin aspirations. She noted that the acquisition of Sovos is likely to facilitate new growth opportunities, with expected mid-to-high-single-digit increases, mainly within sauces and complementary categories.
For fiscal 2025, Campbell anticipated organic net sales growth within a range of 0-2%, an adjusted EBIT of 9-11%, and adjusted EPS increase of 1-4%. Clouse concluded, “We have the top team, an impressive portfolio of brands, a strong execution track record, and a commitment to enhancing our legacy of trust, making us well-positioned to become the most dependable company in food.”
It is significant to highlight that soup has been part of the Campbell name since 1922, with the company’s origins dating back to 1869 as Anderson and Campbell. Clouse underscored this rebranding as a natural evolution reflecting the complete breadth of the company’s offerings.
This strategic rebranding and revised financial goals indicate a shift within the food and beverage industry trends, aligning with current consumer demands and market dynamics. For those in the food and drink sector, staying abreast of these changes can enhance understanding of evolving consumer trends and industry trajectories.
