CAMDEN, N.J. — Previous acquisitions, some of which did not turn out as planned, should provide lessons for the Campbell Soup Co., focused on the integration of Snyder’s-Lance, Inc. Acquired in March, Snyder’s-Lance so far has performed better than Bolthouse Farms, which Campbell Soup acquired in 2012 and now plans to sell, and Garden Fresh Gourmet, which Campbell Soup acquired in 2015 and now plans to sell.
“The team is applying the hard lessons we’ve learned from previous acquisitions,” said Keith R. McLoughlin, interim president and chief executive officer of the Campbell Soup Co., in an Aug. 30 earnings call. “We have established a robust governance structure, rigorous targets and a disciplined system for tracking synergy goals. It’s early, but based on what I’m seeing, I’m confident in the results and the team’s ability to deliver the synergies and drive growth.”
Mr. McLoughlin said Campbell Soup expects to fuel growth in its snacks business through six brands: Goldfish, Pepperidge Farm cookies, Snyder’s of Hanover, Kettle and Cape Cod chips, and Late July. The latter four brands were part of the Snyder’s-Lance acquisition.
“These (six) brands will drive approximately 70% of our growth,” Mr. McLoughlin said. “Our plan builds upon a proven model that we have successfully deployed within Pepperidge Farm focused on consumer insights, meaningful innovation and strong marketing to drive share gains. We are taking targeted action around each brand, such as increasing manufacturing capacity and investing in innovation, marketing and e-commerce to drive growth. We will focus nearly 80% of our snacking marketing investment in these power brands to support our growth plans.”
Snyder’s-Lance became part of Campbell’s Global Biscuits and Snacks segment, which had operating earnings of $540 million in the fiscal year ended July 29, up 17% from $463 million in the previous fiscal year. Sales were up 31% to $3,499 million from $2,667 million.
Companywide, Camden-based Campbell Soup had net income of $261 million in fiscal 2018, or 87c per share on the common stock, which was down 71% from $887 million, or $2.91 per share, in the previous fiscal year. Net sales rose 10% to $8,685 million from $7,890 million. The recent acquisitions of Snyder’s-Lance, Inc. and Pacific Foods of Oregon provided an 11 percentage point benefit.
Besides providing financial results, Campbell Soup executives also detailed the company’s future strategy. Campbell Soup will focus on two businesses within the North American market: Campbell Snacks and Campbell Meals and Beverages, Mr. McLoughlin said. The company also will pursue the sale of its International business, which includes Arnott’s and the Kelsen Group, and its Fresh business, which includes Bolthouse Farms, Garden Fresh Gourmet and the refrigerated soup business.