For much of Campbell Soup’s 152-year old history, it has been synonymous with its cans of tomato, mushroom, creamed chicken and other soups. But during the past decade, it has moved aggressively to grow its customer base by expanding into new areas while giving those who already use its products additional occasions throughout the day to consume them. The effort has come with a mixed record of success.
Efforts to expand into fresh products were dogged with difficulties, including outside factors like weather and internal issues with running a business that differed greatly from the packaged sector, where Campbell Soup had amassed decades of knowledge.
Campbell Soup sold its Bolthouse Farms business, a maker of carrots, smoothies, juices and dressings, to an affiliate of private equity firm Butterfly Equity for $510 million in 2019, just seven years after buying it for $1.55 billion. It also sold Garden Fresh Gourmet that same year for an undisclosed amount, unloading its line of refrigerated salsa, hummus and dips, four years after buying the brand for $231 million.
A bright spot for the company, however, has been the $4.9 billion acquisition of Snyder’s-Lance made under Morrison in 2017 that included brands like Pop Secret, Kettle, Cape Cod and Emerald. The purchase — the largest in its history — lessened its reliance on soup and gave it an even greater presence in snacks, which now equates to roughly half of its business.
It’s uncertain how much money Campbell Soup gained or lost from the Plum Organics purchase. But one thing is certain: Plum’s focus on organic baby food and kids snacks doesn’t appear to mesh with the majority of Campbell’s portfolio.
To be sure, Campbell Soup does have kid-friend brands such as SpaghettiOs, Goldfish Crackers and soups marketed toward children, but the majority of what it sells doesn’t fall into the nutritious line of baby, toddler and kids’ food products where Plum excels. At the same time, all of Plum’s products are certified organic and non-GMO, which is likely a small portion of Campbell Soup’s overall sales. Campbell should benefit from selling this non-core brand and focusing more of its attention on soup and snacks.
For Sun-Maid, which has made its name in raisins and other dried products since its founding in 1912, offers minimally processed foods that are widely recognized by parents who grew up snacking on them as kids. By adding Plum to the mix, Sun-Maid can grab moms and dads who want a better-for-you snack for their young kids before transitioning them to its raisins, dried fruits and baked goods as they get older.
Food giants like Nestlé, Conagra Brands and Kellogg have been aggressively reshaping their portfolios to divest slow-growing businesses or operations that don’t fit with their broader strategy. This transaction is another example of that trend, and likely sends Plum into the hands of a steward better suited for the brand.