Campbell Soup Company has announced its growth strategies and provided an update on plans for fiscal 2014 at a meeting with investors. Those strategies focus on profitably growing the company’s soup and simple meals business in North America, expanding its international presence and continuing to drive growth in snacks and healthy beverages.
The company expects to launch more than 200 new products in fiscal 2014 as it strengthens its core businesses and expands into higher-growth spaces, including new consumer segments, categories and geographies. Campbell said that it is responding to the evolving tastes, preferences and needs of both its core consumers and new consumers by driving innovation across soup and simple meals, snacks and healthy beverages.
Campbell plans to launch Campbell's Homestyle soups, a new line with "the taste that takes you home," which will feature wholesome ingredients like juicy strips of roasted white meat chicken, vegetables with farm-fresh goodness and seasoned chicken stock. This delicious product has no added preservatives and will be available in 29 varieties.
The company also intends to build on the success of its Campbell's Chunky soup line, which it says delivered strong growth in the past year, with new pub-inspired varieties, including Hearty Cheeseburger, Spicy Chicken Quesadilla and Philly-Style Cheesesteak.
Consumers can expect a new Creamy Thai Style Chicken and Rice variety of Campbell's Go soups, a premium line of soups that features microwaveable pouch packaging and bold, adventurous flavours, as well as new varieties of Healthy Request and Campbell's condensed soups.
The introduction of Campbell's Slow Cooker Sauces will expand the company's offerings in the dinner sauce category. Campbell's Slow Cooker Sauces will make it easy for consumers to prepare convenient meals with their favourite meats in slow cookers, which are owned by more than 80% of U.S. households and used to prepare nearly 500 million meals a year.
For consumers who enjoy creative cooking, Campbell expects to introduce a new line of Swanson flavour-infused broths featuring a selection of culinary-inspired varieties such as Mexican Tortilla and Thai Ginger.
The Goldfish brand continues to grow after more than 50 years, Campbell said. To expand its appeal, the company has launched Goldfish Puffs, cheesy air-puffed baked snacks that have been created with teens in mind.
The company is also making a splash at mealtime with Pepperidge Farm Goldfish Mac & Cheese, the brand's first entry in the simple meals category.
To entice consumers with a sweet tooth and drive continued growth in Pepperidge Farm cookies, the company expects to launch two limited-edition holiday varieties of Milano cookies: Chocolate-dipped Milano and a Candy Cane Milano. Pepperidge Farm also plans to continue to rotate seasonal varieties of its Dessert Shop cookies, with Pumpkin Cheesecake and Caramel Apple varieties returning this fall.
Campbell plans to introduce V8 V-Fusion Refreshers, a new thirst-quenching juice cocktail that offers a crisper, cleaner taste. V8 V-Fusion Refreshers juice cocktails are expected to be available in four delicious varieties, including Black Cherry Berry and Cranberry Grape.
To drive growth in specialty beverages such as energy drinks and kids juice boxes, Campbell is expanding its V8 V-Fusion + Energy beverage range by introducing two new diet varieties: Diet Strawberry Lemonade and Diet Cranberry Raspberry. Campbell is also rolling out new variety packs of V8 V-Fusion juice drink boxes for kids as well as a new grape variety. The planned launch of V8 Bloody Mary mix will enable consumers to enjoy the great taste of V8 100% vegetable juice as a mixer.
V8 Harvest juice will be the brand's first entry in the rapidly-growing $12 billion packaged fresh category. This fresh 100% tomato vegetable juice was developed jointly by Campbell and Bolthouse Farms, which became part of Campbell in August 2012. V8 Harvest juice will be available in the refrigerated section of the retail store perimeter, where a growing number of consumers are shopping for fresh foods - particularly Millennials, a key demographic group for Campbell.
Turning to its plans to increase its international presence, Campbell said that, in Australia, it is focused on growing its Arnott's biscuit business, the company's third-largest brand. In the upcoming fiscal year, Campbell will build on the success of this year's Tim Tam Treat Packs, smaller-sized packages designed for "treating" occasions. The company will also focus on building V8 juices down under, where the brand has 90% awareness but only 12% household penetration. Campbell plans to continue to introduce new flavours, including a "light" V8 V-Fusion beverage and drive trial with advertising and in-store activation.
In China, the company noted that the pending acquisition of Kelsen Group will give Campbell a solid platform for growth in baked snacks.
“We are executing against a dual mandate to strengthen our core businesses and expand into higher growth spaces,” said CEO Denise Morrison. “We have had striking movement in both prongs of this mandate during this fiscal year. We've made good progress in strengthening our core businesses, led by impressive advances in U.S. Soup. We are clear-eyed about our need to address some continuing challenges, particularly in U.S. Beverages. Our expansion into higher growth spaces is being propelled by innovation and external development transactions that represent very bold and deliberate moves for Campbell.”
Campbell continues to expect sales growth at the upper end of the 10- to 12% range and adjusted EBIT growth at the upper end of the 4- to 6% range. Adjusted EPS, benefiting from a favourable tax rate and EBIT improvement, is expected to grow between 6 and 7%, putting adjusted EPS in the range of $2.58 to $2.62. This guidance includes the estimated impact of the Bolthouse Farms business and excludes the impact of acquisition transaction costs and restructuring charges.
In fiscal 2013, Campbell continues to expect Bolthouse Farms to contribute approximately $750 million to sales and add approximately $0.06 to adjusted EPS, including the impact of the suspension of Campbell’s strategic share repurchase program.
“We see opportunities to continue to accelerate our performance next year,” continued Owens. “In fiscal 2014, we expect an improvement in the rate of organic sales and EBIT growth. We foresee solid performance in U.S. Simple Meals, led by the launch of new products and line extensions, growth in premium soups, increased breakthrough innovation and better availability for many of our products. Organic sales will also benefit from strong growth in the Bolthouse Farms portfolio.”
