CAMDEN, N.J. -- Three years after establishing a business unit for fresh products to keep pace with consumers' growing interest in health and wellness, Campbell Soup Co. is expected to divest the "noncore business" this year. The Campbell Fresh unit includes beverage and fresh snack makers Bolthouse Farms, which Campbell acquired in 2012, and Garden Fresh Gourmet, purchased in 2015, as well as the company’s refrigerated soup business.
The company also will sell its international business with the proceeds used to significantly reduce debt. The divestitures are part of a larger plan to improve performance and drive shareholder value.
"Campbell’s board of directors considered a full slate of strategic options, including optimizing the portfolio, divesting businesses, splitting the company and pursuing a sale," interim President and CEO Keith McLoughlin said. "The board concluded that, at this time, the best path forward to drive shareholder value is to focus the company on two core businesses in the North American market."
Those two units are Campbell Snacks and Campbell Meals and Beverages.
“Our plan will build upon our existing strengths," McLoughlin said. "Our new leadership team will concentrate on significantly improving operational discipline through a rigorous management model that aligns the enterprise from strategy through execution."
Former Campbell CEO Denise Morrison, who was instrumental in building the Fresh business unit, stepped down abruptly in May following reports of disappointing earnings. She had been with the company for 15 years. McLoughlin was appointed interim CEO with directions to begin rebuilding the company.
As part of his plan to turn around the Camden, N.J.-based company, McLoughlin said Campbell Soup Co. will leverage consumer insights and trends to drive relevance, including health and well-being, snacking and convenience. Each of Campbell’s remaining brands, he said, will be managed within a focused and disciplined framework of two differentiated portfolio roles:
- Drive profitable growth: These "powerful and exciting brands" will be managed to grow disproportionately relative to the categories in which they compete. These include brands such as Cape Cod, Goldfish, Kettle Brand, Lance, Late July, Pace, Pacific, Pepperidge Farm Farmhouse and Milano cookies, Prego and Snyder’s of Hanover. Investments in innovation and consumer engagement will enable these brands to leverage evolving consumer tastes and trends.
- Maximize margin and cash flow: These "at-scale brands" will be managed to generate consistent profit and cash flow. These include brands such as Campbell’s Soup, Pepperidge Farm fresh bakery, SpaghettiOs and V8. These brands will be managed with disciplined focus and aligned investments to support their strong market positions, to optimize operating margins and cash flow and to fulfill their equally important role in Campbell’s portfolio.
Campbell has engaged Goldman Sachs and Centerview Partners to commence a process to divest the Campbell International and Campbell Fresh businesses.
Photography courtesy of Campbell Soup Co.