Campbell's outlines 4 growth platforms in next decade

The Campbell Soup Company President & Chief Executive Officer Denise Morrison and Senior Vice-President & Chief Financial Officer Anthony DiSilvestro provided an overview of the company’s strategic direction during the Consumer Analyst Group of New York (CAGNY) Conference on Feb 22.

Morrison shared her perspective on the state of the food industry and the consumer environment, and highlighted the steps the Campbell Soup Company is taking to define the future of real food through strategic foresight.

“The future food world will be more complex and more challenging. To fully unlock Campbell’s performance, we're looking beyond typical five-year planning horizons and establishing well-informed perspectives on opportunities and disruptions driven by the intersection of real food, health and well-being and technology,” said Morrison.

Morrison focused on four emerging growth platforms, namely:

1. Future Commerce

E-commerce is transforming the food industry. Between 2016 and 2021, e-commerce sales of food and beverage are projected to reach US$66 billion with a compound annual growth rate (CAGR) of 38 % [Proprietary Campbell Estimate]. Morrison painted a picture of frictionless future commerce, where consumers’ food needs will be met anywhere, anytime through connected kitchens and an always-on shopping environment.

Morrison outlined Campbell’s current programs and plans such as meal kits, buy-now capabilities, recipe integration with leading recipe sites, and dash buttons, as well as the company’s focus on increasing its e-commerce capabilities as consumer expectations shift from centralised locations and platforms to diverse omni-channel experiences.

2. My.Moments

Campbell recognises a growth opportunity to expand its business in snacking across many of its categories. Snacking is a US$89 billion market in the US, with a CAGR of nearly 3% [Nielsen Scantrack Data 2015]. While more than two-thirds of snacks are of the “mindless munching” variety, the snacks of tomorrow will be more deliberate with a specific purpose — they will be more accessible, affordable and high-quality, and they will be both customisable and offer functional benefits.

Campbell’s longer-term plans under its My.Moments platform include adding functional benefits to its existing snacks, while also selecting real food ingredients that can address specific needs such as endurance, and mood and energy management, with the goal of creating new snacking platforms true to the company's purpose: Real food that matters for life's moments.

3. Better.Me

The next frontier in nutrition will be about reconfiguring diets according to an individual’s specific physiology, lifestyle and health goals. The Better.Me platform leverages biometric data to provide personalised food options.

To meet this emerging need, Campbell funded Habit, a new start-up company positioned at the intersection of health, technology and food, poised to lead the personalised nutrition revolution. Habit is being tested in the Greater San Francisco area.

4. Limitless Local

Limitless Local is a movement that embraces smaller, more regional farming and food production models that foster new narratives around quality, community and place. Moreover, it fosters a more intimate relationship with food including where it comes from, how it’s made and who the people behind it are.

Campbell is incorporating Limitless Local in its product development with brands such as 1915 by Bolthouse Farms, Well Yes! soup, and Prego Farmers’ Market, as well as small-batch production of one of the company’s original tomato soup recipes using local New Jersey beefsteak tomatoes. Campbell’s history of working with American family farmers for more than a century and its rich heritage of making simple, affordable and delicious foods uniquely position the company to leverage this growth platform.
“If you look closely at the 148-year history of Campbell, we are not only a company that has proven ourselves capable of dealing with profound change. We are a company with a history of leading profound change, and we are a company that has thrived in periods of profound change. I’m confident that we can and will do so again in the future,” said Morrison.

Reinvesting cost savings

DiSilvestro said that Campbell’s multi-year cost savings programme will generate savings in excess of US$300 million and, with additional areas of savings opportunity, the company’s aggregate savings target is expected to increase to US$450 million by the end of fiscal year 2020. Cost savings to date have contributed to recent margin expansion and funded reinvestments in the business.

“Our strategy is to reinvest a portion of these savings in order to drive growth. We'll do this a number of ways including increasing marketing support on our key brands, funding new product launches and investing against our real food initiative; making investments in long-term innovation; focusing on geographic expansion in faster-growing spaces; and building our capabilities in digital and e-commerce,” he said.