Campbell Soup Co. chief Douglas Conant insists the US food group will ride out rising commodity costs due to the “diversified” nature of its portfolio.


The company, which produces a range of soups, sauces, snacks and beverages, has seen its commodity costs rise in recent months, along with much of the rest of the food sector.


Campbell said its wheat, flour, dairy and edible oil costs had grown but that it was well placed to handle the pressure on its business.


“While wheat will clearly continue to be a pressure on the business, I feel good about the diversified nature of our portfolio,” Conant said yesterday (6 September). “We will be able to manage our way around this.”


Conant was speaking as Campbell published its full-year results. The company booked a 12% rise in operating income to US$1.3bn for the year to 29 July. The increase in earnings came as sales rose 7% to $7.9bn.


Soup sales in the US rose 5% with growth across the portfolio. Revenue from the company’s baking and snacking division climbed 6%.


International soup and sauces sales rose 11% to just under $1.4bn. Soup sales buoyed growth in Western Europe and Canada.


Campbell is embarking on an offensive into Russia and China, the world’s two largest soup markets. When asked about Campbell’s prospects in Russia and China, Conant said it was “premature” to speculate on how the business would develop but said the company had the financial resources to grow in the two markets.


“This is the first week that our products are in China – and they won’t be on shelves in Russia for three weeks so it’s premature to hypothesise on what may or may not happen,” Conant said. “But if opportunities arise to get more traction faster, we have the resources necessary.”


Campbell refused to be drawn on whether it had decided to sell its upmarket chocolate business Godiva.


“We’re still in the process of evaluating our strategic options in relations to Godiva,” said Bob Schiffner, Campbell CFO.


Last month, Campbell said Godiva “did not fit” with its “strategic focus on simple meals – including soup-baked snacks, and vegetable-based beverages”.