The future CEO of Campbell Soup Co. unveiled a series of ideas for the company today (23 February) as she prepares to take over the role in August.
Speaking at the CAGNY investment conference in Florida, Denise Morrison, currently COO of the US soup giant, said that she sees “many exciting opportunities” in the changing markets and that she and the new executive team will “plan with fresh eyes”.
While she said that it is “premature to attempt offer a roadmap today”, she offered “insights into a few of the factors that are influencing our thinking about Campbell’s next decade”.
In the US soup category, where the company has seen sales fall in recent quarters, Morrison said that the manufacturer would be focusing its attention on developing products for a series of under-served and changing consumer groups – Hispanics, Millenials and baby boomers.
To serve the baby boomer category, with its increasing focus on diet and health, the manufacturer is expanding its Healthy Request line, which is endorsed by the American Heart Association, while continuing to reduce sodium across its range.
Campbell is also focusing on the needs and tastes of younger consumers with the launch of the Slow Kettle Soup range, which Morrison said is a “premium range that rivals fresh soup”, but is shelf stable. The range will be sold in clear containers, and features the tag-line ‘made with patience not preservatives’.
The company is also adding a series of “culinary twists” to its condensed tomato soup range, with products like Harvest Orange Tomato.
She said that these are only the first steps of a “major new innovation agenda” with more new products to come.
Morrison also outlined a shift away from promotions and discounting, which the company attributed to its “disappointing” first-half results. She said that the company did not get the volume lifts it expected from promotions, and “learned a powerful lesson about consumer stock-up behaviour”.
While she said Campbell is focusing on improving sales, it also needs to ensure consumers eat more of their products, rather than stockpile them too often. The company plans to shift away from price and towards brand building. “Effective brand building will mean customers get our product out of the pantry and onto the table,” she said.
Additionally, the company will look to improve margins through redirecting promotional spend into marketing and R&D.
Morrison also said the company will work to offset increased input cost increases through price rises and improved productivity, adding there has been significant progress on the development of a common soup platform.
“Our soup making process is more complex than necessary,” said Morrison, with the company working to eliminate non-essential costs and reducing complexity, for example, through the use of common bases.
While the focus was mostly on the underperforming US soup sector, Morrison also outlined aspects of the company’s plans for its healthy beverages, baked snacks and international divisions.
She said that V8 is the fastest growing shelf-stable juice range in the US, and following on from the launch of V8 VFusion, the company will launch V8 Energy Shots, and energy drinks, which contain green tea extract, as well as smoothies in the second half of the year.
The company will also invest in its baked snacks division through the addition of further capacity in its Australian operations and new product development in the US. In the US, Morrison said NPD would focus on developing “neighbouring product categories”.
For example, the company has extended its Goldfish crackers range to include Goldfish Grahams, baked snacks and bread.
In its international operations, she sees “significant opportunities” to broaden its footprint in developed markets, such as Germany, France and Belgium as “simple meals is a huge category”.
In Russia and China, the developing markets where it already has a presence, Morrison sees a “big opportunity” but added that the company is still working to evaluate the best ways of going about developing its presence in these countries.
“The key to success in these markets is down to patience and endurance,” she said, adding that they are “not successful businesses yet” but the company is “putting the pieces together”.
Morrison will reveal her full strategic plan for the company in July.