In its ongoing scramble to keep up with consumers — including the folks who ride its elevators — eschewing salt, GMOs, dyes, added sugars, unpronounceable additives and the middle aisles, Campbell Soup yesterday said it is putting $125 million into a Delaware-based limited partnership, Acre Venture Partners L.P., that will invest in food startups.
The plan was revealed at the annual Consumer Analyst Group of New York conference where Campbell CEO Denise Morrison told attendees that “the food industry is in a time of revolution” — a theme that has been driving her leadership of the company.
“We recognized that people, even our own employees, are questioning food,” Morrison said, John Kell points out for Fortune. “She said consumers want to know how their food is grown, why certain ingredients are used, and whether they come from a sustainable source.”
Acre “will be independent of Campbell and managed by unidentified outsiders, though Campbell is its sole limited partner,” reports Harold Brubaker for the Philadelphia Inquirer. “The firm's representative on the investment committee of Acre will be Jeff Dunn, who heads Campbell Fresh, a new division that includes Bolthouse Farms, refrigerated soups, and the recently acquired Garden Fresh Gourmet.”
In an interview with the Wall Street Journal’s Annie Gasparro, “Morrison said Acre is a new model for innovation to help the 145-year-old soup-and-snacks company keep pace with what she calls a seismic shift taking place in the food industry. … Morrison said e-commerce and the increased availability of food manufacturing lines have lowered the barrier of entry for startups. These smaller companies have largely responded faster to consumers’ demand for transparency as to what is in the food, and other trends like simpler and fresher ingredients,” Gasparro writes.
“There’s an easier infrastructure that enables smaller brands to get started,” Morrison says.
“While the figure that Campbell announced on Wednesday sounds large, it is important to note that investments or acquisitions of smaller food brands can come at a lofty price,” Fortune’s Kell writes. “Campbell itself paid over $1.55 billion to acquire Bolthouse Farms juice business and $231 million for salsa maker Garden Fresh Gourmet in two separate transactions.”
Campbell #CEODenise reiterated the company’s recent call for mandatory national GMO labeling at the conference as well as on Twitter. And it says in a release previewing the CAGNY presentation that “in an effort to set the standard for transparency in the food industry,” it has launched www.whatsinmyfood.com. (Somehow, even Goldfish crackers seem as downright healthy as chia seeds, baked, as they are, “with smiles and ingredients” that fellow parents “can feel good about.”)
Morrison also revealed that the company “will launch 14 new products (beverages and dressings) from its Bolthouse Farms better-for-you brand” this spring and “is expanding its new 1915 organic fresh pressed juice brand, unveiling six new items later this year including its first plant-based protein drink,” Brian Sozzi reports for The Street.
A webcast of the entire CAGNY presentation is available here.
The company last year underwent a companywide restructuring to consolidate its portfolio, align its business strategies, drive investment in opportunities such as its packaged fresh division — all while reducing costs, the Philadelphia Business Journal’s Kenneth Hilario reminds us.
“At last year's CAGNY, Campbell's said its reorganization would save the company $200 million a year, or 2% to 3% of its annual sales, using a zero-based budgeting methodology,” he writes. “CEO Anthony P. DiSilvestro said Wednesday the company is now ‘experiencing cost savings higher than anticipated,’ and has now increased its savings target to about $300 million a year. Campbell's previously announced it would save $250 million a year.”
But, points out Jessica Wohl for Ad Age, “even as the company has been updating its product lineup, it expects its sales this fiscal year to be down 1% to flat. Still, that would be an improvement from a 2% decline in fiscal 2015 which stemmed in part from having one less week than fiscal 2014.”
“Listen, if you apply the Andy Warhol filter to our company, if you view us strictly through the lens of the iconic can, then you're completely missing the big picture,” Morrison said.
Other brands currently under the Campbell umbrella are Pepperidge Farm, Arnott’s, V8, Swanson, Pace, Prego, Plum, Royal Dansk, and Kjeldsens. Soups now constitute 34% of its business, down from 40% when Morrison took charge in 2011, Wohl reports, with “cookies and other snacks at 31%, simple meals at 21% and beverages at 14%.”
One thing seems certain: the ingredients of that pie will become fresher and more transparent as long as Morrison is at the helm.