Dive Brief:
- Campbell Soup Co. is now another center-of-store products manufacturer to implement a cost-cutting program due to lagging sales in that area of its portfolio. The decreased sales are mainly due to consumers' concerns about "effects of food on their health and well-being and mounting demands for transparency from food companies," said Campbell CEO Denise Morrison.
- The initiative includes a target of $200 million carried out over three years, which will include cutting excess management and pursuing a "zero-based budgeting" strategy, according to Campbell, which means all expenses are to be accounted for in each department.
- The announcement follows a recent shakeup at Campbell that resulted in three divisions, meant to simplify organization and operations. Campbell is also turning toward focusing on its fresh, perimeter food products.
Dive Insight:
Campbell isn't the only major food manufacturer to report new cost-cutting measures. Coca-Cola Co. responded to sagging soda sales by announcing in October it would cut about $3 billion in costs per year through 2019. In September, General Mills said it would cut about $100 million in operating costs after disappointing earnings, though the company didn't specify where those cuts might come from. That followed another announcement in an earlier quarter to cut around $40 million from its North American manufacturing and distribution operations due to decreasing sales. In short, Campbell isn't alone here.