Marcia Mogelonsky
Marcia Mogelonsky is the Director of Insight, Mintel Food & Drink, at Mintel. Her expertise focuses on a number of areas in confectionery and snacks.

Although it is a company with a broad portfolio of brands, Campbell is, as far as many consumers are concerned, “the soup company.” However, the company has a number of other significant brands, including Goldfish crackers, Pepperidge Farms bread and biscuits, and Bolthouse Farms fresh juices, dressings and pre-cut vegetables.

The purchase of Snyder’s-Lance gives Campbell a chance to capitalize on the growing snack market and opportunities to compete for “share of chip.”

As soup sales falter, Campbell re-positions itself

The packaged soup market has been under siege for a number of years as consumers seek out fresher options. Campbell has worked hard to keep up with changing tastes: the company has re-formulated a number of its recipes, introducing the Well Yes! brand in the US in 2017. The brand claims to be “clean, with simple and purposeful ingredients that people know and understand.”

Campbell also purchased Pacific Foods in 2017, extending its presence in the natural and organic food market which began with its purchase of Plum Organics in 2013. While the purchase of Pacific Foods pushes the boundaries of its soup territory, the company is still missing out on the growing interest in fresh, refrigerated products.

Campbell sees another opportunity

In its 2017 Annual Report, Campbell outlined its plans for the future. With sliding soup sales, the company reiterated its purpose: “real food that matters for life’s moments.” In order to attain that goal, the company planned to focus on four strategic imperatives:

  • Real food, transparency and sustainability
  • Digital and e-commerce
  • Fresh and health and well-being
  • Snacking

With its acquisition of organic and natural companies, including Bolthouse Farms, Pacific Foods and Plum Organics, the company was well on it way to meeting two of its goals. The acquisition of Snyder’s-Lance, is key to attaining the fourth one.

Snyder’s-Lance is a major player in salty snacks

Campbell’s $6.1 billion purchase of Snyder’s-Lance gives it ownership of the third-largest salty snack company in the US. The company’s sales of potato chips and tortilla chips through multi-outlet channels was estimated at $524.6 million in 2017, while sales of salty snacks including pretzels and popcorn totaled $641.3 million.

Besides its snack brands, which include Snyder’s of Hanover, Cape Cod, Late July, Pop Secret and Kettle Chips, the company also sells crackers and cookies under the Lance and Archway brands. Cracker sales through multi-outlet channels are recorded at $504.6 million in 2017, while cookie sales amount to $108.5 million.

The company forms Campbell’s Snacks division

In March 2018, Campbell announced the formation of a new division, called Campbell’s Snacks, which includes all the brands acquired from Snyder’s-Lance, merged with its Pepperidge Farms portfolio.

The Campbell Snacks portfolio includes Pepperidge Farm’s well-known brands, including Goldfish and Milano, as well as the sweet and savory biscuits from its Arnott’s and Kelsen lines. These are teamed with Snyder’s-Lance’s Snyder’s of Hanover, Lance, Kettle Brand, KETTLE chips, Cape Cod, Snack Factory Pretzel Crisps, Emerald and Late July.

The company estimates that the company will generate some $10 billion in sales annually, considerably more than the company’s global baked snack division, which generated some $2.5 billion in sales in 2017.

What we think

Instead of just offering single-note snacks such as chips or biscuits, Campbell is in the position of being able to combine elements of both its snacking company and its other lines such as soups, beverages and dressings. Pairing a portable, microwavable cup of soup with a mini bag of chips, some ready-to-eat vegetables and dip, and a single cookie, for example, could present a “mini meal to go.”

Campbell can regain movement against slowing soup sales by including more snacks, and reconfiguring the company to include a snack division should help reach that goal. The company stands a better chance of capturing the “snack moment” by pulling from both its snack division and the rest of its assets (soup, juices, dressings, prepared vegetables and more).