Campbell Soup CEO Mark Clouse said his company could eventually split its snacks business from its meals and beverages unit but cautioned that any shakeup, if it did occur, is unlikely to happen anytime soon.
“I’ve been very consistent in suggesting that we will always look at where the value creation opportunity is for shareholders,” Clouse said at the company’s investor day this week in New York City. “And if there’s a point in time where we feel that there’s an opportunity or [a split] merits the discussion, we’re certainly going to take a look at it. … It’s a possibility, but not today.”
Best known for its signature soup, Campbell has lessened its dependence on the offering by prioritizing the growth of brands such as Goldfish and Pepperidge Farm while bulking up its portfolio through the acquisitions of snacks maker Snyder’s-Lance and Rao’s sauce maker Sovos Brands.
Clouse expressed confidence in the “uniqueness … and breadth” of his 155-year-old company’s brands and underscored that he was looking forward to “having an opportunity and a runway to see what this portfolio can deliver.”
The success of some recent high-profile spinoffs in the food space may be leading more executives to consider doing the same.
Oreo and Ritz maker Mondelēz International has been a standout with its snacking portfolio since it was spun off by Kraft Foods in 2012. And last October, Kellogg’s divided itself with spinoff Kellanova focusing on its fast-growing snacks operation, and W.K. Kellogg, the mature cereal business.
But Kellanova’s time on its own appears short-lived. Mars announced in August that it would purchase the company for $36 billion, a deal that will allow it to add Cheez-It, Pringles, Pop-Tarts and Eggo to its confection-heavy portfolio.
Erin Lash, a director of consumer equity research at Morningstar, said in a research note that “any separation [at Campbell would be viewed] as an opportunity to unlock a higher multiple for its portfolio of snacking brands.”
Snacks were responsible for just under half of Campbell Soup’s net sales in its 2024 fiscal year.
Campbell Soup on Tuesday increased its organic sales growth outlook to 2% to 3%, up from a prior forecast of 2%. The packaged food company forecast annual growth of 3% to 4% in snacks and 1% to 2% in meals and beverages.
Campbell Soup has 16 so-called “leadership brands” it is prioritizing for growth. The New Jersey company, with nearly $10 billion in annual net sales, also owns Late July, Pacific, Prego, Swanson, Snack Factory and V8. Executives forecast Goldfish alone will become its largest brand by its 2027 fiscal year with $1.3 billion in sales.
This week Campbell Soup announced plans to drop “soup” from its name to show that its future includes more than its signature dish. Shareholders will be asked to vote at the annual meeting in November on whether to change the name to The Campbell’s Company.
