BOCA RATON, FLA. — A year after Campbell Soup Co. decided to combine its various global baking businesses into a single segment, the division is well positioned to become a more prominent presence in the cookie and cracker market worldwide, including China, said Denise Morrison, president and chief executive officer.
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| Denise Morrison, president and c.e.o. of Campbell |
“With our new organization structure in place and experts in category development, digital and consumer marketing, we are poised to claim a greater share of the $92 billion global biscuits category,” she said. Ms. Morrison and Anthony DiSilvestro, senior vice-president and chief financial officer, spoke Feb 17 at the Consumer Analyst Group of New York conference at the Boca Raton Resort and Club. Both executives discussed the Global Biscuits and Snacks Division, which in the United States includes the Pepperidge Farm, Inc., Norwalk, Conn., business.
Mr. DiSilvestro noted that combined, the businesses account for about 30% of Campbell Soup sales.
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| Anthony DiSilvestro, senior v.p. and c.f.o. of Campbell... |
“Global Biscuits and Snacks unites a number of iconic brands, Pepperidge Farm in the United States; Arnott’s, the No. 1 biscuit brand in Australia and New Zealand; and the Kjeldsens business, which extends our geographic reach into China. This division contributed one-third of company sales and 28% of operating earnings on a 15% margin.
“In Global Biscuits and Snacks, we will invest to grow our business in our existing markets principally Arnott’s in Australia and Pepperidge Farm in the United States. We will expand our business internationally in developing markets like Indonesia and China where we have small businesses today.”
Ms. Morrison highlighted the potential for the business to grow in China.
“While it is a small part of our business today, China represents a significant growth opportunity for Campbell over time,” she said. “China’s $10 billion biscuit category is growing at nearly 9% despite the current economic slowdown. Since our 2013 acquisition of the Kjeldsens Group, we have made the expansion of this business a key priority.
“We have just completed our biggest season, the traditional gifting season leading up to Chinese New Year.
“Looking ahead, we are beginning to increase our e-commerce activities in China. This represents a significant opportunity for our advantaged biscuit and snack brands, including the Kjeldsens portfolio, Goldfish and Tim Tam. China has more than 600 million Internet users and nearly 50% of them shop on-line.”
E-commerce in China is larger and faster growing than it is in the United States, Ms. Morrison said. It accounted for about 13% of total retail sales in 2014, a figure expected to climb to 20% by 2019.
“As we build capability, the breadth and accessibility of e-commerce platforms in China will be instrumental to our growth as we stretch into new cities across the southern and eastern provinces and establish go-to-market plans for our priority global biscuit brands,” Ms. Morrison said.
The increasing importance of digital at Campbell Soup will not be limited to the company’s China business. Ms. Morrison described digital as one of three “seismic shifts” the food industry is facing, together with the changing economic landscape in the United States and sweeping demographic changes. The increasing impact of smart phones and other mobile devices will be particularly important, she said.
“We live in an on-demand, always on network world where information and commerce are a swipe away,” Ms. Morrison said. “Technology has been altering the marketing landscape for some time and e-commerce continues to grow as consumer demand for new delivery models for everything from electronics to clothing to food exists. But the real game changer in this space is mobile. The number of mobile devices in the world from tablets to smartphones now exceeds the number of people on the planet. As a result, consumers’ ability to access information, communicate and make transactions has never been easier.
“Industry watchers expect total mobile commerce to reach nearly $150 billion in the U.S. by 2019. This explosion of mobile devices is replacing the traditional shopping process with an individualized more automated experience. With helpful suggestions built in along the way, they send consumers social media interest and search patterns. Right now empowered consumers can order almost anything on-line and have it delivered the very same day.
“Beyond convenience and ease of use, digital continues to drive consumers' veracious appetite for information. People want to know how and where their food is made. People want transparency and for consumers, there is no middle ground. Your company is either transparent or it is not.”
