Campbell pursues divestiture of Fresh business; refocuses on snacks, meals and beverages
Campbell Soup Co. has announced significant actions it is taking as part of its board-led strategy and portfolio review to improve performance and drive shareholder value.
Campbell Soup Co. has announced significant actions it is taking as part of its board-led strategy and portfolio review to improve performance and drive shareholder value. The actions include:
- Focusing the company on two distinct businesses, Campbell Snacks and Campbell Meals and Beverages, in its core North American market
- Pursuing the divestitures of non-core businesses to focus and improve the company’s portfolio
- Increasing its cost savings target to $945 million by 2022
“Campbell’s board of directors considered a full slate of strategic options, including optimizing the portfolio, divesting businesses, splitting the company, and pursuing a sale,” said Keith McLoughlin, Campbell’s interim president and CEO. “The board concluded that, at this time, the best path forward to drive shareholder value is to focus the company on two core businesses in the North American market with a proven consumer packaged goods business model.”
The company, which has recently faced criticism from shareholders, has decided to leverage consumer insights and trends—such as health and well-being, snacking, and convenience—to drive relevance in its North American brands. These include leading brands such as Cape Cod, Goldfish, Kettle Brand, Lance, Late July, Pace, Pacific, Pepperidge Farm Farmhouse and Milano cookies, Prego, and Snyder’s of Hanover. Investments in innovation and consumer engagement will enable these brands to leverage evolving consumer tastes and trends.
As a part of its plan to refocus its efforts on North America, Campbell has engaged Goldman Sachs and Centerview Partners to commence a process to divest its Campbell International and Campbell Fresh businesses in a manner that maximizes value. Campbell International consists of Arnott’s and the Kelsen Group, along with the company’s manufacturing operations in Indonesia and Malaysia and its businesses in Hong Kong and Japan. Campbell Fresh includes Bolthouse Farms, Garden Fresh Gourmet, and the company’s refrigerated soup business.
As a result of this more focused portfolio, Campbell is increasing its cost savings target by $150 million. The company plans to achieve these additional savings by streamlining its organizational structure, expanding its zero-based budgeting efforts, and continuing to optimize its manufacturing network. These savings are in addition to the company’s prior target of $500 million and the previously announced $295 million in target synergies and run-rate cost savings from Campbell’s integration of Snyder’s-Lance. Combined, these programs will bring Campbell’s total cost savings target to $945 million by the end of fiscal 2022.