CAMDEN, N.J. — The slow reopening of full-service restaurants and many consumers' tentativeness in returning to them appears to be to the benefit of consumer packaged goods (CPG) companies, such as Campbell Soup Co.
Consumers continue to stock up on pantry products, despite the fact that the states are focused on reopening their economies, Campbell Soup CEO Mark Clouse told CNBC’s Jim Cramer.
Campbell’s saw sales spike more than 50% during the worst of the coronavirus pandemic and sales across the board, including in its Pepperidge Farm and Snyder’s of Hanover categories, have remained elevated in June, according to IRI data.
“I think the reality is that, even though we may be seeing some recovery and people returning to a little bit more normality, I think the behaviors that were built in the last several months have the real potential to continue to provide a catalyst for improved results,” Clouse said on a June 15 episode of "Mad Money" on CNBC.
Camden, N.J.-based Campbell saw a sales spike of more than 50% during the worst of the coronavirus pandemic, according to the report citing IRI data, and sales across the board, including in Campbell's Pepperidge Farms and Snyder’s of Hanover categories, have remained elevated in June.
During the company’s third quarter, which ended April 26, “We experienced unprecedented broad-based demand across our brands as consumers sought food that delivered comfort, quality and value,” Clouse said in an earnings report. “This demand resulted in double-digit increases in organic sales. … In addition, Campbell’s products were purchased by millions of new households, with total company household penetration increasing over 6 percentage points in the quarter compared to the third quarter of fiscal 2019.”
Part of the reason: As other businesses cut down on ad spending due to the economic downturn, “Campbell pumped money into marketing as restaurant operations were either shut down or limited and people frequented grocery stores more than usual,” Mad Money reported.
“If the end market slows a bit, the elevated overall demand is going to continue to provide an opportunity for a company like ours,” Clouse said. "We are trying to appropriately gauge how demand is ebbing and flowing, but if we’re going to err, we want to try to err on the side of having [product] availability.”