If you’ve got a hammer, they say, everything looks like a nail; if you make soup, everyday’s a soup day, even if the weather suggests iced tea. And so it was in Camden, N.J., yesterday, where Campbell Soup Co. Investor Relations vp Jennifer Driscoll opened a newsy 2012 Analyst Day session by quipping that the looming 90-degree temperature was "good soup-eating weather," as Philadelphia Inquirer columnist Mike Armstrong reports.
But while soup and simple meals are "a powerful, valuable engine," as CEO Denise Morrison puts it, "by itself, it cannot take us where we want to go."
In fact, there will be 50 new products in Campbell’s U.S. Simple Meals business in fiscal 2013, ranging from new varieties of Chunky and Condensed soups to the new Campbell's Go platform and Campbell's Skillet Sauces, a release reveals. The company will also be integrating Bolthouse Farms products into the extending family, and will be introducing the first extensions to its V8 vegetable juice line in nearly 10 years.
“Expect more innovation from V8 next year: juice boxes, iced tea, sparkling drinks all on tap,” @CampbellSoupCo tweeted yesterday.
The new Go Soup “platform” clearly is not going to be a repackaging of your momma’s Condensed Chicken Noodle. And it’s aimed at well-considered new target: Millennials -– roughly those born between 1982 and 1995.
“Campbell Chases Millennials With Lentils Madras Curry,” reads the hed over David Welch’s story on Bloomberg. When the line rolls out next month, bearing a hefty $2.99 price tag per each fuchsia-and-white pouch, it will include such offerings as Chorizo and Pulled Chicken with Black Beans, as well as Moroccan Style Chicken with Chick-Peas and Coconut-Curry Chicken.
Millennials “have a "taste for culinary adventure and variety," CEO Morrison said during the webcast. "We know they often combine foods typically served at breakfast, lunch or dinner into a single-meal occasion and often eat meals as snacks and while on the go."
“I'm not sure these concoctions are that different from Campbell's late-lamented Pepper Pot Soup, made from tripe,” quips Armstrong. “Talk about adventure.”
Consultant Ken Harris is more worried about the price. “If they sold it for 99 cents, they would have a runaway success,” he tells Welch. “But for that buyer group, paying extra for an accompaniment to a meal may be a stretch.” Jeffries analyst Scott Mushkin, however, feels “they will pay for the product if it is positioned right.”
Darren Serrao, vp of innovation for Campbell’s North American business, proffers that Millennials are “foodies” to the core and Chuck Vila, Campbell’s vp of consumer insights, points out that college campuses are surrounded by restaurants from many different cultures and younger consumers are not only “culturally connected” but “more experimental” than their Boomer parents.
Ad Age’s E.J. Schultz led with the news that Campbell will trim its marketing budget this coming year and take a “more holistic approach” by “putting new emphasis on distribution, merchandising and product innovations.” Campbell stanched its heavy discounting in fiscal 2012, “when marketing got a chunk of $100 million of new investment the marketer plowed into brand-building, research and development and innovation for its U.S. soup and simple meals business,” Schultz writes.
"We over-corrected in the transition from trade spend to advertising and it didn't work,” according to Morrison. “As a result, the increase spending did not generate anticipated consumption lift."
CFO Craig Owens says the cutbacks will be modest.
Campbell also is adding new varieties to its $522 million Chunky brand. A revival of its "Mama's Boys" campaign will feature New York Giants charismatic receiver Victor Cruz as the line seeks to recapture its "manly position," it says in its release.
"For a few years we lost sight of what our target consumer was really looking for, placing too much emphasis on things like lean meat protein and not focusing enough on taste and hardy ingredients," according to Mark Alexander, president-Campbell North America.
Campbell also will be expanding into produce sections with its pending purchase of Bolthouse Farms for $1.55 billion in cash, adding refrigerated fruit and veggie juices and baby carrots to its portfolio of canned soups and V8 vegetable drinks. It’s moving into “an area of the supermarket that gets more foot traffic than the center of the store, where most of Campbell's existing products are,” as Reuters' Martinne Geller points out.
Presumably, it’s also a better place to catch one of them there Millennials grazing for an organic Jazz apple.
Ken Harris is missing the point. For Gen Y consumers the choice is eating at home versus eating out. So even at $2.99 a serving Go Soup will be a bargain. If the varieties are tasty, they should be a big hit.
Here's what my mostly Gen Y students had to say on the subject of cooking when asked...