Campbell’s Acquires Sovos Brands
Campbell Soup Company announced the acquisition of Sovos Brands, a manufacturer of Italian sauces.
With annual adjusted net sales of $837 million in 2022, Sovos Brands delivers a variety of premium products, including dry pasta, soups, frozen entrees, frozen pizza, yogurts, and pasta sauces under the brand names Michael Angelo's, Noosa, and their flagship brand, Rao's, which accounted for 69% of Sovos Brands adjusted net sales in 2022.
Mark Clouse, president and CEO of Campbell Soup Company, said in a statement that the acquisition fits with the company's game plan of homing in on one geography, two divisions, and key, well-known categories.
The company says the acquisition will overdeliver on Campbell's strategic goal of creating a $1 billion sauces business and enhancing shareholder value through sales growth, cost synergies, and EBIT acceleration while relying on Campbell's supply chain scale to drive operational synergies, enhancing geographic footprint, sub-category penetration, and shelf productivity.
"We have built a one-of-a-kind, high-growth food company focused on taste-led products across a portfolio of premium brands, anchored by the Rao's brand," said Todd Lachman, founder, president, and CEO of Sovos Brands. Lachman also said the transaction is expected to result in a 92% increase from the brand's 2021 IPO price.
Campbell Soup Innovation
The acquisition marks another move in its growth strategy. In 2021, Campbell's combined an AI-infused insights engine with its internal incubator to shorten the time it takes to bring products to market. The innovation leverages machine learning and artificial intelligence to scan approximately 300 billion data points to provide insights to expand its innovation strategies and its internal incubator program, Campbell's Maker.
