Campbell Soup Undertakes Strategic Reorganization
Campbell Soup Company this month unveiled a strategic reorganization that included naming Luca Mignini chief operating officer and creating a new accelerator unit to drive growth in targeted segments. In recent years, the company has experienced a number of unprofitable quarters.
As COO, Mignini will oversee soup, simple meals and the shelf stable beverages and snack portfolios. These are additional responsibilities for Mignini, who had been serving as president of global biscuits and snacks.
The new accelerator unit will encompass the Campbell Fresh business under a plan to realize growth potential in the packaged fresh category. The unit will also oversee long-term innovation, small brand incubation, future customer experiences, e-commerce and new distribution models. It includes a network of cross-functional teams structured to act quickly when growth priorities arise.
These moves are intended to better position the Camden, NJ-based company in the changing food market and better align it with its three growth strategies: optimizing the value of its core, offering more health and well-being products, and accelerating distribution and new business models.
“The strategic organization provides the right structure to optimize the value of our businesses while creating future-oriented capabilities,” said chief executive officer Denise Morrison. “It will simplify operations, improve execution and enable us to allocate resources with a greater focus on profitable growth.”
The accelerator model concept, she added, will eventually be applied to other business areas. “Campbell’s accelerator unit is designed to drive growth and build critical capabilities with an agile and dynamic operating model that, over time, will expand to other parts of the company and become the way we work.”
In recent years, Campbell has faced a number of challenges; it has also made other changes and acquisitions. After hitting a high of $67.10 in July 2016, its stock price has experienced numerous peaks and valleys. On April 9, it stood at $43.26.
In late March, Campbell acquired Snyder’s-Lance in an effort to beef up its snacking business. The rapidly growing snack category is valued at $89 billion. In its largest-ever acquisition, Campbell paid $5 billion for Snyder’s-Lance, which some analysts said was too much. Snyder’s-Lance’s brands include Pop Secret, Kettle, Cape Cod and Emerald nuts.
With the acquisition, soup, which comprised 35% of Campbell’s sales, dropped to 27%, while snacks went from about one-third to almost half. The $4.5 billion U.S. canned soup industry has been flat since 2012, said CNN.com. Campbell already owns popular snack brands like Goldfish crackers and Pepperidge Farm. The Snyder’s-Lance acquisition also gives it a larger convenience store presence.
Campbell also purchased Garden Fresh, maker of refrigerated salsa, hummus and dips, in 2015. Campbell has had difficulty expanding that brand’s penetration beyond its core Midwest market.
In March, Campbell announced that Mark Alexander, president of America's simple meals and beverages, would leave the company on April 2 “to pursue other opportunities.” Alexander, who was with Campbell almost 29 years, has led both developing and emerging markets businesses, including operations in Asia Pacific, Australia, Europe and North America.
In announcing his departure, Morrison called him an “influential leader.” The simple meals and beverage division includes retail and foodservice businesses in the U.S. and Canada, including Pacific Foods, which Campbell acquired in 2017.
Also in March, Campbell secured a new marketing agency, Publicis Groupe, in an effort to “modernize” amid growing competition. Publicis Groupe will be Campbell's agency partner for U.S. retail, Canadian and Asia Pacific creative, digital, technology and consumer promotions activity. The move also consolidated Campbell’s agency roster under one roof, which the company said would make it more competitive.