Today (1 October), Denise Morrison takes the job of COO at Campbell Soup Co. and a seat on the US food group’s board. Her promotion is just a temporary step: in July, she is set to replace Doug Conant as chief executive. What lies ahead for the soup giant under its new leadership?

Promoting from within has its pros and cons.

On the plus side, a candidate for internal promotion carries intimate knowledge of a business and can be tasked with carrying out a company’s well-crafted strategy.

On the other hand, promoting an internal applicant carries with it the risk that a company may not get the fresh insight it needs to push forward. ‘Business as usual’ can be a term that attracts confidence or concern.

This week, US food group Campbell Soup Co. promoted from within when it announced that Denise Morrison, the head of its North American soups, sauces and beverage division, would succeed Doug Conant as CEO next July.

After almost a decade at the helm, Conant “felt it was time” to step down, a Campbell spokesman told just-food. And the company has turned to Morrison, who joined the business in 2003, to succeed him.

Morrison’s seven years at Campbell have seen her first take the role of chief customer officer, then that of president of Campbell USA before her current position. The 56-year-old’s CV also includes time at Procter & Gamble, PepsiCo and Kraft Foods.

However, all eyes are on the future, with questions surrounding Campbell’s strategy at home and abroad. Looking at the US, analysts have praised the progress Campbell’s sauces and beverage businesses have made under Morrison’s stewardship but they remain concerned about the company’s core domestic soup division.

Campbell’s US soup business has struggled during the downturn, with CEO Conant saying the category has faced growing competition from other “simple meals”. For the upcoming so-called ‘soup season’, Campbell has launched one of its most significant marketing campaigns to revive sales and analysts will be watching the impact of the push with interest.

“While we applaud the strides Ms. Morrison made with sauces and healthy beverages over the past few years, we cannot ignore the struggles that have plagued soup over this time with Campbell losing share in an ailing category. We believe Campbell has been slow to react to competitors and its focus on lower-sodium products likely hurt the overall category,” Stifel Nicolaus analyst Christopher Growe wrote in a note to clients this week.

“We are anxious to see how the 2011 soup season progresses as the company has increased its risk on the category with an aggressive marketing campaign and a continuation of the low sodium push across its line. Campbell launched an intense advertising campaign in early September that highlights the taste aspects of soup as well as the health benefits, value, and convenience of the product. At the same time, the company has kept its foot firmly on the promotional pedal.”

Internationally, Campbell made a concerted drive into Russia and China in 2007 but, aside from the odd small moves to expand the business in both markets (the 2008 launch of the Swanson brand in Shanghai and the 2009 distribution deal with a Coca-Cola Co. bottler in Russia being examples), some commentators have been disappointed with the pace of the company’s expansion.

Growe highlighted international growth as one of three tasks for Morrison and her new team – alongside “correcting the problems” within the US soup division and “continuing the success” of snacks.

“In addition to correcting the problems at US Soup, Morrison and her team will be tasked with continuing the success of its snacks business as well as leading the company’s charge in establishing a foothold in the developing Russian and Chinese markets. The company has made slow progress in these markets where the paradigm is for changing consumer perception – most soup is homemade,” Growe explained. “However, the payoff is clearly compelling – these markets are far larger than the US and represent the next frontier for packaged soup.”

Although Morrison will not become CEO until next July, she has been immediately promoted to COO and a position on the company’s board. Her first act has been to make changes to the company’s senior management team. Alexia Howard, an analyst at Sanford Bernstein, picked out one management change as a possible sign of the direction of the company’s strategy.

Howard argued that the appointment of Larry McWilliams, formerly head of Campbell’s international business, to a role of senior vice president of international business development, reflected the company’s “increasing focus onto expansion into emerging markets and possible M&A activity overseas”.

“The company is clearly subscale in emerging markets versus its peers – Campbell’s continues to invest circa US$50m per year to try to build out the Russian and Chinese retail soup markets but accretive growth remains a long way off,” Howard said.

The Sanford Bernstein analyst said Campbell’s management had indicated it would be “more active” in terms of looking for acquisitions, although she added the company had explained it did not see an environment full of possible targets.

Nonetheless, Howard said acquisitions overseas that “can fill gaps in the portfolio – or be synergistic – would be very attractive”. She added: “We believe that the appointment of McWilliams as head of international business development sends a clear signal that the company may be placing more of a focus now on fringe markets that could represent sizeable long-term growth opportunities for the company – but these could take time to bear fruit.”

Where Campbell has less time to see its strategy pay off is in the US and, more specifically, in soup. While the category has been weak, investors and commentators have been disappointed by Campbell’s performance in an economic climate that should arguably be ripe for soup, given the trends to eating at home and for value-orientated products.

And, like Conant, Morrison’s most important task will be to revive Campbell’s domestic soup business.

“What the announcement doesn’t change, in our view, is the more immediate thought process around Campbell’s shares, which has almost completely to do with a more successful performance this upcoming soup season,” Barclays Capital analyst Andrew Lazar said this week.  

“If Campbell manages to turn out a better soup season, we see potential upside in the shares. If not, then we believe this management team – whether headed by Doug Conant or Denise Morrison – would likely face building board and shareholder pressure anyway.”