Campbell Outlines Four Promising Platforms to Drive Growth over the Next Decade
February 22 2017 - 11:30AM
Business Wire
Campbell Soup Company (NYSE:CPB) President and Chief
Executive Officer Denise Morrison and Senior Vice President and
Chief Financial Officer Anthony DiSilvestro provided an overview of
the company’s strategic direction during the Consumer Analyst Group
of New York (CAGNY) Conference in Boca Raton, Fla. today.
Morrison shared her perspective on the state of the food
industry and the consumer environment, and highlighted the steps
Campbell is taking to define the future of real food through
strategic foresight.
Morrison said, “Across every industry and in every organization,
the pace of change is unpredictable, unrelenting and unforgiving.
The future food world will be more complex and more challenging. To
fully unlock Campbell’s performance, we're looking beyond typical
five-year planning horizons and establishing well-informed
perspectives on opportunities and disruptions driven by the
intersection of real food, health and well-being and
technology.”
Morrison focused on four emerging growth platforms,
including:
- Future Commerce: E-commerce is
transforming the food industry. Between 2016 and 2021, e-commerce
sales of food and beverages are projected to reach $66 billion with
a compound annual growth rate of 38 percent.1 Morrison painted a
picture of frictionless future commerce where consumers’ food needs
will be met anywhere, anytime through connected kitchens and an
always-on shopping environment. Morrison outlined Campbell’s
current programs and plans such as meal kits, buy-now capabilities,
recipe integration with leading recipe sites, and dash buttons, as
well as the company’s focus on increasing its e-commerce
capabilities as consumer expectations shift from centralized
locations and platforms to diverse omni-channel experiences.
- My.Moments: Campbell recognizes
a growth opportunity to expand its business in snacking across many
of its categories. Snacking is an $89 billion market in the U.S.
with a compound annual growth rate of nearly 3 percent.2 While more
than two-thirds of snacks are of the “mindless munching” variety,
the snacks of tomorrow will be more deliberate with a specific
purpose; they will be more accessible, affordable and high-quality;
and they will be both customizable and offer functional benefits.
Campbell’s longer-term plans include adding functional benefits to
its existing snacks, while also selecting real food ingredients
that can address specific needs, such as endurance, mood and energy
management, with a goal of ultimately creating new snacking
platforms that are true to the company's Purpose, Real food that
matters for life's moments.
- Better.Me: The next frontier in
nutrition will be about reconfiguring diets according to an
individual’s specific physiology, lifestyle and health goals. The
Better.Me growth platform leverages biometric data to provide
personalized food options. To meet this emerging need, Campbell
funded Habit, a new startup company positioned at the intersection
of health, technology and food, poised to lead the personalized
nutrition revolution. Habit is currently being tested in the
Greater San Francisco area. For more information, visit
www.habit.com.
- Limitless Local: Limitless Local
is a movement that embraces smaller, more regional farming and food
production models that foster new narratives around quality,
community and place. It fosters a more intimate relationship to
food, where it comes from, how it’s made and who the people are
behind it. Campbell is incorporating Limitless Local in its product
development, with brands such as 1915 by Bolthouse Farms, Well Yes!
soup, and Prego Farmers’ Market, as well as a small-batch
production of one of the company’s original tomato soup recipes
using local New Jersey beefsteak tomatoes. Campbell’s history of
working with American family farmers for more than a century and
its rich heritage of making simple, affordable and delicious foods
uniquely position the company to leverage this growth
platform.
“Guided by our Purpose and our strategic imperatives, we set out
to identify clear and compelling growth opportunities. We
prioritized these growth platforms we believe will have the
greatest impact on Campbell and lead to significant growth
opportunities over the next decade,” said Morrison. “We have what
we need to meet the challenges of this new world. If you look
closely at the 148-year history of Campbell, we are not only a
company that has proven ourselves capable of dealing with profound
change … we are a company with a history of leading profound
change, and we are a company that has thrived in periods of
profound change. I’m confident that we can and will do so again in
the future.”
DiSilvestro provided an update on the company’s three divisions
and its multi-year cost savings program, which has generated cost
savings by reducing layers of management and increasing spans of
control, creating an integrated global services organization and
implementing zero-based budgeting. While Campbell’s current
initiatives will generate in excess of $300 million in savings, the
company has identified additional areas of savings opportunity,
leading the company to increase its aggregate savings target to
$450 million by the end of fiscal 2020. The company expects to
achieve these additional savings by further optimizing its supply
chain network, primarily in North America; evolving its operating
model over time to focus resources on growth opportunities and
drive additional efficiencies; and more fully integrating recent
acquisitions to generate cost synergies and improve effectiveness
by leveraging enterprise scale and capabilities. Cost savings to
date have contributed to recent margin expansion and funded
reinvestments in the business.
DiSilvestro said, “Our strategy is to reinvest a portion of
these savings in order to drive growth. We'll do this a number of
ways including increasing marketing support on our key brands,
funding new product launches and investing against our real food
initiative; making investments in long-term innovation; focusing on
geographic expansion in faster-growing spaces; and building our
capabilities in digital and e-commerce.”
Today’s presentation will be archived on
investor.campbellsoupcompany.com and available for replay later
today.
About Campbell Soup Company
Campbell (NYSE:CPB) is driven and inspired by our Purpose, “Real
food that matters for life’s moments.” We make a range of
high-quality soups and simple meals, beverages, snacks and packaged
fresh foods. For generations, people have trusted Campbell to
provide authentic, flavorful and readily available foods and
beverages that connect them to each other, to warm memories and to
what’s important today. Led by our iconic Campbell’s brand, our
portfolio includes Pepperidge Farm, Bolthouse Farms, Arnott’s, V8,
Swanson, Pace, Prego, Plum, Royal Dansk, Kjeldsens and Garden Fresh
Gourmet. Founded in 1869, Campbell has a heritage of giving back
and acting as a good steward of the planet’s natural resources. The
company is a member of the Standard & Poor’s 500 and the Dow
Jones Sustainability Indexes. For more information, visit
www.campbellsoupcompany.com or follow company news on Twitter via
@CampbellSoupCo. To learn more about how we make our food and the
choices behind the ingredients we use, visit
www.whatsinmyfood.com.
Forward-Looking Statements
This release contains “forward-looking statements” that reflect
the company’s current expectations about the impact of its future
plans and performance on the company’s business or financial
results. These forward-looking statements include statements made
regarding the company’s marketing strategies and its new enterprise
structure and cost reduction initiative. Forward-looking statements
rely on a number of assumptions and estimates that could be
inaccurate and which are subject to risks and uncertainties. The
factors that could cause the company’s actual results to vary
materially from those anticipated or expressed in any
forward-looking statement include (1) the company’s ability to
manage changes to its organizational structure and/or business
processes; (2) the company’s ability to realize projected cost
savings and benefits from its efficiency programs; (3) the impact
of strong competitive responses to the company’s efforts to
leverage its brand power in the market; (4) the impact of changes
in consumer demand for the company’s products and favorable
perception of the company’s brands; (5) the impact of product
quality and safety issues, including recalls and product
liabilities; (6) the risks associated with trade and consumer
acceptance of the company’s initiatives, including its trade and
promotional programs; (7) the practices, including changes to
inventory practices, and increased significance of certain of the
company’s key trade customers; (8) the impact of disruptions to the
company’s supply chain, including fluctuations in the supply or
costs of energy and raw and packaging materials; (9) the impact of
non-U.S. operations, including trade restrictions, public
corruption and compliance with foreign laws and regulations; (10)
the impact of business portfolio changes; (11) the uncertainties of
litigation and regulatory actions against the company; (12)
disruption to the independent contractor distribution models used
by certain of the company’s businesses, including the results of
litigation or regulatory actions that could affect their
independent contractor classification; (13) the company’s ability
to protect its intellectual property rights; (14) the impact of an
impairment to goodwill or other intangible assets; (15) the impact
of increased liabilities and costs related to the company’s defined
benefit pension plans; (16) the impact of a material failure in or
breach of the company’s information technology systems; (17) the
company’s ability to attract and retain key talent; (18) the impact
of changes in currency exchange rates, tax rates, interest rates,
debt and equity markets, inflation rates, economic conditions, law,
regulation and other external factors; (19) the impact of
unforeseen business disruptions in one or more of the company’s
markets due to political instability, civil disobedience,
terrorism, armed hostilities, natural disasters or other
calamities; and (20) other factors described in the company’s most
recent Form 10-K and subsequent Securities and Exchange Commission
filings. The company disclaims any obligation or intent to update
the forward-looking statements in order to reflect events or
circumstances after the date of this release.
1 Source: Proprietary Campbell Estimate
2 Source: Nielsen Scantrack Data 2015
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Campbell Soup CompanyINVESTOR
CONTACT:Ken Gosnell, (856)
342-6081Ken_Gosnell@campbellsoup.comorMEDIA
CONTACT:Thomas Hushen, (856)
342-5227Thomas_Hushen@campbellsoup.com
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