• by Karlene Lukovitz  @KLmarketdaily, January 2, 2009

Campbell Soup Company's 2008 performance was impressive by any standard, and nimble, spot-on marketing--including a feisty head-on assault on General Mills' Progresso--was critical to that success.

Along with other food and beverage companies, Campbell faced challenges that included soaring first-half commodities costs and the need to balance price increases against consumers' drift toward less expensive, private-label brands. Nevertheless, company-wide sales grew 8% to $8 billion in fiscal '08 and net earnings jumped 36% to $1.17 billion. When Wall Street reeled as the mortgage/credit crisis first hit on Sept. 29, Campbell was the only company in the entire S&P 500 to show gains.

Campbell's highly focused marketing reflects its overall strategic strengths. The 140-year-old company was ahead of the curve in positioning itself within the health and wellness zeitgeist that continues to be F&Bs main growth-driver, and it has been building on that advantage with tight concentration on three core categories: soups and other simple meals, baked snacks and healthy beverages.

Soup-wise, the company's condensed business saw some softness last year as price increases impacted volume, but Campbell responded swiftly with a multimedia campaign that reminded consumers of the iconic products' value as a nutritious, low-cost meal solution. In addition, Campbell teamed with Kraft Singles to promote soup and grilled-cheese sandwiches as the "wallet-friendly meal your family will love," using newspaper coupon inserts and cross-brand recipes on Kraft's Web site. The results: After flat performance in fiscal '08, condensed sales were up 14% in Q1 2009, including double-digit gains for both eating and cooking varieties.

But the biggest soup push was on accelerating the momentum of Campbell's low-sodium offerings. Following its taste breakthrough based on a special sea salt, low- and reduced-sodium soup sales hit $650 million in 2007 (up from $100 million in 2003). That included over $100 million in first-year sales for Campbell's Lower-Sodium Soups, which were the year's top-performing food launch, according to IRI. Furthermore, sales of Healthy Request varieties jumped about 7% last year.

Last fall, Campbell launched 44 reduced-sodium, ready-to-serve varieties under the new Select Harvest brand, plus reduced-sodium reformulations of 12 kids' soups, pushing the number of lower-sodium soup varieties to 85. And Campbell isn't through yet: more reduced-sodium soup offerings are expected in 2009.

Select Harvest's launch strategy combined classic product development with a frontal competitive attack that's still stirring up the soup marketing pot. "We did extensive market research on what our target consumer--women 35-plus--wanted from their soup, and set out to create the soup they always wanted," says Senior Brand Manager Geoff Jackson. The result was a product chock-full of natural ingredients and free of MSG, high-fructose corn syrup and hydrogenated oils, and bearing a label that makes it easy to see what's in the soup (including definitions of ingredients like maltodextrin, a carbohydrate derived from potato or corn starch).

Campbell and agency BBDO NY did not settle for merely conveying the "real ingredients, real taste" theme and showcasing the clean label, choosing instead to achieve those missions within the context of ads that went straight for the throat of Progresso, which had an out-of-the-gate hit with its 2007 launch of Progresso Light. Campbell fired the first shot last September with a print campaign showing a Progresso can with the caption "Made With MSG" next to a Select Harvest can with the caption "Made With TLC." Equally aggressive TV ads followed. Progresso, in the midst of reformulating many of its own varieties to be MSG-free, fired back with ads trumpeting that Campbell "has 95 soups made with MSG" and pointing out that Progresso "has 26 delicious soups with no MSG. (And more to come.)"

So far, it looks like the gloves-off approach is paying off for Select Harvest, whose ads are now touting it as "The #1 New Soup Brand." According to IRI, the brand (including nine light varieties) generated over $52 million in sales in supermarkets, drugstores and mass merchandisers (excluding Wal-Mart) in the first 10 months of 2008.

Other initiatives were considerably less controversial, but no less effective. The rapidly expanding V8 brand saw sales grow by double digits in fiscal '08, driven in particular by the V-Fusion line offering a full serving of fruit as well as a full serving of vegetables. (V-Fusion sales through October of last year leapt 64% to nearly $87 million, according to IRI.) The September launch of V8 Soups pushed the brand beyond beverages for the first time, and IRI's data showed sales exceeding $9 million after the soups had been on shelves for barely two months.

V8's notable recent campaigns include a "Make Every Serving Count" program with Feeding America that aims to donate 30 million servings of fresh vegetables to food pantries nationwide by contributing a portion of V8 product sales to the cause, and a "Long Live Vegetables" campaign rolled out in November. The latter features "super seniors" (an 83-year-old competitive water skier, for instance) who depend on V8 to help get their daily veggie servings.

These days, of course, all of Campbell's marketing campaigns are integrated, and a healthy serving of new media--including blogger outreach and social network presence--is de rigueur. (Messages in some of Select Harvest's advertising encouraged consumers to use cell phone texting to request a free coupon.)

Looking ahead, the company's marketing strategy will increasingly reflect its aggressive moves to employ shopper insight data to identify how consumers want to buy products, hone its in-store strategy and ultimately connect with and influence shoppers at point of sale.