By Annie Gasparro
For Campbell Soup Co., the coronavirus pandemic has accomplished
what years of corporate strategy could not: get customers back to
stocking their pantries with the company's iconic red-and-white
cans of soup.
Packaged cookies, canned tuna and frozen meals have flown off
the shelves in the past few months as customers stopped eating out
and cooked at home. After losing customers to more
health-conscious, artisanal brands, companies like Campbell, Kraft
Heinz Co., Nestlé SA and Bumble Bee Foods are getting an unexpected
chance to reintroduce themselves to customers and keep them coming
back.
Big food makers like Campbell, which spent years trying to
reinvent themselves for shoppers' changing tastes, have found that
their ubiquity and consistency have turned out to be an advantage
against newer brands like Amy's Kitchen that had cut into sales.
Now those time-honored brands are stressing the convenience and
affordability of their food, while speeding up product development
to keep pandemic-era customers coming back.
"What's old is new again," Mark Clouse, Campbell's chief
executive, said last month.
Analysts estimate that Campbell's sales in its fiscal third
quarter, which the company is expected to report on Wednesday, rose
some 16% from a year earlier, according to Consensus Metrix. That
would be the company's best quarterly performance by that metric in
more than 30 years -- a significant turnabout after a period of
turmoil at the company.
Former CEO Denise Morrison championed an expansion into fresh
foods intended to address changing tastes. But Campbell said the
expansion overcomplicated operations, and an activist investor
began pressing for a sale of the company, sowing tensions in the
family that controls the 150-year-old food maker.
Ms. Morrison left Campbell in 2018 and the company divested the
fresh business. Mr. Clouse, who joined last year, has restructured
the company and refocused on soup, a bet that has paid off as
customers have flocked back to shelf-stable foods.
Under Mr. Clouse, Campbell has worked to make its soups better
tasting, more filling and derived from simpler ingredients. It has
added of-the-moment varieties, such as bone broth, and packaging
that simplifies heating and eating.
Campbell is trying to make sure its new and returning customers
notice the improvements. The company is ramping up social-media
marketing, promoting its condensed soups and broths as ingredients
for stews and casseroles.
"We're taking all the right actions to try to make that
connection," Mr. Clouse said.
It is also promoting the affordability of its soup, given the
economic pressures many consumers face.
Dart McAdoo, a 41-year-old videographer in Raleigh, N.C., is
among shoppers returning to the soup aisle this spring. He recently
used Campbell's creamy cauliflower soup to make shrimp with
cauliflower grits. "I grew up eating Campbell's soup," he said.
"It's a comfort food."
U.S. retail sales of Campbell's soup skyrocketed 42% in the four
weeks ended April 19 from a year earlier, according to data
Campbell provided from market-research firm IRI. Sales of its
Pepperidge Farm cookies rose 28%, the data showed, and sales of the
Prego line of pasta sauce that Campbell owns jumped 49%. Condensed
soups, the Chunky line and Prego pasta sauces have each gotten into
around five million new households during the pandemic, the company
said, citing IRI data.
Robust manufacturing and distribution networks helped Campbell
and other packaged-food makers get products to stores more swiftly
than some other, smaller rivals could.
Even Campbell struggled at times. Earlier in the pandemic, it
couldn't make enough Pepperidge Farm Goldfish crackers to meet
demand and ran out of stock, causing U.S. retail sales to fall 6%
in the four weeks ended April 19, according to Campbell and
IRI.
During the peak of the pandemic-related grocery buying, the
number of items that weren't in stock jumped 160%, according to
market-research firm Nielsen.
"Big established brands are able to keep up with demand better,"
said Joe Ens, a former General Mills Inc. executive who now runs a
small brand of protein-rich cereal called HighKey.
Nestlé spent recent years modernizing its Lean Cuisine frozen
meals, which hadn't changed much since their introduction in 1981.
Nestlé added restaurant-inspired recipes, simplified ingredients
and during the pandemic added a new line called Life Cuisine. Now
more people are trying the frozen meals for the first time in
decades.
"It's not what they remember," said John Carmichael, president
of Nestlé's U.S. food division. "We've been working for years for
this moment."
Canned tuna has also garnered new buyers, said Bumble Bee's
Chief Growth Officer Todd Putman. "This is a moment in time where
we can reintroduce a 120-year-old brand," he said.
Write to Annie Gasparro at annie.gasparro@wsj.com
(END) Dow Jones Newswires
June 02, 2020 11:45 ET (15:45 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.