Campbell Soup to sell international and fresh food businesses

636712265201468504vegetable soup carrot.jpg

30 Aug 2018 --- Campbell Soup Company is to sell its international businesses and fresh refrigerated-foods unit, following a several month-long strategic review and pressure from hedge fund investors to sell the whole company. Yesterday, FoodIngredientsFirst reported that speculation was mounting over whether or not the long-established US snacks and soup company will be put up for sale amid a drawn-out period of falling sales.

It is not clear if the plan will appease activist investor Dan Loeb, whose Third Point LLC hedge fund announced a 5.65 percent stake on August 9 and immediately pressed for a sale of the entire company to a competitor as “the only justifiable outcome,” according to Reuters

Shares of the 149-year-old company fell 4.3 percent in pre-market trading.

Campbell’s interim President and CEO Keith McLoughlin says: “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. Importantly, the Board remains open and committed to evaluating all strategic options to enhance value in the future.”

“Our plan will build upon our existing strengths. Our new leadership team will concentrate on significantly improving operational discipline through a rigorous management model that aligns the enterprise from strategy through execution. We are moving forward with a sense of urgency to complete these changes in fiscal 2019, setting the foundation for sustainable, profitable growth in fiscal 2020 and beyond,” McLoughlin explains. 

The soup company also says that as part of the review, it is raising its overall cost savings target to US$945 million by fiscal 2022. 

Building a focused North American company
Campbell says it 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. Each of Campbell’s brands will be managed within a focused and disciplined framework of two differentiated portfolio roles:

Drive Profitable Growth – These powerful and exciting 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.

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 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 US$2.1 billion. 

Campbell has been grappling with waning demand for its classic soup as consumers opt for healthier options. The company's shares have fallen 20 percent over the past year, according to CNBC

In May, CEO Denise Morrison retired immediately after the company reported flat sales. This came as shares in Campbell Soup – which late last year acquired the Snyder's-Lance snack company in a US$4.87 billion deal said to be the soup company's largest ever in its 148-year history – were down 11 percent at US$34.85 in early trading.

Campbell has adjusted its long-term targets to reflect the company’s actions and more focused portfolio.

These are:
•    Organic net sales growth of 1 to 2 percent
•    Adjusted EBIT growth of 4 to 6 percent
•    Adjusted EPS growth of 7 to 9 percent

Also, Campbell expects a net debt to adjusted EBITDA ratio of 3.0x by 2021.

These targets reflect expectations beyond fiscal 2019 and assume the completion of the planned divestitures of Campbell International and Campbell Fresh.

To contact our editorial team please email us at

Related Articles

Food Ingredients News

Raising the bar on palm oil: Wilmar using satellites to track deforestation, Corbion signs up to sustainable network

12 Dec 2018 --- The use of palm oil continues to come under mounting scrutiny forcing companies to address their role in this industry. This has led Wilmar International Limited to launch a new program to map and monitor all of its suppliers. The palm oil giant plans to use satellites to monitor all of its palm oil suppliers, making it almost impossible for them to get away with forest destruction. The pioneering move comes as Corbion has signed on as a member of the North American Sustainable Palm Oil Network (NASPON), through which major industry players in the region are collaborating to create a greener palm oil supply chain.

Food Ingredients News

EHL Ingredients spices up the festive season with new blends, touts flavor insights for 2019

12 Dec 2018 --- EHL Ingredients has launched six new organic and conventional herb and spice blends which, according to the company, offers “an international twist on traditional Christmas recipes.” Tasneem Backhouse, Joint Managing Director, also predicts the flavor trends we can expect to see riding the waves in 2019, including Timut pepper, a Nepalese pepper variety, edible flowers, botanicals and flavors from across the globe.

Food Ingredients News

Healthier indulgence will continue to rise in 2019, says FrieslandCampina Kievit

30 Nov 2018 --- Moments of feeling good matter for everyone, which is why FrieslandCampina Kievit is seeking to enrich these moments by appealing to the senses – delivering the desired end-consumer experience with the right solutions for food and beverage ingredients. As 2018 starts to wind down, the Dutch-based ingredient manufacturer has announced what it sees as the top trends likely to inform food and beverage development in the year to come.

Food Ingredients News

Weekly Roundup: Roquette and Barentz confirm European partnership for food, Fonterra releases Sustainability Report

30 Nov 2018 --- In business news this week, Roquette and Barentz reconfirmed their collaboration across key strategic European food markets. Fonterra released its second annual Sustainability Report covering its progress on environmental, social and economic goals, and Kalsec and EARTH University celebrate their long-running partnership in Costa Rica and Kalamazoo, Michigan. Robert Coviello was named as the new Executive Vice President & Chief Growth and Strategy Officer at Bunge, effective January 1, 2019, and Campbell Soup Company announced it would increase the size of its Board from 12 to 14 members.

Food Ingredients News

Plant-based opportunity? New AGRANA organic potato fiber holds meat alternative potential

29 Nov 2018 --- Austrian-headquartered starch supplier AGRANA has innovated with the launch of a new organic potato fiber solution, to meet technical and health demands. At HiE 2018, which finishes today in Frankfurt, the company is presenting Agenafiber amid the strong rise of a high fiber fortification trend. Due to its well-developed water-binding properties and texturizing characteristics the insoluble fiber offers a lot of various additional benefits in food products, including meat alternatives.

More Articles