• by Sarah Mahoney  @mahoney_sarah, June 2, 2025

American consumers are cooking at home more, giving Campbell’s soups and sauces a boost. But they’re also snacking less — or at least more selectively — dragging down sales in key snack brands. That divide defined the Campbell Co.’s latest results, revealing just how tricky it’s become for companies to decode shifting appetites.

In announcing third-quarter earnings, the company said total sales rose 4% to $2.5 billion, powered by its acquisition of Sovos Brands, including Rao’s tomato sauces. Without that deal, sales were up just 1%. Net income dropped to $66 million from $133 million.

While some meal-oriented brands are gaining ground — including Rao’s, Chunky, Pacific Foods organic soups, and Homestyle ready-to-eat soups — Campbell’s snack portfolio continued to slide, down 8% to $1 billion. That includes a 5% organic decline as shoppers bought fewer Goldfish crackers, Snyder’s pretzels, Late July tortilla chips, and Lance sandwich crackers.

CEO Mick Beekhuizen said the company began noticing changes in consumer behavior back in January. “A key outcome is a growing preference for home-cooked meals, leading to the highest levels of meals prepared at home since early 2020,” he told investors. “Additionally, consumers are favoring ingredients that help stretch tighter food budgets. And they’re increasingly intentional about their discretionary snack purchases.”

That intent showed up clearly in Campbell’s meals and beverage division, where net sales jumped 15% , or 6% excluding the Rao’s acquisition. U.S. buyers stocked up on condensed soups, broth, and ready-to-serve options. Six of eight leadership brands in the division gained or held market share. Wet soups marked a sixth straight quarter of volume-share growth, with increased appeal among younger consumers.

Rao’s continued to outperform category peers but still missed internal expectations. Beekhuizen said the brand has room to grow in household penetration and awareness, especially compared to the company's Prego. The company plans to increase marketing support for Rao’s in coming quarters.

The snack division’s 8% decline included the impact of Campbell’s sale of Pop Secret. Even so, the drop underscores softness across the category and heightened competition. That said, not all snack brands struggled: limited-edition Milano cookies helped Pepperidge Farm bakery and cookies hold market share, and Snack Factory products gained nearly half a point, thanks in part to dual placement in the deli and snack aisles.

The company increased advertising spending by 3% compared to the prior year, and that investment is expected to continue. “While macro and competitive pressures persist, we think Campbell's is appropriately prioritizing investments to ensure its brands keep pace with evolving consumer trends,” wrote Erin Lash, an analyst who follows the company for Morningstar.

Morningstar forecasts the company will continue to allocate about 5% of sales — roughly $550 million annually — to research, development, and marketing over the next decade.

Even as tariff threats loom, Campbell’s is holding steady on its full-year forecast.