Campbell Soup Picks Up Pacific Foods
Campbell Soup Co. has entered into an agreement to acquire organic soup maker Pacific Foods for $700 million in cash.
The 30-year-old Pacific Foods is a leading producer of organic broth and soup, along with shelf-stable, plant-based beverages and other meals and side dishes. The company generated approximately $218 million in net sales in the 12 months ended May 31, according to IRI.
“This acquisition is consistent with our purpose: ‘Real food that matters for life’s moments,’" said Campbell Soup chief executive officer Denise Morrison, in a release announcing the deal. "[It] allows us to expand into faster-growing spaces such as organic and functional food ... [advancing] our strategic imperatives around real food, transparency, sustainability and health and well-being.
The acquisition will "further Campbell’s efforts to drive innovation in health and well-being to reinvent the center store, while giving the company more access to natural and organic customers and channels," according to the release.
Organic food is an $11 billion category in the U.S., having grown at a compound annual growth rate of 15.3% over the last four years, according to IRI.
Pacific Foods will become part of Campbell’s Americas Simple Meals and Beverages division, which encompasses Campbell’s soup, simple meals like Swanson and Prego, and shelf-stable beverages including V8 and Plum Organics. Led by president Mark Alexander, the division has units in the U.S., Canada and Latin America.
Founded in 1987 in Tualatin, Oregon, Pacific Foods has approximately 540 employees and operates a certified organic plant. The company will maintain its farm-to-table approach with current CEO and co-founder Chuck Eggert remaining an ingredients supplier through his family farms.
Campbell plans to invest in the Pacific business by expanding distribution, boosting marketing support and investing in R&D and the supply chain.
The deal marks Campbell’s fifth acquisition in the last five years, following Bolthouse Farms in 2012, organic baby-food maker Plum and biscuit company Kelsen in 2013, and fresh salsa/hummus manufacturer Garden Fresh Gourmet in 2015. The acquisitions are dedigned to help Campbell diversify its portfolio in response to increased consumer interest in health and well-being.
To the same end, Campbell launched a new line of healthier soups called Well Yes! at the end of 2016.
Campbell Soup Co. ranked 64th on CGT's list of the Top 100 Consumer Goods Companies for 2016.