Campbell Soup Co. is paying US$700m to increase its exposure to the “faster-growing health and well-being categories” in the US through the acquisition of natural food group Pacific Foods.

Pacific Foods makes natural and organic broths, soups, plant-based beverages and meals. The group, founded in 1987, has a “sustained track-record of growth”, Campbell said as it announced the deal. Pacific Foods generated sales of approximately $218m in the twelve months to the end of May. 

Campbell described Pacific Foods as a natural foods industry “pioneer” with “strong health and well-being and organic credentials” that appeal to younger consumers. The US soup giant said the acquisition will help “accelerate” efforts to expand in the “health and well-being” as well as providing greater access to natural and organic channels. 

Commenting on the deal, Denise Morrison, Campbell’s president and CEO, said: “Pacific is an authentic brand with a loyal consumer following. The acquisition allows us to expand into faster-growing spaces such as organic and functional food. It advances our strategic imperatives around real food, transparency, sustainability and health and well-being.”

Campbell said it intends to bring its “expertise and scale” to Pacific Foods and invest in the business to drive “full-force” growth. Campbell suggested it will expand distribution, boost marketing support and invest in R&D and the supply chain. 

Pacific Foods will become part of Campbell’s Americas simple meals and beverages division, which includes Campbell’s soup, simple meals and shelf-stable beverage units in the US, Canada and Latin America. 

Oregon-based Pacific Foods has approximately 540 employees and operates a certified organic plant where it produces its namesake products. Campbell plans to continue to operate Pacific Foods out of Tualatin. CEO and co-founder Chuck Eggert will stay on as a supplier of key ingredients through his family farms.

“A future with Campbell means we can maintain what we value while accelerating growth of the brand in a way that we couldn’t do alone, reaching more people while increasing our impact on sustainable agriculture,” Eggert said. 

The purchase of Pacific Foods is Campbell’s fifth outright acquisition in five years as the company tries to reshape its portfolio towards higher growth areas. The company acquired US dressings-to-drinks maker Bolthouse Farms in 2012, US organic baby food company Plum Organics and Denmark-based biscuit company Kelsen in 2013, and US fresh salsa and hummus maker Garden Fresh Gourmet in 2015.

In 2013, Campbell sold some of its European assets, including Royco soups and Bla Band sauces, to private-equity firm CVC Capital Partners.

The reshaping of the Campbell portfolio has, in the last 12 months, seen the group invest in companies operating in the e-commerce channel in the US. In May, Campbell became a shareholder in Chef’d, the US online meal-kit business. In October, Campbell said it was the sole investor in San Francisco start-up Habit, a personalised food nutrition company, set up by the founder of Plum Organics, Neil Grimmer.

In May, Campbell booked a fall in sales and earnings for the third quarter of its financial year on weak demand for its condensed soups and broths – and warned that full-year sales could decline.

In Campbell’s last full financial year, which ran to 31 July 2016, the company generated net earnings of $563m, down 15% on the previous 12 months. EBIT decreased 9% to $960m. Campbell’s annual sales fell 1% to $7.96bn. On an organic basis, sales were also down 1%.

Campbell expects the Pacific Foods acquisition to be neutral to earnings in the first 12 months following closing, excluding certain purchase accounting adjustments, and transaction and integration costs. It will be funded through a combination of short- and long-term debt. Closing is subject to regulatory approvals.