Campbell Soup Company’s plan to “own the world’s soup bowl” requires some serious changes to its business structure, and these are being put in place.
This week the company consolidated its $300m (182m) global advertising budget in Young & Rubicam and BBDO Worldwide. Y&R takes on the entire $30m (18.2m) European account, expelling Saatchi & Saatchi from parts of the business, and adds the worldwide beverages brief previously held by Foote Cone & Belding.
Next week, Littlewoods Lotteries marketer Andrew Slamin will switch from selling scratchcards to cans of soup. He joins Campbell’s in the UK as marketing director to replace Alison Levett, who has been moved to the new post of commercial director (MW November 5).
These moves come just one month after US chief financial officer Basil Anderson flew into London to talk to City investors. Speculation was rife that the company was seeking a full listing on the London Stock Exchange, but according to a spokesman Anderson was only here to generate interest in Campbell’s New York-listed stock.
But Campbells’ new team and agencies will require some innovative resources if they are to engineer growth in what is at best a mature – at worst declining – market.
The world’s biggest canned soup company, with annual sales of $6.7bn (4bn), has ambitious plans for global growth: it is aiming to expand its non-US business from 20 to 30 per cent of its global sales by 2000, according to reports. A spokesman says: “We only supply two per cent of the global soup market (which includes home-made soup) so there is a tremendous opportunity.”
The company talks of “building the category” rather than stealing share from established rivals. It already supplies over half of the US’ ready-to-eat soup, and is aiming for the same share in other markets with the aid of a new structure. It set up regional head offices in Belgium and Hong Kong a year ago. The Belgian office is run by Marty Thrasher, drafted in from the US, where he was president of the international grocery division.
The company also appointed Tim Callahan last month as vice-president of global business development, with responsibility for worldwide advertising, market research and design.
Campbell’s spun off its Vlasic Foods International earlier this year for 1bn and now aims to concentrate on its core soup brand, V8 vegetable juice, Prego tomato sauce and its Pepperidge Farm crackers and cookies range.
In Europe it bought France’s number-one soup brand, Liebig, last December and introduced the Deliciously Good range in Britain this month. In 1996, it bought Germany’s Erasco soup company and it is also launching what the spokes-man calls a “broth product” in Belgium and Germany.
Another key component of the global restructure has been the development of “Campbell’s Away From Home”, a new unit which will open soup kiosks in airports and shopping malls, as well as developing the soup’s availability through hospital and university cafeterias and restaurant chains. It has not yet been decided when the operation will be set up in Europe (MW October 22).
There is no clear way forward for companies operating in the 370m UK soup market. A Mintel report published in August this year says the sector is slowly declining – a feature it attributes to the plethora of snack food alternatives available on supermarket shelves.
As the market declines, its key players are pumping more resources into marketing. Campbell’s introduced Deliciously Good earlier this month, and Baxters is repositioning itself in a new ad campaign through The Union as an “every-day luxury”. Market leader Heinz introduced new packaging (MW September 24) and ten-year-old New Covent Garden Soup Company is attempting to expand its retail presence.
Chilled soup is the growth area in the category: in 1997 it grew by 22 per cent to achieve sales of 45m. The sector is dominated by New Covent Garden and by own label.
Heinz and Baxters have already attempted fresh chilled soups, and Batchelors has tested tinned varieties, but none has succeeded. As the Mintel report says: “The strong domination of each sector by individual brands means that new products have to offer the consumer a distinctively new proposition in order to succeed.”
The Campbell’s spokesman says the company wants to “increase the whole [soup] category by increasing availability – to make Campbell’s soup available any time, any place, anywhere, anyhow”.
It will take more than a revamped Martini slogan to expand a stagnant market. But whether a new marketing director and a new ad agency will help fill bowls with Campbell’s soup will soon become apparent.