Red alert: the soup's back on

Prepared Foods, Sept, 1997 by Steve Dwyer

A couple years ago, top officials at Camden, N.J.. based Campbell Soup Co. reached a conclusion that one of its old, venerable brands - Pepperidge Farm - had lost its "Main Street" identity.

Pepperidge Farm's marketplace retreat was a humbling wake-up call. Dale Morrison, Campbell Soup's newly-installed president and CEO - he replaced David Johnson in July - and the Pepperidge Farm chief at the time, recalls the marginal shape of the business this way: "Pepperidge people had lost confidence - they had not won in quite a while."

What transpired throughout the 1990s at Campbell Soup corporate-wide was not unlike the dilemma dogging its Pepperidge Farm operating unit - only on a larger scale. Campbell, too, had reined in brand-building, starting with the marketing investment behind its top treasured icon - red & white label condensed soup.

Working independently to jump-start top-line growth of the respective companies, Johnson and Morrison discovered the true meaning of "connected leadership." While spearheading the brand-building initiative at Campbell, Johnson, now Campbell's chairman, saw the eye-popping results at Pepperidge - sales of which increased 10% in 1996 over typical growth of 2% a year - and decided to fuse the best elements of that with his Campbell initiative. What resulted was Campbell's Strategic Growth Plan of 1996 - the quest to move from the "Best in Class" to the "Best in Show."

Yes, brands are reborn at Campbell Soup Co., with an assist from Pepperidge. If the company could flourish financially without brand cultivation - as it has over the years - it's astounding to think where Campbell will end up after a full-fledged brand building program.

Campbell Soup sales exceeded $7.6 billion in 1996, a 6% increase, and are expected to approach $8 billion this fiscal year. Earnings surged 15% to a record $802 million. For the past six years, Campbell has been the top food company in terms of earnings growth.

The company packs a full stable of diverse, powerhouse brands, including red & white label soups, V8 vegetable juices, Prego pasta sauces, Swanson frozen products, Pace salsas and condiments, Godiva chocolate and Franco-American canned pastas.

"As I looked at the strength of Pepperidge and the modest investment being made against it, what it spelled for me was opportunity," states Morrison, 48, and a veteran of such companies as PepsiCo and General Foods. "We created enablers to allow us to invest in brands underneath that umbrella. We revamped the business formula, incorporated a new frame of reference, and placed the emphasis not on the bottom line but on the business itself."

The new innovation formula also begat V8 Splash - a drink combining carrot and tropical fruit juices that provides 100% of a person's daily requirements for vitamins A & C. How well-received has it been? Even before an advertising campaign kicked off in August, Splash has sold $1 million of product a week since June.

But, quick, when one thinks of Campbell, what word reflexively follows? Soup of course. As Morrison charts the company's course into the next century, it's the soup business, rife with opportunity, that will be out front and center.

"If you look at the U.S. soup business, you could say we have an 80% share of the condensed and ready-to-serve market, and where do we go from there? But if you look at soup consumption in total, bringing in homemade, dry and wet consumption behavior, we really have a 38% share. Under that frame of reference, there's a real opportunity," explains Morrison.

Campbell Soup is looking at all aspects of its operation through this perspective. On the international front, Campbell is moving the company's most senior management overseas for the first time to head new regional operations in Europe and Asia. Previously, individual businesses in each country reported to Camden - hardly the nerve center for international pulse-reading.

"I've concluded that we will never have an understanding of our international customers or consumers with a Camden vantage point," asserts Morrison.

Campbell's new business formula inspired more than brand-building, but brand-creating. One of the most innovative new products of the year, Campbell's Intelligent Quisine frozen entrees, breakfast and snacks, has been showered with bouquets since its January test-market introduction in Ohio.

Awash In Soup

Last year's new-soups introduction - 19 new products in all - represented the largest one-time soup rollout in Campbell's storied 128-year history. They included two new CHUNKY soups; several new 98% Fat-Free cream soups; a line of Healthy Request Creative Chef soups; a line of seven Baked Ramen Noodle soups and one new Home Cookin' soup - Creamy Potato. In its condensed segment, Campbell added 33% more meat per serving to Chicken Noodle - a strategy that increased sales 19% in 1996.

Not to be outdone, Campbell's Restaurant Soup, a product of the foodservice group, hit supermarket freezer case shelves last November. Then there's the recently introduced ready-to-serve Joseph A. Campbell's soup in glass jars. The first premium entry in the wet soup segment was intended to grow the market and improve the quality of store-bought soup. The product reached $20 million sales in half a year.