- Campbell Soup gained two points in share of U.S. soup retail sales in its fourth fiscal quarter versus the previous year, with a 16% jump in consumption compared to two years ago, and a 21% increase in ready-to-serve consumption over this same timeframe, the company reported in its latest earnings call. This reflected gains across its soup portfolio, including its condensed soups and Swanson, Well Yes and Pacific Foods brands.
- The gains in soup countered an otherwise challenging quarter for Campbell Soup, which saw an 11% drop in net sales — slightly less than analyst estimates. Campbell was pressured by higher costs, supply chain challenges and labor shortages, and unfavorable comparisons to its pandemic-fueled fourth-quarter 2020 performance.
- Positioning itself to take advantage of health and wellness trends that caught fire over the past year, Campbell Soup highlighted its latest innovations in the soup segment, including additions to its better-for-you Pacific Foods and Well Yes lines, and work to clean up labels, improve product quality and refresh branding.
During the company's earnings call, Campbell Soup CEO Mark Clouse described 2021 as a "little bit of a tale of two halves," with a better sales picture expected for the future. "With COVID resurgence, I think some of the consumer dynamics that supported demand is likely going to be with us for a while longer," he said.
This includes the continuation of homebound eating as the delta variant keeps many consumers from going out to eat. According to The NPD Group, 86% of consumers sourced their meals from home during the pandemic, compared to 83% in 2019. While restaurants have regained some meal occasions over the past several months, the consumer insights firm believes "home-centric eating behaviors" could last.
Clouse noted that as Campbell Soup was able to work out kinks in its supply chain in its most recent quarter, it saw household gains in its ready-to-serve soup compared to the prior year "as a result of the shelf recovery and favorable at-home consumption behaviors, particularly for lunch occasions."
One factor driving the double-digit growth in consumption for the segment is brand relaunches, new products and more focused consumer targeting. Campbell's Well Yes line debuted five years ago as a better-for-you option with lean protein, grains and vegetables. This past October, the company announced it had reformulated the product line to include on-trend ingredients like bone broth, cauliflower and chickpeas. Clouse also highlighted the latest brand extension: Power Soup Bowls, which include five varieties that target lunch and snack occasions.
Clouse also noted that Pacific Foods was solidifying its top ranking among organic soup brands, marking its seventh straight quarter of share gains. "We expanded distribution and have recovered the majority of our supply while bringing in more millennials to the category than any other soup or broth brand," he said. The line recently added plant-based varieties, including oat milk-based soups and creamy vegan protein-enriched broths. And in July, Campbell debuted updated labels for its more than 120-year-old, iconic Campbell Soup brand.
This ability to grow during the upheaval of the past year and a half is a promising reversal of fortune for Campbell's soup business, which was targeted for an extensive overhaul in 2019. At that time, sales were flat or declining across its different soup segments, with startups and private-label brands picking off share. The pandemic has helped revive and drive a reinvention of the category — one that could have staying power through the months and years ahead.