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Campbell Soup has a soup problem

Campbell Soup is still struggling to sell ... soup.The company says soup sales fell 7% last quarter in the Uni...

Posted: Feb 17, 2018 8:36 AM
Updated: Feb 17, 2018 8:36 AM

Campbell Soup is still struggling to sell ... soup.

The company says soup sales fell 7% last quarter in the United States compared with last year.

CEO Denise Morrison blamed a "key customer issue" - code for an ongoing dispute with Walmart. The Wall Street Journal reported in August that the two couldn't agree on pricing and shelf space promotion. Morrison said Friday that Campbell was "making progress" on an agreement.

But Campbell hasn't grown revenue over the past three years. The stock has slumped. And the problem is deeper than shelf space.

Campbell is still the biggest name in the American soup industry, with about 40% market share, according to Euromonitor data. Yet it has struggled, along with competitors like General Mills' Progresso and Unilever's Lipton, to get people to buy processed soup.

The $4.5 billion U.S. canned soup industry has been flat since 2012.

"Canned soup is the epitome of a processed food product," said Jared Koerten, an analyst at Euromonitor.

Consumers are moving away from center-store aisles to the perimeter, where they can find fresher options with less salt, Koerten explained. Microwavable meals are under similar pressure, Koerten noted.

Campbell's drinks didn't fare much better. V8 demand was weak and Bolthouse Farms coffee, fruit and veggie juice lagged.

Related: No soup for you? Campbell plunges on poor sales

The good news for Campbell: Organic soups and broths are hot right now. Sales for the Pacific and Amy's brands have each grown more than 60% over the past five years, Euromonitor said. Campbell bought Pacific Foods for $700 million last year.

The company also has a profitable snack business, and it's building a strategy around "faster growing spaces of health and well-being and snacking," Morrison said on an analyst call.

Goldfish crackers and Pepperidge Farm's Farmhouse cookies helped boost snack sales 3% last quarter compared with the prior year, the company noted.

Late last year, Campbell announced a $4.9 billion deal for Snyder's-Lance, which makes Snyder's of Hanover pretzels, Cape Cod and Kettle potato chips and Pop Secret popcorn. It was the biggest purchase in the company's 149-year history.

After the deal closes later this year, snacks will make up nearly half of sales, up from around a third today.

Koerten doesn't expect Campbell to abandon the soup business, but its "trying to pivot to become a more on-the-go snack company."

Mississippi Coronavirus Cases

Data is updated nightly.

Cases: 309223

Reported Deaths: 7153
CountyCasesDeaths
DeSoto21005250
Hinds19989411
Harrison17590303
Rankin13388277
Jackson13169243
Madison9965212
Lee9900170
Jones8319161
Forrest7554149
Lauderdale7232237
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Lamar614685
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Greene129633
Lawrence126823
Noxubee126634
Montgomery125842
Perry125238
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Jefferson Davis105932
Tunica103425
Claiborne101430
Benton97525
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Humphreys94732
Franklin83123
Quitman78916
Choctaw74417
Wilkinson65329
Jefferson64928
Sharkey49817
Issaquena1686
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Alabama Coronavirus Cases

Cases: 522512

Reported Deaths: 10790
CountyCasesDeaths
Jefferson755371494
Mobile39129799
Madison34124500
Tuscaloosa25408444
Montgomery24059573
Shelby23225242
Baldwin20730302
Lee15638166
Calhoun14358311
Morgan14171273
Etowah13705348
Marshall12012220
Houston10416279
Elmore10024203
Limestone9862148
Cullman9509191
St. Clair9486236
Lauderdale9280233
DeKalb8762183
Talladega8127173
Walker7151276
Autauga6763106
Jackson6762110
Blount6532133
Colbert6236132
Coffee5436113
Dale4781111
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Franklin421382
Chilton4130110
Covington4069115
Tallapoosa3922148
Escambia390374
Dallas3528150
Chambers3519122
Clarke347360
Marion3076100
Pike306676
Lawrence296395
Winston273272
Bibb256761
Marengo248561
Geneva246475
Pickens233259
Barbour227155
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Butler213268
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Henry188444
Cherokee182744
Randolph177841
Monroe173140
Washington165538
Macon156548
Clay150255
Crenshaw149557
Cleburne147041
Lamar140034
Lowndes137353
Wilcox124727
Bullock122040
Conecuh109728
Perry107726
Sumter103332
Coosa99428
Greene91434
Choctaw58824
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