• by Steve Ellwanger , September 3, 2019

Having instituted a strategy of two core businesses -- snacks and meals/beverages -- Campbell Soup Co. is entering the second year of a three-year plan that puts a lot more focus on product innovation, particularly in its soup lines.

Campbell is nearly finished divesting some $3 billion in unwanted businesses, including its international holdings and Campbell’s Fresh, an acknowledgement that it had spread itself too thin and needed to return to its core North America roots and products.

Front and center are sauces and soups, plus its V8 beverages, with plant-based ingredients and proteins high on the list of planned innovations.

Most of the good news in Campbell’s fourth quarter and fiscal 2019, which  ended Aug. 30, resided in snacks, which post-divestitures will represent roughly 50% of the company’s overall business.The majority of its snack brands, including Goldfish, Milano and the recently acquired Snyder’s/Lance products, grew or maintained their market share during the quarter.

On the meals/beverages side, Campbell for many years had concentrated on driving profits and cutting costs “at the expense of the investment we may have needed” in things like product innovation, CEO and President Mark Clouse said at an investor presentation in June.

Dollar sales in the U.S. wet soup category declined by 1.5% for the 52 weeks ended July 28, according to IRI. Campbell’s sales declined 3.7% while private label grew 5.9%.

Addressing the soup brands, Clouse elaborated on the company’s strategy in a recent investor update. “We’ll be injecting much-needed investment in the businesses across quality, marketing and selective merchandising, including returning our highly relevant Pacific brand to growth,” he said. The four core SKUs that Campbell is focused on are cream of mushroom, cream of chicken, chicken noodle and tomato.

In the fourth quarter, Prego regained its #1 position in the pasta sauce category. “We've got a tremendous formula we have created that uses plant-based protein for a meat sauce or a marinara sauce,” Clouse explained. “So the opportunity to be in market with something truly differentiated, and then to adequately support both the base and the innovation, is really what the plan looks like for Prego going forward.”

Things have not been as rosy for V8 — and, in particular, V8 Splash, which has been responsible for the continued sales decline of the V8 portfolio. Campbell intends to reshape the V8 business around the growing consumer demand for plant-based ingredients because “V8 was plant-based before plant-based was cool,” Clouse said in June. “Our opportunity here is to really focus on what's been working, which is around single serve... as a delivery for the benefits of V8, [which] are quite powerful.”