This story appears in the December 23, 2012 issue of Forbes. Subscribe
The savior of soup is explaining how she will rescue Campbell's from irrelevance.
"These are called ShakeDowns," Denise Morrison, new CEO of the 143-year-old Camden, N.J. soup company, says as she fumbles with a small bag of baby carrots. "What you do is pull here at the corners."
Tugging at the plastic, nothing happens. She pulls again and again. "You have to find just the right spot," she says through flushed cheeks. When she's about to give up the seal breaks, and a cluster of carrots are showered in a mixture of ranch-flavored dry spices. Mmmm. Tasty. "Only 25 calories!" she exclaims.
With just over a year under her belt running Campbell's, Morrison, 58, is determined to shake things up. Between August 2012 and August 2013 Campbell's will have launched more than 50 new products, including 32 new soups, up from only 3 in 2010 and 2011. She also surprised analysts with the $1.55 billion buyout of California juice-and-carrot seller Bolthouse Farms, the largest acquisition in the company's history.
She has little choice. With its iconic red-and-white packaging and reliable favorites like Tomato and Cream of Chicken, Campbell's soup held a special place on the American dinner table for the better part of the 20th century. But in the last few years its core soup business, which accounts for half the company's $7.7 billion in annual revenues, has faded to 46% market share from 51% in 2007, an ever smaller part of an ever smaller food category. An ill-advised move into low-sodium formulations under Morrison's predecessor, Doug Conant, accelerated the decline.
"They're the market leader but have been losing share to everyone," says Lynn Dornblaser of market research firm Mintel, primarily to main competitor
Morrison, who served as COO under Conant, knows they're in trouble. On her first day as CEO in August 2011 she began implementing a new vision for the company: Stabilize the soup and simple meals businesses, expand internationally, grow faster in healthy beverages and baked snacks--and add back the salt.
"Reducing sodium was the right thing to do," Morrison says. "It's just not the only thing we should have been doing. If we're really going to win, then we've got to be the most innovative food company."
A mother of two grown daughters, Morrison came to Campbell's from Kraft Foods in 2003. She knows demographics are working against the company: Campbell's sells well with the boomer generation but not with its kids.
Millennials, those ages 18 to 34, now constitute 25% of the U.S. population, or approximately 80 million people. "There are a lot of them," says Mark Alexander, president of Campbell's North America. "And they spend a lot of money."
Early on in her tenure Morrison dispatched Campbell's employees to hipster hubs, including Austin, Tex., Portland, Ore., London and Paris, to find out what all those potential customers wanted.
They learned Gen Y is globally connected, culturally diverse, college educated and underemployed. They are also the dine-out generation, routinely eating Mexican, Indian and Asian cuisines once considered exotic.
"They go through life hunting out and gathering different experiences," says Charles Vila, vice president of consumer insights. "They sample foods in the same way they sample jobs."
In August Campbell's launched Go Soups, a six-flavor line in plastic pouches meant to convey freshness while capturing millennials' adventurous tastes, restless spirits--and food-shopping dollars. Go Soups are premium-priced at $2.99 per pouch versus $1.09 for a can of soup.
So far the plan is working. Sales are up 8% in the latest quarter from the same period in 2011, but the soup marketing campaign--with a snazzy Tumblr-inspired website and a partnership with music download service Spotify--strikes some as deeply pandering. "The Greatest Generation stopped Hitler, the baby boomers stopped the Vietnam War," comedian Stephen Colbert riffed in mid-November. "This generation will go down in history for demanding different soup."
Of course, soup-in-a-bag for twentysomethings isn't Morrison's only plan. In the next decade 70% to 75% of global consumer growth will come from emerging markets, according to McKinsey, while only 3% of Campbell's business is there today. Morrison is building out existing businesses in Indonesia, Malaysia, Mexico and Australia; ramping up exports to Europe, Asia and the Middle East; and growing a presence in China.
And with Bolthouse under the same roof, which already provides ingredients for Campbell's soups and V8 beverages, the company now has a new distribution path to the produce section, which is gaining ground as consumers seek more fresh packaged foods, a $12 billion category.
Still, says University of Michigan's Gordon, "they have to hit that millennial group or they'll be out of business in ten years. Not doing it would be horrendous. Will it turn around the company? No. But it keeps the lights on."
Morrison, who attended a February R&D meeting in a cheetah-print jacket, urging the team to pick up the pace, clearly knows the stakes. "This isn't just building a new house," she says. "It's putting in a foundation for the future." If there is a future, that is.
What Soup's For You?
Campbell's Canned Condensed Soup
Introduced: 1897
Price: $1.09 per can
Size: 10-11 ounces
Flavors: Tomato, Chicken Noodle, Cream of Mushroom
Target consumer: Baby boomers, 48 to 66
Shelf life: Two years
Campbell's Go Soup
Introduced: August 2012
Price: $2.99 per pouch
Size: 14 ounces
Flavors: Creamy Red Pepper with Smoked Gouda, Spicy Chorizo & Pulled Chicken with Black Beans
Target consumer: Millennials, 18 to 34
Shelf life: One year
Readers: Would you try the new Go Soups? Do you think targeting the emerging millennial group is a smart idea? And will Morrison's efforts to remake the 143-year-old company boost sales?
