According to the New York Post, Campbell Soup is reportedly having trouble divesting itself of Bolthouse Farms after announcing this past August it would sell the unit it bought for $1.55 billion in 2012 — though the company strongly denied the report. An unnamed source told the newspaper there hasn't been much interest in the predominantly refrigerated beverage business.
Bolthouse has been a disappointment to Campbell, the Post said. Consequently, the New Jersey-based company is now looking to sell its Garden Fresh Gourmet unit separately, the newspaper reported. Campbell bought Garden Fresh, which makes salsa and hummus, in 2015 for $231 million.
Campbell spokesman Anthony Sanzio strongly denied The Post's story. "This report is inaccurate," he told the newspaper. "Beyond the company and its investment banker, no source would have access to the number of potential buyers interested in these assets.” Another spokesperson, who wasn't named, reportedly confirmed Campbell is selling the two units separately but also said "strong interest" from both strategic and financial buyers had been shown in them both.
Challenges connected with produce and other fresh products could make it difficult for any company to shed such assets, so it's not surprising if Campbell really is running into obstacles with its divestment plans. Fresh produce has been linked to several foodborne illness outbreaks lately, plus weather challenges and a 2016 recall have been a particular problem for Bolthouse and Campbell. As for Garden Fresh, consumer interest in refrigerated salsa, hummus and dips hasn't seemed to reach much past its main audience in the Midwest.
Campbell was seen as stumbling as it reached to acquire more fresh brands. According to a research note last year from JPMorgan analyst Ken Goldman, "The one-size-fits-all model that works in packaged food is harder to apply to newer, artisanal products, especially in the fresh aisles of the store."
It may seem like a smart move for CPG companies to invest in fresher products since consumers increasingly want to reduce the amount of processed foods in their diet. However, large legacy firms may find it harder to adapt to the special handling fresh products require than, say, a startup company that has specialized in the category from the get-go.
There have been a few relative successes, including White Wave's purchase of Earthbound Farms in 2013 and Hormel Foods buying Applegate Farms in 2015. In January of this year, General Mills’ venture capital arm, 301 INC, led a $17-million funding round for Urban Remedy, a California-based maker of fresh juices and ready-to-eat plant-based meals. Success of that partnership may be enhanced by the presence of John Foraker on Urban Remedy's board. Foraker, who headed the Annie's brand during and after General Mills acquired it in 2014, is now CEO of Once Upon a Farm, an organic baby food company based in the Bay Area.
Campbell has been juggling several problems lately. Former CEO Denise Morrison suddenly decided to retire in May, and activist investor Daniel Loeb — whose Third Point hedge fund recently increased its stake in the company to nearly 7% — has been agitating for change. An agreement between the two parties last week averted a complete board turnover, and Campbell agreed to add two Third Point nominees to its board and expand it from 12 to 14 members.
As rumors swirled about the possibility of Campbell Soup selling the whole company, Kraft Heinz was mentioned as a potential suitor — although the Chicago-based firm was reportedly not interested in the prospect. More recently, Campbell was said to be in talks with Jeff Dunn, the former CEO of Bolthouse, about selling the Fresh division. But if the two units are now being offered separately, it's not clear whether Dunn remains in the picture.
Still, if Campbell does manage to sell off both Bolthouse and Garden Fresh, it will be left with its core operations in soups and snacks — probably a benefit when it comes to focus, but maybe not when it comes to diversification.