One Campbell Place
Camden, New Jersey 08103-1799
Telephone: (856) 342-4800
Toll Free: (800) 257-8443
Fax: (856) 342-3878
Web site: http://www.campbellsoupcompany.com
Sales: $7.11 billion (2004)
Stock Exchanges: New York Philadelphia Swiss
Ticker Symbol: CPB
NAIC: 311422 Specialty Canning; 311330 Confectionery Manufacturing from Purchased Chocolate; 311412 Frozen Specialty Food Manufacturing; 311421 Fruit and Vegetable Canning; 311423 Dried and Dehydrated Food Manufacturing; 311812 Commercial Bakeries; 311813 Frozen Cakes, Pies, and Other Pastries Manufacturing; 311821 Cookie and Cracker Manufacturing; 311919 Other Snack Food Manufacturing; 311941 Mayonnaise, Dressing, and Other Prepared Sauce Manufacturing
Campbell Soup Company is the number one maker of soups in the world, holds the top position in that category in Europe, and dominates its home market of the United States with a commanding 69 percent share. The company divides its operations into four areas. North American soup and "away from home" products includes the flagship condensed and ready-to-serve soup lines, Swanson broths, and the firm's entire Canadian business, as well as the distribution of soups, specialty entrees, beverages, other prepared foods, and bakery products through various foodservice channels. North American sauces and beverages comprises Pace Mexican sauces, Franco-American canned pastas and gravies, V8 vegetable juices and other beverages, Campbell's tomato juice, and all of the company's operations throughout Latin America and the Caribbean region, including Mexico. The biscuit and confectionery segment is made up of three subsidiaries: Pepperidge Farm, Incorporated, which specializes in cookies, crackers, breads, and frozen bakery products under the Pepperidge Farm, Goldfish, and Milano brands; Australia-based Arnotts Ltd., maker of salty snack foods, biscuits, and crackers; and Godiva Chocolatier, Inc. Campbell's manufacturing facilities include 20 plants in the United States and another 27 overseas located in Australia, Belgium, Canada, France, Germany, Indonesia, Ireland, Malaysia, Mexico, the Netherlands, Papua New Guinea, Sweden, and the United Kingdom. The company generates about 64 percent of its sales in the United States, 15 percent in Europe, 13 percent in Australia and the Asia-Pacific region, and 8 percent in other countries.
The roots of the Campbell Soup Company can be traced back to 1860, when Abraham Anderson opened a small canning factory in Camden, New Jersey. In 1869 Philadelphia produce merchant Joseph Campbell became Anderson's partner, forming Anderson and Campbell. The company canned tomatoes, vegetables, jellies, condiments, and mincemeat. In 1876 Anderson and Campbell dissolved their partnership and Campbell bought Anderson's share of the business, changing its name to Joseph Campbell & Company. In 1882 a partnership was formed between Campbell's son-in-law, Walter S. Spackman; Campbell's nephew, Joseph S. Campbell; and Arthur Dorrance, Spackman's personal friend who brought a cash infusion to the partnership. At this time the company was renamed Joseph Campbell Preserving Company. The name was changed again in 1891, to Joseph Campbell Preserve Company. The senior Campbell maintained daily involvement in the company until his death in 1900.
In 1896 the company built a large factory in Camden and expanded its product line to include prepared meats, sauces, canned fruits, ketchup, and plum pudding. The next year Arthur Dorrance hired his nephew John Thompson Dorrance, a chemical engineer and organic chemist. By 1899 John Dorrance had successfully developed a method of canning condensed soup. This innovation helped Campbell outstrip its two soup-canning competitors. While others were still shipping heavy, uncondensed soup, Campbell was able to ship and sell its product at one-third the cost. There were five original varieties: Tomato, Consommé, Vegetable, Chicken, and Oxtail. Around this same time, Campbell introduced its famous red-and-white label for its soups. As the company began increasing the variety of soups it offered, it began canning less produce, eventually leading, in 1905, to a change in company name to Joseph Campbell Company. John Dorrance became director of the company in 1900.
Campbell's soup began finding its way into American kitchens at a time when the prepared-food industry was growing rapidly yet was still small. By 1904 the company sold 16 million cans of soup a year. That same year, in order to provide workers with something to do in the middle of the day when the soup stock was in the midst of its long simmering time, the company began making and selling Pork and Beans. Also that year, the Campbell Kids were introduced as advertising characters. Boasting 21 varieties of soup by this time, Campbell began to eye a bigger market; in 1911 Campbell began selling its products in California, thus becoming one of the first companies to serve the entire nation.
In 1910 Dorrance was made general manager of the company, and in 1914 he became president. Dorrance focused on soup and discontinued the marginal line of ketchups, preserves, and jams. In 1915 Dorrance became sole owner of Campbell when he bought out his uncle, Arthur Dorrance. A marketing genius, Dorrance boosted sales of soup by pushing the idea of using condensed soup as an ingredient in easy-to-make recipes. The first of many Campbell cookbooks, Helps for the Hostess, was published in 1916.
In 1912 Campbell began growing its own produce in an effort to standardize quality. This program was the first of an ongoing series of efforts Campbell made to grow what it processed. At that time, during the eight summer weeks in which tomatoes were harvested, the Campbell plant devoted its entire effort to the production of tomato soup and tomato juice. During World War I almost half of Campbell's sales were from these two products. Meantime, in 1915, Campbell acquired the Franco-American Food Company. In addition to being the first American soup-maker, Franco-American was also a producer of other foods. Although the use of the Franco-American brand for soups was halted, the brand continued for spaghetti and other pasta products.
In 1922 the company was incorporated as the Campbell Soup Company, centering the company on its most famous and profitable product. One year later, Arthur C. Dorrance, John Dorrance's brother, became Campbell's general manager. In 1929 Arthur C. Dorrance was made a director and vice-president of the board of directors. When John Dorrance died in 1930, Arthur C. Dorrance was elected president.
Throughout this period Campbell continued to grow. In 1929 the company opened a second major facility in Chicago. In the early 1930s Campbell opened Campbell Soup Company Ltd., in Canada, as well as Campbell's Soups Ltd., in Great Britain. In 1936 Campbell began making its own cans and in 1939 its agricultural research department was formed. On the product front, both Cream of Mushroom and Chicken Noodle soups were introduced in 1934, Campbell's Tomato Juice debuted in 1938, and Cream of Chicken hit store shelves in 1947. Campbell began backing these introductions with radio advertising in 1931, using the famous "M'm! M'm! Good!" slogan. Meantime, the company published its first full-length cookbook in 1941, titling it Easy Ways to Good Meals. In 1942 sales topped $100 million for the first time. Arthur C. Dorrance died in 1946, and James McGowen, Jr., became president. The following year Campbell began growing its own mushrooms in Prince Crossing, Illinois, and it opened its third soup plant, in Sacramento, California. In 1950 the first Campbell television commercials were broadcast.
Despite this growth, Campbell was slow to diversify. In 1948 the company acquired V-8 juice, but its first major purchase was not made until 1955, when it bought the Omaha, Nebraska-based C.A. Swanson & Sons, producers of the first complete-meal frozen entrees called TV dinners.
In the midst of this growth, W.B. Murphy was elected president, following McGowan's retirement in 1953. In 1954 Campbell took its stock public on the New York Stock Exchange and, in 1957, the company formed an international division to oversee its foreign concerns. In 1958 sales exceeded $500 million for the first time and Campbell established Campbell's Soups, S.p.A. in Italy. This venture was followed, in 1959, by the opening of subsidiaries in Mexico and Australia.
In July 2001, we launched a bold plan—and made a massive commitment—to transform Campbell Soup Company. Despite many challenges, it is now clear that we have renewed, revitalized, and reinvigorated our company and put it back on a growth track. We've rebuilt our organization, recharged our brands, and reinforced our market positions around the world. We are clearly better as a company, and ready for the next phase of our transformation: driving quality growth in everything we do.
Throughout the 1960s Campbell was conservatively managed and quite successful. In that decade the company opened two mushroom growing facilities and 11 new plants on three continents. New products continued to be rolled out, with two particularly noteworthy: Franco-American SpaghettiOs, which debuted in 1965, and Goldfish crackers, introduced by Pepperidge Farm in 1962. During the decade Campbell's growth—which underwent a slight shift in emphasis—began to include regular acquisitions in addition to internal expansion. In 1961 Campbell acquired Pepperidge Farm, Incorporated, a maker of quality baked goods, and a similar Belgian company, Biscuits Delacre. In 1965 Campbell created a foodservice division and, in 1966, began marketing EfficienC, its own brand of foodservice products through that division. Also in 1966 Campbell formed Godiva Chocolatier to distribute the Belgian-made chocolates in the United States. In 1974 the company completed a purchase of the European Godiva company and became its sole owner. Campbell created Champion Valley Farms, Inc., a pet food concern, in 1969.
During the 1970s the company's slow but steady growth continued. Campbell, which had built its fortune on Dorrance's invention of condensed soup, introduced the Chunky brand of ready-to-serve soups in 1970. This became a highly successful enterprise. In 1971, for the first time, Campbell's sales topped $1 billion. In 1972 Murphy retired and was replaced as president by Harold A. Shaub. Also that year, Swanson introduced Hungry Man meals, a line of frozen dinners with larger-than-average portions.
In 1973 Campbell acquired Pietro's Pizza Parlors, a chain based in the Pacific Northwest. This led, in 1974, to the formation of a restaurant division, and heralded Campbell's intention to add more restaurants to its growing list of subsidiaries.
In 1978 Campbell purchased Vlasic Foods, Inc., a Michigan-based producer of pickles and similar condiments, for approximately $35 million in capital stock. This acquisition gave Campbell the lead over archrival H.J. Heinz Company in the pickle-packing business. Campbell added seven small European food producing companies and three domestic operations in 1979. That same year sales topped $2 billion for the first time. In 1978 Campbell made a brief and unsuccessful foray into the Brazilian soup market.
The diversification movement started by Shaub in the early 1970s prepared the company for long-term growth. Campbell's debt remained low and the company's new products and acquisitions provided it with popular brand names in a variety of food industry sectors. Campbell realized that the key to growth in this mature market was diversification. Shaub changed a longstanding policy on new product development requiring a profit within the first year. His most notable innovation, however, was his decentralization of marketing for major product lines.
To sustain these growth-oriented policies, Campbell broke its tradition of relying on internally generated funds to finance its efforts. In June 1980 the company entered the debt market with a $100 million ten-year offering. As a cautious food producer, Campbell's earnings had always been healthy, but Shaub hoped to increase both sales and profit margins. A key reason for Shaub's determination to allow Campbell to diversify was the recognition that the market for many of these products had matured and growth had slowed.
In 1980 R. Gorden McGovern succeeded Shaub as president and Campbell made two acquisitions—Swift-Armour S.A. Argentina and a small American poultry processing plant used by Swanson for its frozen chicken dinners. Campbell's efforts in Argentina were not entirely fruitful, with much of the difficulty related to currency-transaction adjustments. Also in 1980 Campbell acquired additional bakery, pasta, and pickle operations.
In 1981 McGovern reorganized Campbell's management structure, dividing the company into two new divisions—Campbell U.S.A. and Campbell International—and about 50 business groups. This new structure was meant to foster entrepreneurship and heighten management's sensitivity to consumer opinion, long a weakness at Campbell. The company acquired Snow King Frozen Foods, a large producer of uncooked frozen specialty meats, and introduced the wildly successful Prego spaghetti sauce nationally in 1981. In 1982 Campbell acquired Mrs. Paul's Kitchens, a processor of frozen prepared seafood and vegetables. Several of the company's subsidiaries also made major purchases. Vlasic Foods acquired Win Schuler Foods, a specialty foods producer, and Pepperidge Farm completed the purchase of an apple juice processor, Costa Apple Products, with markets primarily on the East Coast. Also in 1982, Juice Bowl Products, a fruit juice processor, was acquired.
A variety of other acquisitions in the early 1980s added Annabelle's, a restaurant chain; Triangle Manufacturing, a manufacturer of physical fitness and sports-medicine products; a fresh produce distributor; a Puerto Rican canning company; and an Italian manufacturer of premium biscuits.
McGovern further increased emphasis on marketing and new product development in an effort to shift the company away from its production-oriented focus. McGovern also introduced Total Systems, a worker-oriented system designed to increase quality and efficiency that was similar to the successful worker management strategies employed by many Japanese companies.
One of McGovern's primary concerns was turning Campbell into a "market-sensitive food company." After McGovern publicly referred to some of the company's Swanson TV dinner line as "junk food" in 1982, Campbell initiated Project Fix in an effort to upgrade food quality and improve packaging of its older products. As McGovern told Business Week in 1983, one of the most important facets of his makeover was helping the company personify "somebody who is looking after [consumers'] well-being." The 1983 Triangle Manufacturing purchase and 1982 formation of a health and fitness unit were both designed to meet that goal. Campbell's involvement in frozen fish, juices, and produce were also part of the new market sensitivity urged by McGovern.
In addition, Campbell attempted to market products regionally and according to age group. The central marketing system was broken into 20 regions to allow tailoring of advertising and marketing to fit each region's peculiar demographics. For instance, the company sold spicier nacho cheese soup in Texas than in the rest of the country. The company also aimed its national brands at regional audiences, with spots featuring local celebrities and locally arranged promotions. Campbell, which reached half the nation's homes just by sponsoring the television show Lassie in the 1950s, spent 15 percent of its advertising budget in regional efforts in 1983. That figure was expected eventually to reach 50 percent.
McGovern increased Campbell's sales and earnings significantly in his first few years. His encouragement of new product development and line extensions may have been overzealous. The company introduced frozen entrees to compete with Stouffer's, dried soups to challenge Lipton, and name-brand produce such as Farm Fresh mushrooms and tomatoes, complemented by exotic varieties of mushrooms, refrigerated salads and pasta sauces, and juices. In all, Campbell introduced 334 new products in the first half of the 1980s. This included several costly mistakes, such as the 1984 failure of Pepperidge Farm's Star Wars cookies, which did not fit the brand's high-quality image. Yet spurred on by successes such as Le Menu frozen dinners, McGovern concentrated on marketing and new product development. In 1985, however, the company decided to cut back on new product gambles and McGovern reevaluated his goals and returned the company's focus to product quality and efficiency.
Throughout this period, during which it became increasingly clear that McGovern's plan was destined to fail, acquisitions and group formations continued, but at a pace reminiscent of the old Campbell. The company purchased a Belgian food producer and 20 percent of Arnotts Ltd., an Australian biscuit manufacturer, in 1985. In 1986 the company bought two more American food companies and established Campbell Enterprises to oversee non-grocery products. Meanwhile new products were gradually but steadily introduced.
In 1984 John T. Dorrance, Jr., the son of condensed soup's inventor, retired as chairman of the board and became director of the board's executive committee. He was succeeded as chairman by William S. Cashel, Jr. Dorrance and other members of his family, however, still controlled 58 percent of Campbell's stock and showed no interest in selling, keeping the company safe from takeover.
By 1987 McGovern began selling off some of Campbell's less successful ventures. In 1987 the company sold its disappointing Valley Farms pet food, Triangle physical fitness, and Juice Works beverage businesses. In 1988 the Pietro's pizza and Annabelle's restaurants were also sold, taking Campbell out of the restaurant business entirely.
However, Campbell also bought several smaller companies in 1987 and 1988 that were more compatible with its traditional lines of business. These included a French cookie maker, the Open Pit barbecue sauce line, an American olive producer, and Campbell's largest acquisition to date, Freshbake Foods Group PLC, a British producer of frozen foods. Also in 1988, Robert J. Vlasic, whose Vlasic Foods Campbell had purchased in 1978, became chairman of Campbell.
Campbell's management crisis was exacerbated by the death, in April 1989, of John Dorrance. Dorrance's 31 percent of the company's stock was split between his three children, who demonstrated an interest in preserving family control of the company. The remaining 27 percent of the family-owned stock was split among other members of the clan, some of whom (representing about 17.4 percent of the company's stock) expressed a desire to sell Campbell. Chairman Vlasic, however, had loaded the board with family members loyal to the company (six of the 15 board members were family members, including John Dorrance's three children), so a proxy battle never materialized.
McGovern—who failed in an attempt to merge the company with the Quaker Oats Company in 1989—left Campbell that same year. His final attempt to recoup Campbell's losses, a $343 million restructuring program, earned him little praise. Although sales had doubled during his term, profits had dropped 90 percent as a result of his aggressive capital commitments. From 1988 to 1990 alone, earnings fell from $274.1 million to $4.4 million.
In January 1990 David W. Johnson was elected president and CEO. Johnson came to Campbell from Gerber Products Company, where he had been successful in streamlining that company's operations. Johnson employed a back-to-basics strategy that called for drastic restructuring. The new CEO oversaw the divestment of whole businesses, including mushroom farms, a salmon processing plant, the refrigerated salads line, and cookie maker Lazzaroni. By June 1991, Johnson had closed or sold 20 plants worldwide, reduced the company's 51,700 person workforce by 15.5 percent, and pulled unprofitable lines from store shelves. While Johnson purported to support marketing, he also cut Campbell's advertising budget.
Johnson was most interested in promoting the company's core product, soup. Even into the early 1990s, Campbell soups had 66 percent, or $1.6 billion, of the $2.6 billion U.S. soup market, which contributed almost half of the conglomerate's $570 million in operating profits.
In anticipation of the North American Free Trade Agreement, Johnson also supervised the merging of Campbell's Canadian operations, some Mexican companies, and the U.S. businesses into one division called Campbell North America. Late in 1991, Campbell also focused on the impending European Community's single market, which promised 344 million consumers (50 percent more than the United States) and had potential for future growth. The cookie subsidiary of Campbell Soup, Campbell Biscuits Europe, got a head start on the market in February 1990, when it reorganized its European corporate structure, consolidated marketing, and standardized packaging.
By the end of 1991, some indicators showed that Johnson's efforts had paid off: Campbell's earnings through the first three quarters of 1991 had risen 33 percent, making the company's profits the second fastest-growing in the food industry. But some analysts warned that the profits came at the expense of core brand promotion, which was cut in 1991. The growth in earnings was not based on sales increases, which only rose 1.9 percent during the same period.
Johnson was given an overall good rating in the quick turnaround at Campbell. In 1992 the company made bolder goals, with a vision expressed as "Campbell Brands Preferred Around the World." The plan made further preparations for the European Community's single market and expanded those efforts around the world. The company was reorganized into three multinational divisions: Campbell North and South America grouped Campbell's Swift-Armour subsidiary in Argentina with the previously organized North American group; Campbell Biscuit and Bakery united Pepperidge Farm in North America with Delacre in Europe and Australia's leading biscuit company, Arnotts Ltd. (of which Campbell by then owned 58 percent); Campbell Europe/Asia was a growth-oriented division that comprised the company's "greatest opportunity and challenge," according to the 1992 annual report.
In 1993 Vlasic retired as chairman, with Johnson taking on this additional title. Also, Bennett Dorrance, a grandson of condensed soup inventor John Dorrance, was named vice-chairman of Campbell Soup. Bennett Dorrance represented the Dorrance family's interests on the board of directors and took an active role, particularly in tying executive pay to performance and putting oversight practices into place. The family's power was soon diminished somewhat, after Bennett's brother, John T. Dorrance III, sold most of his stake in the company by late 1996, leaving the family in control of 44 percent of the stock. No attempts at a takeover—hostile or otherwise—were immediately evident, however.
Johnson continued to restructure Campbell as the decade continued. The company recorded a $300 million restructuring charge in 1993 in relation to the divestment of several underperforming units. That year also saw the launch of a new soup campaign using the slogan "Never Underestimate the Power of Soup." The Mrs. Paul's frozen seafood line was sold to Pillsbury Co.'s Van de Kamp's unit in 1996. Altogether, Johnson dumped $500 million worth of noncore, underperforming assets from 1990 through 1996.
Simultaneously Johnson led Campbell Soup in a more aggressive overseas push and sought out compatible acquisitions. In addition to a big push into the Mexican soup market, the company in 1993 began selling V8 vegetable juice in Europe and established a joint venture with Nakano Vinegar Co. Ltd. to market Campbell's soups in Japan. In January 1995 Campbell completed the largest acquisition in its long history, paying $1.1 billion for Pace Foods Ltd., the leading maker of Mexican sauces (picante and salsa) with 1994 sales of more than $200 million. Later in 1995, the company picked up Greenfield Healthy Foods, the number one maker of fat-free brownies and cookies for the health and convenience store markets, and Fresh Start Bakeries, a supplier of baked goods to fast-food restaurants. The latter, however, was sold in 1999.
Campbell Soup continued its overseas push with the 1996 purchases of Homepride, the leading cooking sauce brand in the United Kingdom, and the Cheong Chan soup and sauce business in Asia; and the 1997 acquisition of Erasco Group, the leading seller of canned soup in Germany, from Grand Metropolitan PLC for $210 million. Also in 1997 Arnotts acquired the Sydney, Australia-based Kettle Chip Company. Campbell then the following year spent about $290 million to purchase the remainder of Arnotts, making it a wholly owned subsidiary. Campbell also extended its soup business in Europe through the $180 million acquisition of the Liebig soup business of France. Even with all of these foreign maneuvers, Campbell was far from a goal Johnson had set in 1993 of increasing overseas operations to 50 percent of sales by 2000. The figure had stood at 28 percent in 1993 and had risen to 31 percent in 1994, but by 1998 was back at 28 percent.
Despite the lack of progress toward this goal, Johnson had succeeded in improving Campbell Soup's profitability thanks to his aggressive restructuring efforts. The company's net profit margin stood at 10.4 percent for 1996, compared to 5 percent for 1988 and 6.5 percent for 1991. But Johnson was not finished with his tinkering. Campbell recorded restructuring charges of $204 million in 1997 and $262 million in 1998 related to plant closures and the divestment of nonstrategic businesses. Jettisoned in 1997 were the Marie's salad dressing and dip unit, the company's Argentinean beef operations, and its German chilled foods business, Beeck-Feinkost GmbH.
After the installation of Dale F. Morrison as president and CEO (with Johnson remaining chairman), Campbell Soup made its most dramatic divestment yet. In March 1998 the company completed the spinoff of its Specialty Foods segment, which included seven noncore businesses. The $1.5 billion spinoff created a new public company, Vlasic Foods International Inc., which included Vlasic pickles, Swanson frozen foods, Swift Armour meats in Argentina, Open Pit barbecue sauce, U.K. canned foodmaker Stratford Upon Avon, Gourmet Specialty Foods of Germany, and a fresh mushroom business in the United States. This move left Campbell Soup with four main core business segments: soups, sauces and beverages, biscuits and confectionery, and foodservice. The 1998 dealmaking was not quite over, however, as Campbell sold Delacre, its European biscuit business, to United Biscuit (Holdings) PLC for $125 million in cash in June—leaving Pepperidge Farm and Arnotts as its mainstays in biscuits and crackers. In June the company sold its can-making assets to Stamford, Connecticut-based Silgan Holdings Inc. for $123 million. In August Campbell completed the purchase of Fortun Foods, maker of StockPot soup, the market leader in premium refrigerated soups, a rapidly growing segment of the foodservice sector.
According to Business Week, Morrison warned employees in the fall of 1997, "We are driving the incredibly shrinking company." Reduced to a much more manageable core of leading brands, Campbell faced a number of challenges. In addition to the slower than expected growth in international sales, Campbell's canned soup sales in the United States were on the decline, leading to the implementation in 1998 of the largest advertising campaign in company history, which centered around a new slogan, "Good for the Body, Good for the Soul." It was clear by this time that increasingly convenience-minded consumers were losing their appetites for condensed soups—both for eating as soups and for using to prepare meals. Campbell therefore also introduced in 1998 and 1999 several new convenience products in an attempt to recharge sales. These included ready-to-serve Tomato soup in a resealable bottle; Campbell's Soup to Go single-serving, microwavable soups; and the Campbell's Select line of ready-to-serve soups. The cans for the ready-to-serve soups were soon redesigned with easy-open pop-top lids, but the most noticeable change for the entire Campbell's soup line was the first major overhaul of the labels since the now-iconic design was first used more than 100 years previous. In the fall of 1999 the new labels debuted. While they remained red and white, the Campbell's script logo was smaller and each can showed a steaming bowl of the variety inside. In July 1999, meantime, Johnson retired from his remaining position as chairman. A longtime member of the board, Philip E. Lippincott, succeeded him.
Johnson's retirement proved short-lived. The board of directors and the founding Dorrance family, which continued to own more than 50 percent of the company, had grown dissatisfied with the company's performance, particularly its stock price. Under pressure from the board, Morrison tendered his resignation in March 2000. Johnson was brought back on an interim basis while a search for a permanent successor was launched. During this interregnum, Johnson reintroduced the famous "M'm! M'm! Good!" slogan in Campbell's advertising, replacing the poorly received "We Have a Soup for That" campaign.
In January 2001 Douglas R. Conant was brought onboard as the new president and CEO. A 25-year food industry veteran, Conant had experience at three of the largest food companies in the world: General Mills, Inc., the Kraft Foods unit of Philip Morris Companies Inc., and Nabisco Holdings Corp. He had most recently served as president of Nabisco Holdings' Nabisco Foods unit, a maker of snacks such as LifeSavers candies and Planters Nuts and condiments such as Grey Poupon mustard.
Just weeks after Conant began at Campbell, the company announced its biggest acquisition since the 1995 purchase of Pace. In a deal completed in May 2001, Campbell paid Unilever about $900 million for several dry soup and bouillon brands in Europe, including Oxo, Batchelors, Heisse Tasse, Bla° Band, and Royco. These additions made Campbell the largest soup seller in most of Europe and increased its share of the overall European soup market from 20 percent to 30 percent. In August 2001 George M. Sherman, former CEO of Danaher Corporation and a Campbell director since 1995, was named chairman, replacing Lippincott.
In July 2001 Conant launched a three-year "transformation plan" to revitalize the ailing company. Dividends were slashed to free up funds to improve the quality of the soup line and significantly increase marketing outlays not only for soups but also for nonsoup brands such as Prego and Franco-American. On the quality front, Campbell began overhauling the way it made soups, most notably by switching to a "cold-blending" process, which allowed ingredients to be added at different points in the cooking process rather than all at once. This process helped the broth stay clear and the vegetables retain their crunch. Other improvements were in the form of an increase in the amount of a key ingredient. For example, the amount of chicken in Chunky Chicken Corn Chowder was increased by one-third, while Alphabet soup gained 40 percent more letters. In addition, as sales of Campbell's condensed soups continued to fall—increasingly because of the rise of private-label competition—the company pushed to develop new lines of convenience soups. In 2002, for example, Campbell's Soup at Hand debuted. Designed for on-the-go eating, these sippable soups were sold in an easy-open, plastic, microwavable container that could be held in one hand like a soda can. The next year, Campbell began selling its Chunky and Select soups in microwavable bowls. The company also expanded its product portfolio through acquisition during this period. In 2002 Campbell strengthened its position in the Australia snack food market by acquiring Snack Foods Limited, that country's number two maker of salty snacks. Also acquired that year was Erin Foods, the second largest dry soup company in Ireland.
Results for 2003 were somewhat lukewarm but better than that of the previous several years. Although condensed soup sales continued to fall, overall sales increased 9 percent, to $6.68 billion, aided by an 8 percent increase in ready-to-serve soup shipments and continued strong performance for the V-8 and Pace brands and at the Pepperidge Farm and Godiva subsidiaries. More changes were implemented during 2004 to build upon the success of the previous three years. Campbell's North American business was reorganized into four units: U.S. soup, sauces, and beverages; operations in Canada, Mexico, and Latin America, plus the company's foodservice business; Pepperidge Farm; and Godiva. A new plan to "drive quality growth" included the layoff of 400 employees from the worldwide payroll of 25,000, the implementation of a new sales and distribution system in Australia, and $32 million in pretax charges for these initiatives. Campbell set goals of attaining net sales growth of 3 to 4 percent per year and earnings per share growth of 5 to 7 percent per year. Among other developments in 2004, Campbell dropped the Franco-American name from its SpaghettiOs line of canned pasta products in favor of the Campbell's name in an attempt to leverage the strength of the flagship brand. In addition, Sherman retired as chairman. Replacing him was Harvey Golub, former chairman and CEO of American Express Company and a Campbell director since 1996.
Arnotts Ltd. (Australia); Campbell Australasia Pty. Ltd. (Australia); Campbell Cheong Chan Malaysia Sdn. Bhd.; Campbell Company of Canada; Campbell Foods Belgium n.v./s.a.; Campbell Foodservice Company; Campbell France S.A.S.; Campbell Japan Inc.; Campbell Soup Asia Ltd. (Hong Kong); Campbell Soup Ireland Limited; Campbell Soup Sweden AB; Campbell Soup Trading (Shanghai) Co. Ltd. (China); Campbell Soup UK Limited; Campbell Southeast Asia Sdn. Bhd. (Malaysia); Campbell's de Mexico S.A. de C.V.; Campbell's Germany GmbH; Campbell's Netherlands B.V.; Campbell's U.K. Limited; Continental Foods S.A. (France); Erin Foods Limited (Ireland); Eugen Lacroix GmbH (Germany); Godiva Chocolatier, Inc.; Joseph Campbell Company; Pepperidge Farm, Incorporated; Sinalopasta S.A. de C.V. (Mexico); Snack Foods Limited (Australia); Stockpot Inc.
General Mills, Inc.; Kraft Foods Inc.; H.J. Heinz Company; Unilever; Sara Lee Bakery Group; Kellogg Company.
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—updates: April Dougal Gasbarre;
David E. Salamie