Campbell Soup, the American Soup Maker: Will the Restructuring Pay-off?
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Code : COS0108
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Region : United States |
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US Food Industry ScenarioThe food manufacturing industry, one of the largest industries in the manufacturing sector of the United States, accounted for more than 10% of all manufacturing shipments during 1996-2010. The processed food industry experienced steady growth during the period 1997-2005 but saw a decline from 2005 onward. Business analysts opined that the demand for processed food was less susceptible to fluctuating economic conditions than the demand for other consumer products.... Campbell Soup Company In 1869, Joseph A. Campbell and Abraham Anderson formed a partnership in Camden, New Jersey, to can tomatoes, vegetables, jellies, condiments, and mincemeat. In the subsequent period, partnerships were dissolved thrice, and new relations were formed before Campbell Soup Company was incorporated in 1922. The company developed a method of canning condensed soup in 1899, which added soup to its portfolio. Campbell grew with various acquisitions namely Franco-American Food Company in 1915, C.A.Swanson & Sons in 1955, Pepperidge Farm in 1961, and Godiva Chacolatier in 1974. With the acquisitions the company diversified into frozen foods in 1955, added ready-to-serve soups in 1970, and pickles when it acquired Vlasic Foods in 1978. By the 1970s, the company’s brands attained legendary status due to their historic longevity in the US processed food market. The legendary perception was followed by the products being positioned as premium products... Sales Slump
Campbell’s biggest challenge was to maintain consistency in sales and the growth momentum. For the majority of its sales, it depended more on the mature US market, where the growth rate of processed food was slow. From 1999 to 2010, neither its revenue nor its net profits were consistent. |
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Salt Crisis Eating more salt is widely associated with increased cases of high blood pressure and heart attacks. The FDA recommended not more than 2,300 mg of salt per day per person. A 2010 report from the Institute of Medicine noted that most Americans were consuming about 3,400 mg each day. The biggest salt supplying food constituents were restaurant food and packaged foods such as canned soups...
Identity Crisis Market surveys indicated that among the Hispanic consumer segment and the baby boomers , Campbell was positioned as only a health promoting product. And the company had distanced itself from the higher spending younger generation by not offering diversified tastes and spice combinations targeting the youth...
Strategies of the New CEO The company’s new CEO, Denise Morrison, announced vital measures and outlined future strategies to improve the company’s financial position. She accepted that the company was in trouble as its flagship soup business was facing challenges because of the sodium reduction issue and the company’s failure to capture the attention of the younger generations that preferred simple meals such as frozen foods to soup...
