Investor Vote on Name Change: Campbell Soup Company's New Strategy

The Campbell Soup Company, renowned for its iconic red-and-white labeled soup, is embarking on a transformative journey, seeking to shed its "Soup" moniker and become simply "Campbell's Company". This strategic shift reflects Campbell's ambition to expand beyond its traditional roots and capitalize on the burgeoning snack market.

• This pivotal decision will be put to a vote by shareholders at Campbell's annual meeting in November.
• The company believes that dropping "Soup" from its name more accurately reflects its diversified portfolio, which now includes a significant presence in snacks, meals, and beverages.

The Rise of Snacks: A New Era for Campbell

Campbell's strategic move towards a broader product portfolio is driven by the compelling growth trajectory of the snack category. Snacks have consistently outpaced soup sales, demonstrating their potential for driving future revenue.

• In fiscal year 2023, snack sales surged by 13%, while soup sales grew by a more modest 3%.
• This trend is reflected in Campbell's net sales, with nearly 48% originating from snacks, highlighting their growing importance within the company's overall revenue stream.
• Campbell's flagship snack brand, Goldfish, achieved a remarkable milestone in March, generating annual net sales of $1 billion, a feat matched only by its iconic soup product.

Acquisition Strategy: Expanding Campbell's Reach

Campbell's commitment to growth has been fueled by strategic acquisitions, including the $2.7 billion purchase of Sovos Brands earlier this year. Sovos Brands owns a portfolio of popular food brands like Rao's sauces, Noosa's Yoghurt, and Michael Angelo's frozen entrees. This acquisition significantly bolstered Campbell's presence in the sauces, yogurt, and frozen food sectors.

• Campbell's commitment to expanding its portfolio is further demonstrated by its 2017 acquisition of the snack company Snyder's-Lance for a substantial $4.87 billion. This acquisition solidified Campbell's position in the snack category.
• These strategic acquisitions illustrate Campbell's proactive approach to leveraging market opportunities and diversifying its revenue streams.

Campbell's Financial Performance: Earnings and Growth Projections

Campbell's recent financial performance reflects its commitment to growth and innovation.

• In the fourth quarter ending July 18, 2024, Campbell reported total net sales of $2.293 billion, exceeding the previous quarter's sales of $2.068 billion. This demonstrates a healthy growth trajectory.
• Campbell's executives anticipate stable sales in the soup category, alongside annual growth of 3% to 4% in snacks and 1% to 2% in meals and beverages. This indicates a focus on sustained growth across its diversified product portfolio.
• Despite the expected stability in soup sales, Campbell remains committed to investing in innovation within this category. This commitment is evident in the recent introduction of new spicy soup flavors, including Ghost Pepper Chicken Noodle, aimed at appealing to younger consumers.

Investor Outlook: The Future of Campbell's Company

Campbell's decision to drop "Soup" from its name is a bold statement of its commitment to embracing growth beyond its traditional product category. Investors will be closely watching the shareholder vote in November, as it will provide insights into their confidence in the company's new strategy.

• Investors who are looking for companies focused on growth in the snack and other high-growth categories may be attracted to Campbell's new direction.
• Campbell's commitment to innovation, strategic acquisitions, and a diversified portfolio positions it for continued success in a dynamic consumer goods market.