Campbell Soup Co. has again signalled its renewed focus on businesses more likely to provide the US food giant with more rapid growth with the talks to sell a raft of assets in Europe.

Soup brands like Liebig in France, Erasco in Germany and Blå Band in Sweden are among a clutch of European interests Campbell is in discussions to sell to private-equity group CVC Capital Partners.

The negotiations, which also take in Belgian sauces brand DevosLemmons, are said to be in their “final” stages, so, although nothing is signed, we should expect a sale to go through.

The planned transaction, announced yesterday (12 August), is a further demonstration of Campbell’s strategy of upping its focus on faster-growing sectors and markets. This is not Campbell’s sole strategy – CEO Denise Morrison has spoken of the company’s “dual mandate”, of focusing on more attractive categories and geographies but also strengthening its core business, its US soup operations being a prime example.

However, the potential deal with CVC can be slotted neatly alongside other recent investments in more buoyant industries and categories that show the company is tightening its focus under Morrison.

In fact, one of the first signals of Campbell’s approach came before Morrison, as COO and CEO-elect, formally took the job – and involved the company pulling out of what is seen as a key emerging market for many in FMCG. In June 2011, Morrison announced Campbell was pulling out of Russia four years after it entering the market. Other markets, she explained, including China, “offer stronger prospects for driving profitable growth within an acceptable time-frame”.

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Since then, Campbell has made four significant moves it saw as bolstering its business. Last July, Campbell bought US chilled foods firm Bolthouse Farms for a cool US$1.55bn, the largest acquisition in its history, a deal seen as giving the business greater exposure to categories in the health and wellness space.

In February this year, Campbell struck two distribution deals in Mexico, a market where it already has existing operations. The agreements, Morrison said, would expand the company’s reach in Mexico – even if they meant it would close a local manufacturing plant in the country.

In May, Campbell entered the baby food sector with a deal to buy US firm Plum Organics. The natural and organic segments of the baby food market are where the growth is, while the acquisition, the company hopes, will do two things: widen its presence outside the traditional grocery channel in the US and increase its exposure to different demographics. “It certainly makes sense to get more business from the upmarket end of the US population,” reflected James Richardson, SVP at Hartman Strategy, the consulting arm of industry analysts The Hartman Group. “They are educated and educated people right now in the US are spending more money on food and they are ratcheting up their spend. You’ve got to chase the fat wallets.”

And two months ago, Campbell acquired a business in Europe, snapping up Danisk baked snack maker Kelsen Group. The company, Campbell said, sells its brands in over 80 markets worldwide and has distribution in Asia, South America and the Middle East. 

The plan to sell the assets in Europe, which account for just over 6% of Campbell’s total sales, should be seen in this context. “This planned sale accelerates the company’s strategy of mixing out of its slower-growth, albeit cash generative legacy center-of-the-plate businesses and into higher-growth categories and/or geographies,” Janney Montgomery Scott analyst Jonathan Feeney wrote yesterday.

And what is not on the table in the discussions with CVC further emphasises the point. Kelsen – which Campbell says is a leading position in China’s sweet biscuits sector – will remain with the US group. The export business for Campbell’s snacks business Pepperidge Farm will also stay with the company.

Interestingly, Campbell’s products in the UK are not part of the planned deal with CVC. However, the UK soup market is said to offer better growth prospects than on the Continent. Campbell’s-branded products further afield in the Middle East and Africa are also off limits but those markets, though small for the company, are likely to offer potential.

In the almost two years since Morrison took the helm at Campbell, the company, seen perhaps as traditionally one of the more conservative in the sector, has worked quickly to drive growth from its core businesses in larger markets like the US and build positions in faster-growing sectors and markets.

Eking out growth in the US soup market, where Campbell had seen sales fall in the early part of this decade, will always prove a challenge but Campbell has seen some success; sales in the first nine months of its current financial year were up 5%, helped by innovation. And that is heartening for Campbell; US simple meals, which includes soup, is the company’s largest business by sales. Progress seems to be being made.

And, all the while, Campbell is tailoring its business with additions here and, as looks to be the case in Europe, cuts there for more solid future growth.