Campbell Soup Company

Campbell Place
Camden, New Jersey 08103-1799
U.S.A.
(609) 342-4800
Fax: (609) 342-3878

Public Company
Incorporated: 1922
Employees: 43,256
Sales: $6.26 billion
Stock Exchanges: New York Philadelphia London Swiss
SICs: 2032 Canned Specialties; 2038 Frozen Specialties Nee; 2051 Bread, Cake & Related Products; 2052 Cookies & Crackers; 2034 Dehydrated Fruits, Vegetables & Soups; 0812 Food Crops Grown Under Cover; 5148 Fresh Fruits & Vegetables; 0161 Vegetables & Melons; 2015 Poultry Slaughtering & Processing; 5149 Groceries & Related Products Nee.

Campbell Soup Company is the number-one maker of soups in the United States and is also a leading manufacturer of other products, including frozen entrees, baked goods, fruit juices, pickles, spaghetti sauces, and ready-to-eat salads.

The roots of the Campbell Soup Company can be traced back to 1860, when Abraham Anderson opened a small canning factory in Camden, New Jersey. In 1869 Philadelphia produce merchant Joseph Campbell became Anderson’s partner, forming Anderson and Campbell. The company canned vegetables, mince meat, jams and jellies, and a variety of soups. In 1876 Anderson and Campbell dissolved their partnership and Campbell bought Anderson’s share of the business, changing its name to Joseph Campbell Preserve Company. In 1882 a partnership was formed between Campbell’s son-in-law, Walter S. Spackman; Campbell’s nephew, Joseph S. Campbell; and Arthur Dorranee, Spademan’s personal friend who brought a cash infusion to the partnership. At this time the company was renamed Joseph Campbell Preserving Company. The senior Campbell maintained daily involvement in the company until his death in 1900.

In 1896 the company built a large factory in Camden and expanded its product line to include prepared meats, sauces, canned fruits, ketchup, and plum pudding. The next year Arthur Dorrance hired his nephew John Thompson Dorrance, a chemical engineer and organic chemist. By 1899 John Dorrance had successfully developed a method of canning condensed soup. This innovation helped Campbell outstrip its two soup-canning competitors. While others were still shipping heavy, uncondensed soup, Campbell was able to ship and sell its product at one-third cost. As the company began increasing the variety of soups it offered, it began canning less produce. John Dorrance became director of the company in 1900 and soon after the company was renamed the Joseph Campbell Company.

Campbell’s soup began finding its way into American kitchens at a time when the prepared-food industry was growing rapidly yet was still small. By 1904 the company sold 16 million cans of soup a year. Boasting 21 varieties of soup by 1905, Campbell began to eye a bigger market; in 1911 Campbell began doing business in California market, thus becoming one of the first companies to serve the entire nation.

In 1910 Dorrance was made general manager of the company, and in 1914 he became president. Dorrance focused on soup and discontinued the marginal line of ketchups, preserves, and jams. In 1915 Dorrance became sole owner of Campbell when he bought out his uncle, Arthur Dorrance.

In 1912 Campbell began growing its own produce in an effort to standardize quality. This program was the first of an ongoing series of efforts Campbell has made to grow what it processes. At that time, during the eight summer weeks in which tomatoes were harvested, the Campbell plant devoted its entire effort to the production of tomato soup and tomato juice. During World War I almost half of Campbell’s sales were from these two products.

In 1921 Campbell acquired the Franco-American Food Company, and the next year the company was renamed the Campbell Soup Company. In 1923 Arthur C. Dorrance, John Dorrance’s brother, became Campbell’s general manager. In 1929 Arthur C. Dorrance was made a director and vice-president of the board of directors. When John Dorrance died in 1930, Arthur C. Dorrance was elected president.

Throughout this period Campbell continued to grow. In 1929 the company opened a second major facility in Chicago. In the early-1930s Campbell opened subsidiaries in Canada—Campbell Soup Company Ltd.—and Great Britain—Campbell’s Soups Ltd. In 1936 Campbell began making its own cans and in 1939 its agricultural research department was formed. In 1942 sales topped $100 million for the first time. In 1946 Arthur C. Dorrance died and James McGowen, Jr. became president. The following year Campbell began growing its own mushrooms in Prince Crossing, Illinois.

Despite this growth, Campbell was slow to diversify. In 1948 the company acquired V-8 juice, but its first major purchase was not made until 1955, when it bought the Omaha, Nebraska-based C.A. Swanson & Sons, producers of the first complete meal frozen entrees called TV dinners.

In the midst of this growth, W. B. Murphy was elected president, following McGowan’s retirement in 1953. In 1954 Campbell took its stock public and, in 1957, the company formed an international division to oversee its foreign concerns. In 1958 sales exceeded $500 million for the first time and Campbell established Campbell’s Soups, S.p.A. in Italy. This venture was followed, in 1959, by the opening of subsidiaries in Mexico and Australia.

Throughout the 1960s Campbell was conservatively managed and quite successful. In that decade the company opened two mushroom-growing facilities and 11 new plants on three continents. In the 1960s Campbell’s growth—which underwent a slight shift in emphasis—began to include regular acquisitions in addition to internal expansion. In 1961 Campbell acquired Pepperidge Farm, a maker of quality baked goods, and a similar Belgian company, Biscuits Delacre. In 1965 Campbell created a food-service division and, in 1966, began marketing EfficienC, its own brand of food-service products through that division. Also in 1966 Campbell formed Godiva Chocolatier to distribute the Belgian-made chocolates in the United States. In 1974 the company completed a purchase of the European Godiva company and became its sole owner. Campbell created Champion Valley Farms, a pet food concern, in 1969.

During the 1970s the company’s slow but steady growth continued. Campbell, which had built its fortune on Dorrance’s invention of condensed soup, introduced the first Chunky brand of ready-to-serve soups. This became a highly successful enterprise. In 1971, for the first time, Campbell’s sales topped $1 billion. In 1972 Murphy retired and was replaced by President Harold A. Shaub. Also that year, Swanson introduced Hungry Man meals, a line of frozen dinners with larger-than-average portions. In 1973 Campbell acquired Pietro’s Pizza Parlors, a chain based in the Pacific Northwest. This led, in 1974, to the formation of a restaurant division, and heralded Campbell’s intention to add more restaurants to its growing list of subsidiaries.

In 1978 Campbell purchased Vlasic Foods, a Michigan-based producer of pickles and similar condiments, for approximately $35 million in capital stock. This acquisition gave Campbell the lead over archrival H. J. Heinz in the pickle-packing business. Campbell added seven small European food-producing companies and three domestic operations in 1979. That same year sales topped $2 billion for the first time. In 1978 Campbell made a brief and unsuccessful foray into the Brazilian soup market.

The diversification movement started by Shaub in the early 1970s prepared the company for long-term growth. Campbell’s debt remained low and the company’s new products and acquisitions have provided it with popular brand names in a variety of food-industry sectors. Campbell realized that the key to growth in this mature market is diversification. Shaub changed a longstanding policy on new-product development requiring a profit within the first year. His most notable innovation, however, was his decentralization of marketing for major product lines.

To sustain these growth-oriented policies, Campbell broke its tradition of relying on internally generated funds to finance its efforts. In June of 1980 the company entered the debt market with a $100 million ten-year offering. As a cautious food producer, Campbell’s earning have always been healthy, but Shaub hoped to increase both sales and profits margins. A key reason for Shaub’s determination to allow Campbell to diversify was the recognition that the market for many of these products had matured and growth had slowed.

In 1980 R. Gorden McGovern succeeded Shaub as president and Campbell made two acquisitions—Swift-Armour S.A. Argentina and a small American poultry-processing plant used by Swanson for its frozen chicken dinners. Campbell’s efforts in Argentina were not entirely fruitful; much of the difficulty has been related to currency-transaction adjustments. Also in 1980 Campbell acquired additional bakery, pasta, and pickle operations.

In 1981 McGovern reorganized management structure, dividing the company into two new divisions—Campbell U.S.A. and Campbell International—and about 50 business groups. This new structure was meant to foster entrepreneurship and heighten management’s sensitivity to consumer opinion, long a weakness at Campbell. The company acquired Snow King Frozen Foods, a large producer of uncooked frozen specialty meats, and introduced the wildly successful Prego spaghetti sauce nationally in 1981. In 1982 Campbell acquired Mrs. Paul’s Kitchens, a processor of frozen prepared seafood and vegetables. Several of the company’s subsidiaries also made major purchases. Vlasic Foods acquired Win Schuler Foods, a specialty-foods producer, and Pepperidge Farm completed the purchase of an apple juice processor, Costa Apple Products, with markets primarily on the East Coast. Also in 1982, Juice Bowl Products, a fruit juice processor, was acquired.

A variety of other acquisitions in the early 1980s added Annabelle’s, a restaurant chain; Triangle, a manufacturer of physical-fitness and sports-medicine products; a fresh-produce distributor; a Puerto Rican canning company; and an Italian manufacturer of premium biscuits.

McGovern further increased emphasis on marketing and new-product development in an effort to shift the company away from its production-oriented focus. McGovern also introduced Total Systems, a worker-oriented system designed to increase quality and efficiency that is similar to the successful worker management strategies employed by many Japanese companies.

One of McGovern’s primary concerns was turning Campbell into a “market-sensitive food company.” After McGovern publicly referred to some of the company’s Swanson TV dinner line as “junk food” in 1982, Campbell initiated Project Fix in an effort to upgrade food quality and improve packaging of its older products. As McGovern told Business Week in 1983, one of the most important facets his make over was making the company “somebody who is looking after [consumers’] well-being.” The 1983 Triangle Manufacturing purchase and 1982 formation of a health-and-fitness unit were both designed to meet that goal. Campbell’s involvement in frozen fish, juices, and produce were also part of the new market sensitivity urged by McGovern.

In addition, Campbell has attempted to market products regionally and according to age group. The central marketing was broken into 20 regions to allow tailoring of advertising and marketing to fit each region’s peculiar demographics. For instance, the company sells spicier nacho cheese soup in Texas than the rest of the country. The company also aimed its national brands at regional audience, with spots featuring local celebrities and locally arranged promotions. Campbell, which reached half the nation’s homes just by sponsoring the television show Lassie in the 1950s, spent 15 percent of its advertising budget in regional efforts in 1983. That figure was expected to eventually reach 50 percent.

McGovern increased Campbell’s sales and earnings significantly in his first few years. His encouragement of new-product development and line extensions may have been overzealous. The company introduced frozen entrees to compete with Stouffer’s, dried soups to challenge Lipton, and name-brand produce such as Farm Fresh mushrooms and tomatoes, complemented by exotic varieties of mushrooms, refrigerated salads and pasta sauces, and juices. In all, Campbell introduced 334 new products in the first half of the 1980s. This included several costly mistakes, such as the 1984 failure of Pepperidge Farm’s Star Wars cookies, which did not fit the brand’s high-quality image. Yet spurred on by successes such as Le Menu frozen dinners, McGovern concentrated on marketing and new-product development. In 1985, however, the company decided to cut back on new-product gambles and McGovern reevaluated his goals and returned the company’s focus to product quality and efficiency.

Throughout this period, during which it became increasingly clear that McGovern’s plan was destined to fail, acquisitions and group formations continued, but at a pace reminiscent of the old Campbell. The company purchased a Belgian food producer and 20 percent of Arnotts Ltd., an Australian biscuit manufacturer, in 1985. In 1986 the company bought two more American food companies and established Campbell Enterprises to oversee non-grocery products. Meanwhile new products were gradually but steadily introduced.

In 1984 John T. Dorrance Jr., the son of condensed soup’s inventor, retired as chairman of the board and became director of the board’s executive committee. He was posthumously inducted into Junior Achievement’s National Business Hall of Fame in 1991. He was succeeded by William S. Cashel, Jr. Dorrance and other members of his family, however, still controlled 58 percent of Campbell’s stock and showed no interest in selling, keeping the company safe from takeover.

By 1987 McGovern began selling off some of Campbell’s less-successful ventures. In 1987 the company sold its disappointing pet food, Triangle physical fitness, and Juice Works beverage businesses. In 1988 the Pietro’s pizza and Annabelle’s restaurants were also sold, taking Campbell out of the restaurant business entirely.

However, Campbell also bought several smaller companies in 1987 and 1988 that were more compatible with its traditional lines of business. These included a French cookie maker, the Open Pit barbecue sauce line, an American olive producer, and Campbell’s largest acquisition to date, Freshbake Foods Group PLC, a British producer of frozen foods. Also in 1988, Robert J. Vlasic, whose Vlasic Foods Campbell had purchased in 1978, became chairman of Campbell.

Campbell’s management crisis was exacerbated by the death, in April of 1989, of John Dorrance. Dorrance’s 31 percent of the company’s stock was split between his three children, who have demonstrated an interest in preserving family control of the company. The remaining 27 percent of the family-owned stock is split among other members of the clan, some of whom (representing about 17.4 percent of the company’s stock) have expressed a desire to sell Campbell. But Chairman Vlasic had loaded the board with family members loyal to the company (six of the 15 board members are family members, including John Dorrance’s three children), so a proxy battle seems unlikely.

McGovern left Campbell in late 1989. His final attempt to recoup Campbell’s losses, a $343 million restructuring program, earned him little praise. Although sales had doubled during his term, profits had dropped 90 percent as a result of his aggressive capital commitments. From 1988 to 1990 alone, earnings fell from $274.1 million to $4.4 million.

In January of 1990 David W. Johnson was elected president and CEO. Johnson came to Campbell from Gerber Products Company, where he had been successful in streamlining that company’s operations. Johnson employed a “back-to-basics” strategy that called for drastic restructuring. The new CEO oversaw the divestment of whole businesses, including mushroom farms, a salmon processing plant, the refrigerated salads line, and cookie maker Lazzaroni. By June of 1991, Johnson had closed or sold 20 plants worldwide, reduced the company’s 51,700 person work force by 15.5 percent, and pulled unprofitable lines from store shelves. And while Johnson purported to support marketing, he also cut Campbell’s advertising budget.

The product Johnson was most interested in promoting was soup, the company’s core. Even into the early 1990s, Campbell soups had 66 percent, or $1.6 billion, of the $2.6 billion U.S. soup market, which contributed almost half of the conglomerate’s $570 million operating profits.

In anticipation of the North American Free Trade Agreement, Johnson also supervised the combination of Campbell’s Canadian operations, some Mexican companies, and the U.S. businesses into one division called Campbell North America. Late in 1991, Campbell also focused on the impending European Community’s single market, which promised 344 million consumers (50 percent more than the United States) and had potential for future growth. The cookie subsidiary of Campbell Soup, Campbell Biscuits Europe, got a head start on the market in February of 1990, when it reorganized its European corporate structure, consolidated marketing, and standardized packaging.

By the end of 1991, some indicators showed that Johnson’s efforts had paid off: Campbell’s earnings through the first three quarters of 1991 had risen 33 percent, making the company’s profits the second-fastest growing in the food industry. But some analysts warned that the profits came at the expense of core brand promotion, which was cut in 1991. The earnings were not based on sales, which only rose 1.9 percent during the same period.

Johnson has been given an overall good rating in the quick turnaround at Campbell. In 1992 the company made bolder goals, with a vision expressed as “Campbell Brands Preferred Around the World.” The plan made further preparations for the European Community’s single market and expanded those efforts around the world. The company was reorganized into three multi-national divisions. Campbell North and South America grouped Campbell’s Swift-Armour subsidiary in Argentina with the previously-organized North American group. Campbell Biscuit and Bakery united Pepperidge Farm in North America with Delacre in Europe and Australia’s market-leading biscuit company, Arnotts Limited (of which Campbell owns 58 percent). Campbell Europe/Asia is a growth-oriented division that comprises the company’s “greatest opportunity and challenge,” according to the 1992 annual report.

Campbell’s good performance, maintenance of high stock prices ($80 in mid-1991), and 58 percent Dorrance family ownership has staved off any threat of takeover by such giants as Philip Morris and Unilever. Campbell hopes to maintain those qualities by building brand strength, concentrating on global marketing, and continuing strategic asset divestment.

Principal Subsidiaries

Campbell Finance Corp.; Campbell Investment Co.; Campbell Sales Co.; Casera Foods, Inc.; Godiva Chocolatier, Inc.; Hender Farms, Inc.; Joseph Campbell Co.; Mrs. Paul’s Kitchens, Inc.; Pepperidge Farm, Inc.; Vlasic Foods, Inc.; Swift-Armour Sociedad Anónima Argentina; N.V. Biscuits Delacre S.A. (Belgium); Campbell Foods P.L.C. (England); Societe Francaise des Biscuits Delacre S.A. (France); Campbell’s de Mexico, S.A. de C.V.; Compania Envasadora Loreto, S.A. (Spain); Campbell Soup Co. Ltd. Les Soupes Campbell Ltee (France); Campbell S. Australasia Pty. Ltd. (Australia); Campbell S. Fresh, Inc.; Campbell S. U.K. Ltd. (United Kingdom); NV Campbell Food & Confectionar Coordination Center Continental Europe; ESA; NV Godiva Belgium, SA; Royal American Foods Corp.; Sanwa Foods Inc. (Japan).

Further Reading

Sim, Mary B., History of Commercial Canning in New Jersey, Trenton, New Jersey, New Jersey Agricultural Society, 1951; A History, Camden, New Jersey, Campbell Soup Company, 1988; “From Soup to Nuts and Back to Soup,” Business Week, November 5, 1990, pp. 114, 116; Nulty, Peter, “The National Business Hall of Fame,” Fortune, March 11, 1991, pp. 98-103; Barrett, Amy, “Campbell Soup: Hail to the Chef,” Financial World, June 11, 1991, pp. 52-54; Weber, Joseph, “Campbell is Bubbling, But for How Long?” Business Week, June 17, 1991, pp. 56-57; Dagnoli, Judann, “Campbell Ups Ad $,” Advertising Age, July 1, 1991, pp. 1, 25; “Recession Stalks Food Aisles,” Advertising Age, July 15, 1991, pp. 1, 39; Saporito, Bill, “Campbell Soup Gets Piping Hot,” Fortune, September 9, 1991, pp. 142-48; “New Product Search,” Advertising Age, December 2, 1991; Wentz, Laurel, “Europe: How Smart Marketers Cash In,” Advertising Age, December 2, 1991, pp. S-l, S-9; Abernathy, Chris A., “Company Study: Building Networks of Small Brands,” Journal of Services Marketing, winter 1991, pp. 29-34; “Seizing the Dark Day,” Business Week, January 13, 1992, pp. 26-28; Glosserman, Brad, “Campbell Soup Works for Spill Over Effect,” Japan Times Weekly International Edition, May 11-May 17, 1992, p. 17; Woods, Wilton, “The Global 500: The World’s Largest Industrial Corporations,” Fortune, July 27, 1992, pp. 176-232; “Campbell: Now It’s M-M-Global,” Business Week, March 15, 1993, pp. 52-54.

—updated by April Dougal

Campbell Soup Company

Campbell Place
Camden, New Jersey 08103-1799
U.S.A.
(609) 342-4800

Public Company
Incorporated: 1922
Employees: 55,400
Sales: $5.67 billion
Stock Index: New York Philadelphia London Swiss

While Campbell Soup Company is clearly the number-one maker of soups, it is also a leading manufacturer of foods ranging from frozen dinners and entrees to baked goods, fruit juices, pickles, spaghetti sauces, and ready-to-eat salads.

The Campbell Soup Company can be traced back to 1860, when Abraham Anderson opened a small canning factory in Camden, New Jersey. In 1869, Philadelphia produce merchant Joseph Campbell became Anderson’s partner, forming Anderson and Campbell. The company canned vegetables, mince meat, jams and jellies, and a variety of soups. In 1876 Anderson and Campbell dissolved their partnership and Campbell bought Anderson’s share of the business, changing its name to Joseph Campbell Preserve Company. In 1882 a partnership was formed between Campbell’s son-in-law, Walter S. Spackman; Campbell’s nephew, Joseph S. Campbell; and Arthur Dorrance, Spackman’s personal friend who brought a cash infusion to the partnership. At this time the company was renamed Joseph Campbell Preserving Company. The senior Campbell maintained daily involvement in the company until his death in 1900.

In 1896 the company built a large factory in Camden and expanded its product line to include prepared meats, sauces, canned fruits, ketchup, and plum pudding. The next year Arthur Dorrance hired his nephew, John Thompson Dorrance, a chemical engineer and organic chemist. By 1899 John Dorrance had successfully developed a method of canning condensed soup. This innovation helped Campbell outstrip its two soup-canning competitors. While others were still shipping heavy, uncondensed soup, Campbell was able to ship and sell its product at one-third the cost. As the company began increasing the variety of soups it offered, it began canning less produce. John Dorrance became director of the company in 1900, and sometime not long after the company became the Joseph Campbell Company.

Campbell’s soup began finding its way into American kitchens at a time when the prepared-food industry was growing rapidly yet still small. By 1904 the company was selling 16 million cans of soup a year. With 21 varieties of soup by 1905, Campbell began to eye a bigger market, and in 1911 Campbell entered the California market, thus becoming one of the first companies to serve the entire nation.

In 1910 Dorrance was made general manager of the company, and in 1914 he became president. Dorrance immediately discontinued the marginal line of ketchups, preserves, and jams to focus on soup. In 1915, Dorrance became sole owner of Campbell when he bought out his uncle, Arthur Dorrance.

In 1912 Campbell began growing its own produce in an effort to standardize quality. This program was the first of an ongoing series of efforts Campbell has made to grow what it processes. At that time, during the eight summer weeks in which tomatoes were harvested, the Campbell plant devoted its entire effort to the production of tomato soup and tomato juice. During World War I almost half of Campbell’s sales were of these two products.

In 1921 Campbell acquired the Franco-American Food Company, and the next year the company was renamed the Campbell Soup Company. In 1923 Arthur C. Dorrance, John Dorrance’s brother, became Campbell’s general manager. In 1929, Arthur C. Dorrance was made a director and vice president of the board of directors. When John Dorrance died in 1930, Arthur C. Dorrance was elected president.

Throughout this period Campbell continued to grow. In 1929 it opened its second major facility, in Chicago, and in 1930, its first international subsidiary, Campbell Soup Company Ltd., was formed in Canada. This was followed in 1933 by the British subsidiary Campbell’s Soups Ltd. In 1936 Campbell began making its own cans and in 1939 its agricultural research department was formed. In 1942 sales topped $100 million for the first time. In 1946 Arthur C. Dorrance died and James McGowen Jr. became president. The following year Campbell began growing its own mushrooms in Prince Crossing, Illinois.

Despite this growth, Campbell was slow to diversify. In 1948 the company acquired V-8 juice, but its first major purchase was not made until 1955, when it bought the Omaha, Nebraska-based C.A. Swanson & Sons, the maker of TV Dinners, the first frozen dinners.

In the midst of this growth, W. B. Murphy was elected president, following McGowan’s retirement in 1953. In 1954 Campbell took its stock public, and, in 1957, the company formed an international division to oversee its foreign concerns. In 1958 sales exceeded $500 million for the first time and Campbell established Campbell’s Soups, S.p.A. in Italy. This venture was followed, in 1959, by the opening of subsidiaries in Mexico and Australia.

Through the 1960s Campbell was conservatively managed and quite successful. In that decade 11 new plants were opened on three continents, as were two new mushroom-growing facilities. The company’s continued growth in this decade underwent a slight shift in emphasis. In the 1960s Campbell’s growth began to include regular acquisitions in addition to internal expansion.

In 1961 Campbell acquired Pepperidge Farm, a maker of quality baked goods, and a similar Belgian company, Biscuits Delacre. In 1965 Campbell created a food-service division, and, in 1966, began marketing EfficienC, its own brand of food-service products through that division. Also in 1966, Campbell formed Godiva Chocolatier to distribute the Belgian-made chocolates in the United States; in 1974 the company completed a purchase of the European Godiva company and became its sole owner. Finally, in 1969, Campbell created Champion Valley Farms, a pet food concern.

During the 1970s the company’s slow but steady growth continued. Campbell, which had built its fortune on Dorrance’s invention of condensed soup, introduced the first in a new line of Chunky ready-to-serve soups, a highly successful enterprise. In 1971 sales for the first time topped $1 billion. In 1972 Murphy retired and was replaced by President Harold A. Shaub. Also in that year Swanson introduced Hungry Man meals, a very successful line of frozen dinners that consisted of nothing more sophisticated than larger portions. In 1973 Campbell acquired Pietro’s Pizza Parlors, a chain of restaurants in the Pacific Northwest. This led, in 1974, to the formation of a restaurant division, heralding Campbell’s intention to add more restaurants to its growing list of subsidiaries.

In 1978 Campbell made one of its largest acquisitions ever when it purchased Vlasic Foods, a Michigan-based producer of pickles and similar condiments, for about $35 million in capital stock. This acquisition gave Campbell the lead over archrival H.J. Heinz in the pickle-packing business. The Vlasic acquisition was followed in 1979 by the acquisitions of seven small European food-producing companies and three small domestic operations. That same year sales topped $2 billion for the first time. In 1978 Campbell made a brief and unsuccessful foray into the Brazilian soup market.

The diversification movement started by Shaub in the early 1970s has prepared the company for long-term growth. Campbell’s debt is very low and the company’s new products and acquisitions have provided it with popular brand names in a variety of food-industry sectors. The key to growth in this mature market is diversification, and Campbell is doing just that. Shaub was responsible for changing a long-standing policy on new-product development that required a profit within the first year. Shaub’s most notable innovation, however, was his decentralization of marketing for major product lines.

To sustain these growth-oriented policies, Campbell broke with its life-long tradition of relying on internally generated funds to finance its efforts and, for the first time, entered the debt market in June, 1980 with a $100 million, ten-year offering. As a cautious food producer, Campbell’s earnings have always been healthy, if uninspiring. Shaub hoped to increase sales and profit margins. A key reason for Shaub’s determination to allow Campbell to diversify was the recognition that the market for many of these products had matured and growth had slowed.

In 1980 R. Gorden McGovern succeeded Shaub as president and Campbell made two acquisitions: Swift-Armour S.A. Argentina and a small American poultry-processing plant used by Swanson for its frozen chicken dinners. Campbell’s efforts in Argentina have not been entirely fruitful, though much of the difficulty is related to currency-transaction adjustments. Also in 1980, Campbell acquired additional bakery, pasta, and pickle operations.

In 1981 McGovern reorganized management structure, dividing the company into two new divisions—Campbell U.S.A. and Campbell International—and about 50 business groups. This new structure was meant to foster entrepreneurship and heighten management’s sensitivity to consumer opinion, long a weakness at Campbell. It also acquired Snow King Frozen Foods, a large producer of uncooked frozen specialty meats, and introduced the wildly successful Prego spaghetti sauce nationally in 1981. In 1982 Campbell acquired Mrs. Paul’s Kitchens, a processor of frozen prepared seafood and vegetables. Several of its subsidiaries also made major purchases. Vlasic Foods acquired Win Schuler Foods, a specialty-foods producer, and Pepperidge Farm completed the purchase of an apple juice processor, Costa Apple Products, with markets primarily on the East Coast. Also in 1982, Juice Bowl Products, a fruit juice processor, was acquired.

A variety of other acquisitions in the early 1980s added Annabelle’s, a restaurant chain; Triangle, a manufacturer of physical-fitness and sports-medicine products; a fresh-produce distributor; a Puerto Rican canning company; and an Italian manufacturer of premium biscuits.

McGovern further increased emphasis on marketing and new-product development in an effort to shift the company away from its production-oriented focus. McGovern also introduced Total Systems, a worker-oriented system designed to increase quality and efficiency. Total Systems is similar to the successful worker management strategies employed by many Japanese companies.

One of McGovern’s primary concerns was turning Campbell into a “market-sensitive food company.” After McGovern publicly referred to some of the company’s Swanson TV Dinner line as “junk food” in 1982, Campbell initiated Project Fix in an effort to upgrade food quality and improve packaging of its older products. One of the most important facets of McGovern’s makeover was his goal of positioning the company with consumers as “somebody who is looking after their well-being,” McGovern told Business Week in 1983. The 1983 Triangle Manufacturing purchase and 1982 formation of a health-and-fitness unit were both designed to meet that goal. Campbell’s involvement in frozen fish, juices, and produce were also part of the new market sensitivity urged by McGovern.

In addition, Campbell has attempted to market products regionally and according to age group. The central marketing department was broken into 20 regions in an effort to allow tailoring of advertising and marketing to fit each region’s peculiar demographics. For instance, its nacho cheese soup is spicier in Texas than elsewhere. The company has even begun aiming advertising of its national brands at regional audiences, with spots featuring local celebrities and locally arranged promotions. The company that, in the 1950s, reached half the nation’s homes just by sponsoring “Lassie” on TV spent 15% of its advertising budget in regional efforts in 1983. And that figure could eventually reach 50%.

McGovern increased Campbell’s sales and earnings significantly in his first few years. His encouragement of new-product development and line extensions—in areas like frozen entrees to compete with Stouffer’s, dried soups to challenge Lipton, and name-brand produce such as Farm Fresh mushrooms and tomatoes, complemented by exotic varieties of mushrooms, refrigerated salads and pasta sauces, and juices—was, however, a bit too heated. The company introduced 334 new products in the first half of the 1980s and has made more than a few costly mistakes, like the 1984 failure of Pepperidge Farm’s Star Wars cookies, which did not fit the brand’s high-quality image. Spurred on by successes like Le Menu frozen dinners, McGovern overemphasized marketing and new-product development. In 1985 the company decided to cut back on new-product gambles and McGovern reevaluated his goals and returned the company’s focus to product quality and efficiency.

Throughout this period, in which it became increasingly clear that McGovern’s plan was destined to fail, acquisitions and group formations continued, but at a pace reminiscent of the old Campbell. A Belgian food producer and 20% of Arnotts Ltd., an Australian biscuit manufacturer, were purchased in 1985. In 1986 the company bought two more American food companies and established Campbell Enterprises to oversee non-grocery products. Meanwhile new products were gradually but steadily introduced.

In 1984 John T. Dorrance Jr., the son of the inventor of condensed soup, retired as chairman of the board and became director of the board’s executive committee. He was succeeded by William S. Cashel Jr. Dorrance and other members of his family, however, still controlled 58% of Campbell’s stock and showed no interest in selling, keeping the company safe from takeover.

By 1987 Campbell decided that it was better to be safe than sorry. McGovern began selling off some of the company’s less-successful ventures. In 1987 the company sold its disappointing pet food, Triangle physical fitness, and Juice Works beverage businesses, and in 1988 the Pietro’s pizza and Annabelle’s restaurants were also sold, taking Campbell out of the restaurant business entirely.

However, the company also bought several smaller companies in 1987 and 1988 that were more compatible with its traditional lines of business, including a French cookie maker, the Open Pit barbecue sauce line, an American olive producer, and Campbell’s largest acquisition to date, Freshbake Foods Group PLC, a British producer of frozen foods. Also in 1988, Robert J. Vlasic, whose Vlasic Foods Campbell had purchased in 1978, became chairman of Campbell.

McGovern left Campbell in late 1989. His final attempt to recoup Campbell’s losses, a $343 million restructuring program, earned him little praise. Although sales had doubled during his term, profits had dropped 90% as a result of his aggressive capital commitments. In January, 1990 David W. Johnson was elected president and CEO. Johnson came to Campbell from Gerber Products Company, where he had been successful in streamlining that company’s operations. Campbell’s directors hope that Johnson’s aggressive style will also be effective in improving profitability at their own company.

Although Campbell, with a virtual lock on the soup market (an estimated 80% share) and consistent sales growth, is very well positioned for long-term growth its future is uncertain. Its management crisis was exacerbated by the death, in April, 1989, of John Dorrance. Dorrance’s 31% of the company’s stock was split between his three children, who have demonstrated an interest in preserving family control of the company. The remaining 27% of the family-owned stock is split among other members of the clan, some of whom (representing about 17.4% of the company’s stock) have expressed a desire to sell Campbell. But Chairman Vlasic had loaded the board with family members loyal to the company (six of the 15 board members are family members, including John Dorrance’s three children), so a proxy battle seems unlikely. The future of Campbell now appears to rest on CEO Johnson’s ability to provide strong leadership and the continued loyalty of the Dorrance heirs.

Principal Subsidiaries:

CSC Advertising, Inc.; Campbell Finance Corp.; Campbell Investment Co.; Campbell Sales Co.; Campbell Soup (Texas) Inc.; Casera Foods, Inc.; Domsea Farms, Inc.; Godiva Chocolatier, Inc.; Herider Farms, Inc.; Joseph Campbell Co.; Juice Bowl Products, Inc.; Martino’s Bakery, Inc.; Mrs. Paul’s Kitchens, Inc.; Pepperidge Farm, Inc.; Pepperidge Farm Mail Order Company, Inc.; Vlasic Foods, Inc.; Swift-Armour Sociedad Anonima Argentina; Campbell’s Soups (Aust.) Pty. Ltd. (Australia); N.V. Biscuits Delacre S.A. (Belgium); Campbell Europe Food and Confectionery, S.A. (Belgium); Campbell Soup Company Ltd. (Canada); Campbell Foods P.L.C. (England); Societe Francaise des Biscuits Delacre S.A. (France); Eugen Lacroix GmbH (West Germany); Campbell Soup Far East Limited (Hong Kong); D. Lazzaroni & C. S.p.A. (Italy); Campbell Japan Inc.; Campbell’s de Mexico, S.A. de C.V.; Camilar, S.A. de C.V. (Mexico); Sinalopasta, S.A. de C.V. (Mexico); European Biscuit Holding (EBN) B.V. (The Netherlands); Campbell Soup Overseas Finance N.V. (Netherlands Antilles); Compania Envasadora Loreto, S.A. (Spain); ECF Espana, S.A. (Spain); Beeck-Feinkost GmbH (West Germany).

Further Reading:

Sim, Mary B. History of Commercial Canning in New Jersey, Trenton, New Jersey, New Jersey Agricultural Society, 1951; A History, Camden, New Jersey, Campbell Soup Company, 1988.

Campbell Soup Company

One Campbell Place
Camden, New Jersey 08103-1799
U.S.A.
Telephone: (856) 342-4800
Toll Free: (800) 257-8443
Fax: (856) 342-3878
Web site: http://www.campbellsoupcompany.com

Public Company
Incorporated: 1922
Employees: 24,000
Sales: $7.11 billion (2004)
Stock Exchanges: New York Philadelphia Swiss
Ticker Symbol: CPB
NAIC: 311422 Specialty Canning; 311330 Confectionery Manufacturing from Purchased Chocolate; 311412 Frozen Specialty Food Manufacturing; 311421 Fruit and Vegetable Canning; 311423 Dried and Dehydrated Food Manufacturing; 311812 Commercial Bakeries; 311813 Frozen Cakes, Pies, and Other Pastries Manufacturing; 311821 Cookie and Cracker Manufacturing; 311919 Other Snack Food Manufacturing; 311941 Mayonnaise, Dressing, and Other Prepared Sauce Manufacturing

Campbell Soup Company is the number one maker of soups in the world, holds the top position in that category in Europe, and dominates its home market of the United States with a commanding 69 percent share. The company divides its operations into four areas. North American soup and "away from home" products includes the flagship condensed and ready-to-serve soup lines, Swanson broths, and the firm's entire Canadian business, as well as the distribution of soups, specialty entrees, beverages, other prepared foods, and bakery products through various foodservice channels. North American sauces and beverages comprises Pace Mexican sauces, Franco-American canned pastas and gravies, V8 vegetable juices and other beverages, Campbell's tomato juice, and all of the company's operations throughout Latin America and the Caribbean region, including Mexico. The biscuit and confectionery segment is made up of three subsidiaries: Pepperidge Farm, Incorporated, which specializes in cookies, crackers, breads, and frozen bakery products under the Pepperidge Farm, Goldfish, and Milano brands; Australia-based Arnotts Ltd., maker of salty snack foods, biscuits, and crackers; and Godiva Chocolatier, Inc. Campbell's manufacturing facilities include 20 plants in the United States and another 27 overseas located in Australia, Belgium, Canada, France, Germany, Indonesia, Ireland, Malaysia, Mexico, the Netherlands, Papua New Guinea, Sweden, and the United Kingdom. The company generates about 64 percent of its sales in the United States, 15 percent in Europe, 13 percent in Australia and the Asia-Pacific region, and 8 percent in other countries.

Early History

The roots of the Campbell Soup Company can be traced back to 1860, when Abraham Anderson opened a small canning factory in Camden, New Jersey. In 1869 Philadelphia produce merchant Joseph Campbell became Anderson's partner, forming Anderson and Campbell. The company canned tomatoes, vegetables, jellies, condiments, and mincemeat. In 1876 Anderson and Campbell dissolved their partnership and Campbell bought Anderson's share of the business, changing its name to Joseph Campbell & Company. In 1882 a partnership was formed between Campbell's son-in-law, Walter S. Spackman; Campbell's nephew, Joseph S. Campbell; and Arthur Dorrance, Spackman's personal friend who brought a cash infusion to the partnership. At this time the company was renamed Joseph Campbell Preserving Company. The name was changed again in 1891, to Joseph Campbell Preserve Company. The senior Campbell maintained daily involvement in the company until his death in 1900.

In 1896 the company built a large factory in Camden and expanded its product line to include prepared meats, sauces, canned fruits, ketchup, and plum pudding. The next year Arthur Dorrance hired his nephew John Thompson Dorrance, a chemical engineer and organic chemist. By 1899 John Dorrance had successfully developed a method of canning condensed soup. This innovation helped Campbell outstrip its two soup-canning competitors. While others were still shipping heavy, uncondensed soup, Campbell was able to ship and sell its product at one-third the cost. There were five original varieties: Tomato, Consommé, Vegetable, Chicken, and Oxtail. Around this same time, Campbell introduced its famous red-and-white label for its soups. As the company began increasing the variety of soups it offered, it began canning less produce, eventually leading, in 1905, to a change in company name to Joseph Campbell Company. John Dorrance became director of the company in 1900.

Campbell's soup began finding its way into American kitchens at a time when the prepared-food industry was growing rapidly yet was still small. By 1904 the company sold 16 million cans of soup a year. That same year, in order to provide workers with something to do in the middle of the day when the soup stock was in the midst of its long simmering time, the company began making and selling Pork and Beans. Also that year, the Campbell Kids were introduced as advertising characters. Boasting 21 varieties of soup by this time, Campbell began to eye a bigger market; in 1911 Campbell began selling its products in California, thus becoming one of the first companies to serve the entire nation.

In 1910 Dorrance was made general manager of the company, and in 1914 he became president. Dorrance focused on soup and discontinued the marginal line of ketchups, preserves, and jams. In 1915 Dorrance became sole owner of Campbell when he bought out his uncle, Arthur Dorrance. A marketing genius, Dorrance boosted sales of soup by pushing the idea of using condensed soup as an ingredient in easy-to-make recipes. The first of many Campbell cookbooks, Helps for the Hostess, was published in 1916.

In 1912 Campbell began growing its own produce in an effort to standardize quality. This program was the first of an ongoing series of efforts Campbell made to grow what it processed. At that time, during the eight summer weeks in which tomatoes were harvested, the Campbell plant devoted its entire effort to the production of tomato soup and tomato juice. During World War I almost half of Campbell's sales were from these two products. Meantime, in 1915, Campbell acquired the Franco-American Food Company. In addition to being the first American soup-maker, Franco-American was also a producer of other foods. Although the use of the Franco-American brand for soups was halted, the brand continued for spaghetti and other pasta products.

Incorporated in 1922

In 1922 the company was incorporated as the Campbell Soup Company, centering the company on its most famous and profitable product. One year later, Arthur C. Dorrance, John Dorrance's brother, became Campbell's general manager. In 1929 Arthur C. Dorrance was made a director and vice-president of the board of directors. When John Dorrance died in 1930, Arthur C. Dorrance was elected president.

Throughout this period Campbell continued to grow. In 1929 the company opened a second major facility in Chicago. In the early 1930s Campbell opened Campbell Soup Company Ltd., in Canada, as well as Campbell's Soups Ltd., in Great Britain. In 1936 Campbell began making its own cans and in 1939 its agricultural research department was formed. On the product front, both Cream of Mushroom and Chicken Noodle soups were introduced in 1934, Campbell's Tomato Juice debuted in 1938, and Cream of Chicken hit store shelves in 1947. Campbell began backing these introductions with radio advertising in 1931, using the famous "M'm! M'm! Good!" slogan. Meantime, the company published its first full-length cookbook in 1941, titling it Easy Ways to Good Meals. In 1942 sales topped $100 million for the first time. Arthur C. Dorrance died in 1946, and James McGowen, Jr., became president. The following year Campbell began growing its own mushrooms in Prince Crossing, Illinois, and it opened its third soup plant, in Sacramento, California. In 1950 the first Campbell television commercials were broadcast.

Acquisition of Swanson: 1955

Despite this growth, Campbell was slow to diversify. In 1948 the company acquired V-8 juice, but its first major purchase was not made until 1955, when it bought the Omaha, Nebraska-based C.A. Swanson & Sons, producers of the first complete-meal frozen entrees called TV dinners.

In the midst of this growth, W.B. Murphy was elected president, following McGowan's retirement in 1953. In 1954 Campbell took its stock public on the New York Stock Exchange and, in 1957, the company formed an international division to oversee its foreign concerns. In 1958 sales exceeded $500 million for the first time and Campbell established Campbell's Soups, S.p.A. in Italy. This venture was followed, in 1959, by the opening of subsidiaries in Mexico and Australia.

Company Perspectives:

In July 2001, we launched a bold plan—and made a massive commitment—to transform Campbell Soup Company. Despite many challenges, it is now clear that we have renewed, revitalized, and reinvigorated our company and put it back on a growth track. We've rebuilt our organization, recharged our brands, and reinforced our market positions around the world. We are clearly better as a company, and ready for the next phase of our transformation: driving quality growth in everything we do.

Several Acquisitions Marking the 1960s

Throughout the 1960s Campbell was conservatively managed and quite successful. In that decade the company opened two mushroom growing facilities and 11 new plants on three continents. New products continued to be rolled out, with two particularly noteworthy: Franco-American SpaghettiOs, which debuted in 1965, and Goldfish crackers, introduced by Pepperidge Farm in 1962. During the decade Campbell's growth—which underwent a slight shift in emphasis—began to include regular acquisitions in addition to internal expansion. In 1961 Campbell acquired Pepperidge Farm, Incorporated, a maker of quality baked goods, and a similar Belgian company, Biscuits Delacre. In 1965 Campbell created a foodservice division and, in 1966, began marketing EfficienC, its own brand of foodservice products through that division. Also in 1966 Campbell formed Godiva Chocolatier to distribute the Belgian-made chocolates in the United States. In 1974 the company completed a purchase of the European Godiva company and became its sole owner. Campbell created Champion Valley Farms, Inc., a pet food concern, in 1969.

During the 1970s the company's slow but steady growth continued. Campbell, which had built its fortune on Dorrance's invention of condensed soup, introduced the Chunky brand of ready-to-serve soups in 1970. This became a highly successful enterprise. In 1971, for the first time, Campbell's sales topped $1 billion. In 1972 Murphy retired and was replaced as president by Harold A. Shaub. Also that year, Swanson introduced Hungry Man meals, a line of frozen dinners with larger-than-average portions.

Diversifying in the 1970s and 1980s

In 1973 Campbell acquired Pietro's Pizza Parlors, a chain based in the Pacific Northwest. This led, in 1974, to the formation of a restaurant division, and heralded Campbell's intention to add more restaurants to its growing list of subsidiaries.

In 1978 Campbell purchased Vlasic Foods, Inc., a Michigan-based producer of pickles and similar condiments, for approximately $35 million in capital stock. This acquisition gave Campbell the lead over archrival H.J. Heinz Company in the pickle-packing business. Campbell added seven small European food producing companies and three domestic operations in 1979. That same year sales topped $2 billion for the first time. In 1978 Campbell made a brief and unsuccessful foray into the Brazilian soup market.

The diversification movement started by Shaub in the early 1970s prepared the company for long-term growth. Campbell's debt remained low and the company's new products and acquisitions provided it with popular brand names in a variety of food industry sectors. Campbell realized that the key to growth in this mature market was diversification. Shaub changed a longstanding policy on new product development requiring a profit within the first year. His most notable innovation, however, was his decentralization of marketing for major product lines.

To sustain these growth-oriented policies, Campbell broke its tradition of relying on internally generated funds to finance its efforts. In June 1980 the company entered the debt market with a $100 million ten-year offering. As a cautious food producer, Campbell's earnings had always been healthy, but Shaub hoped to increase both sales and profit margins. A key reason for Shaub's determination to allow Campbell to diversify was the recognition that the market for many of these products had matured and growth had slowed.

In 1980 R. Gorden McGovern succeeded Shaub as president and Campbell made two acquisitions—Swift-Armour S.A. Argentina and a small American poultry processing plant used by Swanson for its frozen chicken dinners. Campbell's efforts in Argentina were not entirely fruitful, with much of the difficulty related to currency-transaction adjustments. Also in 1980 Campbell acquired additional bakery, pasta, and pickle operations.

In 1981 McGovern reorganized Campbell's management structure, dividing the company into two new divisions—Campbell U.S.A. and Campbell International—and about 50 business groups. This new structure was meant to foster entrepreneurship and heighten management's sensitivity to consumer opinion, long a weakness at Campbell. The company acquired Snow King Frozen Foods, a large producer of uncooked frozen specialty meats, and introduced the wildly successful Prego spaghetti sauce nationally in 1981. In 1982 Campbell acquired Mrs. Paul's Kitchens, a processor of frozen prepared seafood and vegetables. Several of the company's subsidiaries also made major purchases. Vlasic Foods acquired Win Schuler Foods, a specialty foods producer, and Pepperidge Farm completed the purchase of an apple juice processor, Costa Apple Products, with markets primarily on the East Coast. Also in 1982, Juice Bowl Products, a fruit juice processor, was acquired.

Key Dates:

1869:

Joseph Campbell and Abraham Anderson form a partnership, Anderson and Campbell, in Camden, New Jersey, to can tomatoes, vegetables, jellies, condiments, and mincemeat.

1876:

Partnership is dissolved; Campbell buys out Anderson's interest, changing the name of the firm to Joseph Campbell & Company.

1882:

New partnership is formed under the name Joseph Campbell Preserving Company.

1899:

Company successfully develops method of canning condensed soup.

1905:

Company's name changes to Joseph Campbell Company.

1911:

Campbell's soups are first marketed in California, providing the brand with national distribution.

1915:

Franco-American Food Company is acquired.

1922:

Company is incorporated as Campbell Soup Company.

1931:

Campbell ventures into radio advertising.

1954:

Company takes its stock public on the New York Stock Exchange.

1955:

Acquisition of C.A. Swanson & Sons, originator of the TV dinner, takes Campbell into frozen foods.

1961:

Pepperidge Farm, Incorporated is acquired.

1970:

Chunky ready-to-serve soups make their debut.

1974:

Campbell acquires full control of Godiva Chocolatier, Inc.

1978:

Vlasic Foods, Inc. is acquired.

1981:

Prego spaghetti sauces are introduced.

1995:

Campbell pays $1.1 billion for Pace Foods Ltd.

1998:

Company spins off its specialty foods segment, including Vlasic pickles and Swanson frozen foods; Campbell is now focused on four core areas: soups, sauces and beverages, biscuits and confectionery, and foodservice.

2001:

Several European dry soup and bouillon brands are acquired from Unilever for $900 million; under new leader Douglas R. Conant, Campbell launches major revitalization program.

A variety of other acquisitions in the early 1980s added Annabelle's, a restaurant chain; Triangle Manufacturing, a manufacturer of physical fitness and sports-medicine products; a fresh produce distributor; a Puerto Rican canning company; and an Italian manufacturer of premium biscuits.

Marketing Emphasis Began in the 1980s

McGovern further increased emphasis on marketing and new product development in an effort to shift the company away from its production-oriented focus. McGovern also introduced Total Systems, a worker-oriented system designed to increase quality and efficiency that was similar to the successful worker management strategies employed by many Japanese companies.

One of McGovern's primary concerns was turning Campbell into a "market-sensitive food company." After McGovern publicly referred to some of the company's Swanson TV dinner line as "junk food" in 1982, Campbell initiated Project Fix in an effort to upgrade food quality and improve packaging of its older products. As McGovern told Business Week in 1983, one of the most important facets of his makeover was helping the company personify "somebody who is looking after [consumers'] well-being." The 1983 Triangle Manufacturing purchase and 1982 formation of a health and fitness unit were both designed to meet that goal. Campbell's involvement in frozen fish, juices, and produce were also part of the new market sensitivity urged by McGovern.

In addition, Campbell attempted to market products regionally and according to age group. The central marketing system was broken into 20 regions to allow tailoring of advertising and marketing to fit each region's peculiar demographics. For instance, the company sold spicier nacho cheese soup in Texas than in the rest of the country. The company also aimed its national brands at regional audiences, with spots featuring local celebrities and locally arranged promotions. Campbell, which reached half the nation's homes just by sponsoring the television show Lassie in the 1950s, spent 15 percent of its advertising budget in regional efforts in 1983. That figure was expected eventually to reach 50 percent.

McGovern increased Campbell's sales and earnings significantly in his first few years. His encouragement of new product development and line extensions may have been overzealous. The company introduced frozen entrees to compete with Stouffer's, dried soups to challenge Lipton, and name-brand produce such as Farm Fresh mushrooms and tomatoes, complemented by exotic varieties of mushrooms, refrigerated salads and pasta sauces, and juices. In all, Campbell introduced 334 new products in the first half of the 1980s. This included several costly mistakes, such as the 1984 failure of Pepperidge Farm's Star Wars cookies, which did not fit the brand's high-quality image. Yet spurred on by successes such as Le Menu frozen dinners, McGovern concentrated on marketing and new product development. In 1985, however, the company decided to cut back on new product gambles and McGovern reevaluated his goals and returned the company's focus to product quality and efficiency.

Throughout this period, during which it became increasingly clear that McGovern's plan was destined to fail, acquisitions and group formations continued, but at a pace reminiscent of the old Campbell. The company purchased a Belgian food producer and 20 percent of Arnotts Ltd., an Australian biscuit manufacturer, in 1985. In 1986 the company bought two more American food companies and established Campbell Enterprises to oversee non-grocery products. Meanwhile new products were gradually but steadily introduced.

In 1984 John T. Dorrance, Jr., the son of condensed soup's inventor, retired as chairman of the board and became director of the board's executive committee. He was succeeded as chairman by William S. Cashel, Jr. Dorrance and other members of his family, however, still controlled 58 percent of Campbell's stock and showed no interest in selling, keeping the company safe from takeover.

By 1987 McGovern began selling off some of Campbell's less successful ventures. In 1987 the company sold its disappointing Valley Farms pet food, Triangle physical fitness, and Juice Works beverage businesses. In 1988 the Pietro's pizza and Annabelle's restaurants were also sold, taking Campbell out of the restaurant business entirely.

However, Campbell also bought several smaller companies in 1987 and 1988 that were more compatible with its traditional lines of business. These included a French cookie maker, the Open Pit barbecue sauce line, an American olive producer, and Campbell's largest acquisition to date, Freshbake Foods Group PLC, a British producer of frozen foods. Also in 1988, Robert J. Vlasic, whose Vlasic Foods Campbell had purchased in 1978, became chairman of Campbell.

Campbell's management crisis was exacerbated by the death, in April 1989, of John Dorrance. Dorrance's 31 percent of the company's stock was split between his three children, who demonstrated an interest in preserving family control of the company. The remaining 27 percent of the family-owned stock was split among other members of the clan, some of whom (representing about 17.4 percent of the company's stock) expressed a desire to sell Campbell. Chairman Vlasic, however, had loaded the board with family members loyal to the company (six of the 15 board members were family members, including John Dorrance's three children), so a proxy battle never materialized.

McGovern—who failed in an attempt to merge the company with the Quaker Oats Company in 1989—left Campbell that same year. His final attempt to recoup Campbell's losses, a $343 million restructuring program, earned him little praise. Although sales had doubled during his term, profits had dropped 90 percent as a result of his aggressive capital commitments. From 1988 to 1990 alone, earnings fell from $274.1 million to $4.4 million.

Back to Basics in the 1990s

In January 1990 David W. Johnson was elected president and CEO. Johnson came to Campbell from Gerber Products Company, where he had been successful in streamlining that company's operations. Johnson employed a back-to-basics strategy that called for drastic restructuring. The new CEO oversaw the divestment of whole businesses, including mushroom farms, a salmon processing plant, the refrigerated salads line, and cookie maker Lazzaroni. By June 1991, Johnson had closed or sold 20 plants worldwide, reduced the company's 51,700 person workforce by 15.5 percent, and pulled unprofitable lines from store shelves. While Johnson purported to support marketing, he also cut Campbell's advertising budget.

Johnson was most interested in promoting the company's core product, soup. Even into the early 1990s, Campbell soups had 66 percent, or $1.6 billion, of the $2.6 billion U.S. soup market, which contributed almost half of the conglomerate's $570 million in operating profits.

In anticipation of the North American Free Trade Agreement, Johnson also supervised the merging of Campbell's Canadian operations, some Mexican companies, and the U.S. businesses into one division called Campbell North America. Late in 1991, Campbell also focused on the impending European Community's single market, which promised 344 million consumers (50 percent more than the United States) and had potential for future growth. The cookie subsidiary of Campbell Soup, Campbell Biscuits Europe, got a head start on the market in February 1990, when it reorganized its European corporate structure, consolidated marketing, and standardized packaging.

By the end of 1991, some indicators showed that Johnson's efforts had paid off: Campbell's earnings through the first three quarters of 1991 had risen 33 percent, making the company's profits the second fastest-growing in the food industry. But some analysts warned that the profits came at the expense of core brand promotion, which was cut in 1991. The growth in earnings was not based on sales increases, which only rose 1.9 percent during the same period.

Johnson was given an overall good rating in the quick turnaround at Campbell. In 1992 the company made bolder goals, with a vision expressed as "Campbell Brands Preferred Around the World." The plan made further preparations for the European Community's single market and expanded those efforts around the world. The company was reorganized into three multinational divisions: Campbell North and South America grouped Campbell's Swift-Armour subsidiary in Argentina with the previously organized North American group; Campbell Biscuit and Bakery united Pepperidge Farm in North America with Delacre in Europe and Australia's leading biscuit company, Arnotts Ltd. (of which Campbell by then owned 58 percent); Campbell Europe/Asia was a growth-oriented division that comprised the company's "greatest opportunity and challenge," according to the 1992 annual report.

In 1993 Vlasic retired as chairman, with Johnson taking on this additional title. Also, Bennett Dorrance, a grandson of condensed soup inventor John Dorrance, was named vice-chairman of Campbell Soup. Bennett Dorrance represented the Dorrance family's interests on the board of directors and took an active role, particularly in tying executive pay to performance and putting oversight practices into place. The family's power was soon diminished somewhat, after Bennett's brother, John T. Dorrance III, sold most of his stake in the company by late 1996, leaving the family in control of 44 percent of the stock. No attempts at a takeover—hostile or otherwise—were immediately evident, however.

Johnson continued to restructure Campbell as the decade continued. The company recorded a $300 million restructuring charge in 1993 in relation to the divestment of several underperforming units. That year also saw the launch of a new soup campaign using the slogan "Never Underestimate the Power of Soup." The Mrs. Paul's frozen seafood line was sold to Pillsbury Co.'s Van de Kamp's unit in 1996. Altogether, Johnson dumped $500 million worth of noncore, underperforming assets from 1990 through 1996.

Simultaneously Johnson led Campbell Soup in a more aggressive overseas push and sought out compatible acquisitions. In addition to a big push into the Mexican soup market, the company in 1993 began selling V8 vegetable juice in Europe and established a joint venture with Nakano Vinegar Co. Ltd. to market Campbell's soups in Japan. In January 1995 Campbell completed the largest acquisition in its long history, paying $1.1 billion for Pace Foods Ltd., the leading maker of Mexican sauces (picante and salsa) with 1994 sales of more than $200 million. Later in 1995, the company picked up Greenfield Healthy Foods, the number one maker of fat-free brownies and cookies for the health and convenience store markets, and Fresh Start Bakeries, a supplier of baked goods to fast-food restaurants. The latter, however, was sold in 1999.

Campbell Soup continued its overseas push with the 1996 purchases of Homepride, the leading cooking sauce brand in the United Kingdom, and the Cheong Chan soup and sauce business in Asia; and the 1997 acquisition of Erasco Group, the leading seller of canned soup in Germany, from Grand Metropolitan PLC for $210 million. Also in 1997 Arnotts acquired the Sydney, Australia-based Kettle Chip Company. Campbell then the following year spent about $290 million to purchase the remainder of Arnotts, making it a wholly owned subsidiary. Campbell also extended its soup business in Europe through the $180 million acquisition of the Liebig soup business of France. Even with all of these foreign maneuvers, Campbell was far from a goal Johnson had set in 1993 of increasing overseas operations to 50 percent of sales by 2000. The figure had stood at 28 percent in 1993 and had risen to 31 percent in 1994, but by 1998 was back at 28 percent.

Despite the lack of progress toward this goal, Johnson had succeeded in improving Campbell Soup's profitability thanks to his aggressive restructuring efforts. The company's net profit margin stood at 10.4 percent for 1996, compared to 5 percent for 1988 and 6.5 percent for 1991. But Johnson was not finished with his tinkering. Campbell recorded restructuring charges of $204 million in 1997 and $262 million in 1998 related to plant closures and the divestment of nonstrategic businesses. Jettisoned in 1997 were the Marie's salad dressing and dip unit, the company's Argentinean beef operations, and its German chilled foods business, Beeck-Feinkost GmbH.

After the installation of Dale F. Morrison as president and CEO (with Johnson remaining chairman), Campbell Soup made its most dramatic divestment yet. In March 1998 the company completed the spinoff of its Specialty Foods segment, which included seven noncore businesses. The $1.5 billion spinoff created a new public company, Vlasic Foods International Inc., which included Vlasic pickles, Swanson frozen foods, Swift Armour meats in Argentina, Open Pit barbecue sauce, U.K. canned foodmaker Stratford Upon Avon, Gourmet Specialty Foods of Germany, and a fresh mushroom business in the United States. This move left Campbell Soup with four main core business segments: soups, sauces and beverages, biscuits and confectionery, and foodservice. The 1998 dealmaking was not quite over, however, as Campbell sold Delacre, its European biscuit business, to United Biscuit (Holdings) PLC for $125 million in cash in June—leaving Pepperidge Farm and Arnotts as its mainstays in biscuits and crackers. In June the company sold its can-making assets to Stamford, Connecticut-based Silgan Holdings Inc. for $123 million. In August Campbell completed the purchase of Fortun Foods, maker of StockPot soup, the market leader in premium refrigerated soups, a rapidly growing segment of the foodservice sector.

According to Business Week, Morrison warned employees in the fall of 1997, "We are driving the incredibly shrinking company." Reduced to a much more manageable core of leading brands, Campbell faced a number of challenges. In addition to the slower than expected growth in international sales, Campbell's canned soup sales in the United States were on the decline, leading to the implementation in 1998 of the largest advertising campaign in company history, which centered around a new slogan, "Good for the Body, Good for the Soul." It was clear by this time that increasingly convenience-minded consumers were losing their appetites for condensed soups—both for eating as soups and for using to prepare meals. Campbell therefore also introduced in 1998 and 1999 several new convenience products in an attempt to recharge sales. These included ready-to-serve Tomato soup in a resealable bottle; Campbell's Soup to Go single-serving, microwavable soups; and the Campbell's Select line of ready-to-serve soups. The cans for the ready-to-serve soups were soon redesigned with easy-open pop-top lids, but the most noticeable change for the entire Campbell's soup line was the first major overhaul of the labels since the now-iconic design was first used more than 100 years previous. In the fall of 1999 the new labels debuted. While they remained red and white, the Campbell's script logo was smaller and each can showed a steaming bowl of the variety inside. In July 1999, meantime, Johnson retired from his remaining position as chairman. A longtime member of the board, Philip E. Lippincott, succeeded him.

Launch of Revitalization Drive in Early 2000s

Johnson's retirement proved short-lived. The board of directors and the founding Dorrance family, which continued to own more than 50 percent of the company, had grown dissatisfied with the company's performance, particularly its stock price. Under pressure from the board, Morrison tendered his resignation in March 2000. Johnson was brought back on an interim basis while a search for a permanent successor was launched. During this interregnum, Johnson reintroduced the famous "M'm! M'm! Good!" slogan in Campbell's advertising, replacing the poorly received "We Have a Soup for That" campaign.

In January 2001 Douglas R. Conant was brought onboard as the new president and CEO. A 25-year food industry veteran, Conant had experience at three of the largest food companies in the world: General Mills, Inc., the Kraft Foods unit of Philip Morris Companies Inc., and Nabisco Holdings Corp. He had most recently served as president of Nabisco Holdings' Nabisco Foods unit, a maker of snacks such as LifeSavers candies and Planters Nuts and condiments such as Grey Poupon mustard.

Just weeks after Conant began at Campbell, the company announced its biggest acquisition since the 1995 purchase of Pace. In a deal completed in May 2001, Campbell paid Unilever about $900 million for several dry soup and bouillon brands in Europe, including Oxo, Batchelors, Heisse Tasse, Bla° Band, and Royco. These additions made Campbell the largest soup seller in most of Europe and increased its share of the overall European soup market from 20 percent to 30 percent. In August 2001 George M. Sherman, former CEO of Danaher Corporation and a Campbell director since 1995, was named chairman, replacing Lippincott.

In July 2001 Conant launched a three-year "transformation plan" to revitalize the ailing company. Dividends were slashed to free up funds to improve the quality of the soup line and significantly increase marketing outlays not only for soups but also for nonsoup brands such as Prego and Franco-American. On the quality front, Campbell began overhauling the way it made soups, most notably by switching to a "cold-blending" process, which allowed ingredients to be added at different points in the cooking process rather than all at once. This process helped the broth stay clear and the vegetables retain their crunch. Other improvements were in the form of an increase in the amount of a key ingredient. For example, the amount of chicken in Chunky Chicken Corn Chowder was increased by one-third, while Alphabet soup gained 40 percent more letters. In addition, as sales of Campbell's condensed soups continued to fall—increasingly because of the rise of private-label competition—the company pushed to develop new lines of convenience soups. In 2002, for example, Campbell's Soup at Hand debuted. Designed for on-the-go eating, these sippable soups were sold in an easy-open, plastic, microwavable container that could be held in one hand like a soda can. The next year, Campbell began selling its Chunky and Select soups in microwavable bowls. The company also expanded its product portfolio through acquisition during this period. In 2002 Campbell strengthened its position in the Australia snack food market by acquiring Snack Foods Limited, that country's number two maker of salty snacks. Also acquired that year was Erin Foods, the second largest dry soup company in Ireland.

Results for 2003 were somewhat lukewarm but better than that of the previous several years. Although condensed soup sales continued to fall, overall sales increased 9 percent, to $6.68 billion, aided by an 8 percent increase in ready-to-serve soup shipments and continued strong performance for the V-8 and Pace brands and at the Pepperidge Farm and Godiva subsidiaries. More changes were implemented during 2004 to build upon the success of the previous three years. Campbell's North American business was reorganized into four units: U.S. soup, sauces, and beverages; operations in Canada, Mexico, and Latin America, plus the company's foodservice business; Pepperidge Farm; and Godiva. A new plan to "drive quality growth" included the layoff of 400 employees from the worldwide payroll of 25,000, the implementation of a new sales and distribution system in Australia, and $32 million in pretax charges for these initiatives. Campbell set goals of attaining net sales growth of 3 to 4 percent per year and earnings per share growth of 5 to 7 percent per year. Among other developments in 2004, Campbell dropped the Franco-American name from its SpaghettiOs line of canned pasta products in favor of the Campbell's name in an attempt to leverage the strength of the flagship brand. In addition, Sherman retired as chairman. Replacing him was Harvey Golub, former chairman and CEO of American Express Company and a Campbell director since 1996.

Principal Subsidiaries

Arnotts Ltd. (Australia); Campbell Australasia Pty. Ltd. (Australia); Campbell Cheong Chan Malaysia Sdn. Bhd.; Campbell Company of Canada; Campbell Foods Belgium n.v./s.a.; Campbell Foodservice Company; Campbell France S.A.S.; Campbell Japan Inc.; Campbell Soup Asia Ltd. (Hong Kong); Campbell Soup Ireland Limited; Campbell Soup Sweden AB; Campbell Soup Trading (Shanghai) Co. Ltd. (China); Campbell Soup UK Limited; Campbell Southeast Asia Sdn. Bhd. (Malaysia); Campbell's de Mexico S.A. de C.V.; Campbell's Germany GmbH; Campbell's Netherlands B.V.; Campbell's U.K. Limited; Continental Foods S.A. (France); Erin Foods Limited (Ireland); Eugen Lacroix GmbH (Germany); Godiva Chocolatier, Inc.; Joseph Campbell Company; Pepperidge Farm, Incorporated; Sinalopasta S.A. de C.V. (Mexico); Snack Foods Limited (Australia); Stockpot Inc.

Principal Competitors

General Mills, Inc.; Kraft Foods Inc.; H.J. Heinz Company; Unilever; Sara Lee Bakery Group; Kellogg Company.

Further Reading

Barrett, Amy, "Campbell Soup: Hail to the Chef," Financial World, June 11, 1991, pp. 52–54.

——, "Campbell's Wet Noodles," Business Week, January 25, 1999, p. 48.

——, "Souping Up Campbell's," Business Week, November 3, 1997, pp. 70, 72.

Berman, Phyllis, and Alexandra Alger, "Reclaiming the Patrimony," Forbes, March 14, 1994, p. 50.

Branch, Shelly, "Campbell Bets on Famous Old Slogan to Pull It Out of Sales Slump," Wall Street Journal, September 6, 2000, p. B1.

——, "Campbell's Soup Shipments Rise As Buyers Stock Pantries," Wall Street Journal, November 15, 2001, p. B4.

——, "Campbell to Buy Soup Brands of Unilever," Wall Street Journal, January 30, 2001, p. B11.

Briggs, Jean A., and Barbara Rudolph, "Mmm, Mmm, Not So Good," Forbes, December 7, 1981, pp. 44+.

"Campbell: Now It's M-M-Global," Business Week, March 15, 1993, pp. 52–54.

"Campbell Soup: Widening Its Menu and Looking Beyond Food," Business Week, August 11, 1980, pp. 85+.

Collins, Douglas, America's Favorite Food: The Story of Campbell Soup Company, New York: Abrams, 1994, 216 p.

Donlon, J.P., "Top Spoon Stirs It Up," Chief Executive, November 1996, pp. 44–47.

Dugas, Christine, and Anthony Bianco, "Marketing's New Look: Campbell Leads a Revolution in the Way Consumer Products Are Sold," Business Week, January 26, 1987, pp. 64+.

Dwyer, Steve, "Red Alert: The Soup's Back On," Prepared Foods, September 1997, pp. 14–16, 18, 21, 23.

Eklund, Christopher S., "Campbell Soup's Recipe for Growth: Offering Something for Every Palate," Business Week, December 24, 1984, pp. 66+.

Ellison, Sarah, "Campbell Hopes Portable Soups Will Reheat Its Sluggish Sales," Wall Street Journal, February 18, 2003, p. B4.

——, "Inside Campbell's Big Bet: Heating Up Condensed Soup," Wall Street Journal, July 31, 2003, p. A1.

Fairclough, Gordon, "Campbell's Recipe for Higher Profit: Reheat Soup Sales," Wall Street Journal, May 19, 1999, p. B6.

"From Soup to Nuts and Back to Soup," Business Week, November 5, 1990, pp. 114, 116.

Glosserman, Brad, "Campbell Soup Works for Spill Over Effect," Japan Times Weekly International Edition, May 11–May 17, 1992, p. 17.

Grant, Linda, "Stirring It Up at Campbell," Fortune, May 13, 1996, p. 80.

Hays, Constance L., "Will Goldfish Tactics Help Campbell's Soups?," New York Times, October 18, 1998, sec. 3, p. 4.

A History, Camden, N.J.: Campbell Soup Company, 1988.

Mastrull, Diane, "Campbell and Pace Recipe: A Mixing of Disparate Cultures," Philadelphia Business Journal, February 17, 1995, pp. 1, 27, 28.

Nulty, Peter, "The National Business Hall of Fame," Fortune, March 11, 1991, pp. 98–103.

O'Connell, Vanessa, "Campbell Decides Its IQ Health Meals May Be Ahead of the Curve for Foods," Wall Street Journal, April 27, 1998, p. B8.

——, "Campbell Sees Profit Shortfall and Stock Gets Creamed," Wall Street Journal, January 12, 1999, p. B4.

——, "Changing Tastes Dent Campbell's Canned-Soup Sales," Wall Street Journal, April 28, 1998, pp. B1, B25.

——, "How Campbell Saw a Breakthrough Menu Turn into Leftovers," Wall Street Journal, October 6, 1998, pp. A1, A12.

Pehanich, Mike, "Brand Power," Prepared Foods, Mid-April 1993, pp. 38–40, 42.

Saporito, Bill, "Campbell Soup Gets Piping Hot," Fortune, September 9, 1991, pp. 142–48.

——, "The Fly in Campbell's Soup," Fortune, May 9, 1988, pp. 67+.

"Seizing the Dark Day," Business Week, January 13, 1992, pp. 26–28.

Sim, Mary B., History of Commercial Canning in New Jersey, Trenton, N.J.: New Jersey Agricultural Society, 1951.

Weber, Joseph, "Campbell Is Bubbling, but for How Long?," Business Week, June 17, 1991, pp. 56–57.

——, "M'm! M'm! Bad! Trouble at Campbell Soup," Business Week, September 25, 1989, pp. 68+.

——, "What's Not Cookin' at Campbell's," Business Week, September 23, 1996, p. 40.

Wentz, Laurel, "Europe: How Smart Marketers Cash In," Advertising Age, December 2, 1991, pp. S-1, S-9.

Wimp, Marilyn, "Campbell Spins Off Frozen Food, Pickles," Philadelphia Business Journal, March 27, 1998, p. 20.

—updates: April Dougal Gasbarre;

David E. Salamie

Campbell Soup Company

Campbell Place
Camden, New Jersey 08103-1799
U.S.A.
(609) 342-4800
(800) 909-SOUP; (800) 909-7687
Fax: (609) 342-3878
Web site: http://www.campbellsoup.com

Public Company
Incorporated: 1922
Employees: 24,256
Sales: $6.70 billion (1998)
Stock Exchanges: New York Philadelphia London Swiss
Ticker Symbol: CPB

SICs: 2015 Poultry Slaughtering & Processing; 2032 Canned Specialties; 2034 Dried & Dehydrated Fruits, Vegetables & Soup Mixes; 2035 Pickled Fruits & Vegetables, Salad Dressings, Vegetable Sauces & Seasonings; 2051 Bread, Cake & Related Products; 2052 Cookies & Crackers; 2066 Chocolate & Cocoa Products; 2096 Potato Chips, Corn Chips & Similar Snacks; 2099 Food Preparations, Not Elsewhere Classified

Campbell Soup Company is the number one maker of soups in the United States and is also a leading manufacturer of other food products. Campbell divides its operations into three areas: soups and sauces, biscuits and confectionery, and a foodservice unit. The first of these includes the flagship soup line, Prego spaghetti sauce, Franco-American pastas and gravies, Pace Mexican foods, Swanson broths, and V8 beverages. The second comprises three main businesses—Pepperidge Farm (which itself includes the Milano and Goldfish brands), Godiva Chocolatier, and Australia-based Arnotts. The foodservice unit is responsible for distributing products—such as Campbell’s Restaurant Soups, Pace Tabletop picante sauce, and Campbell’s Specialty Kitchens entrees—to the foodservice and home meal replacement markets. Campbell Soup Company generates about 72 percent of its sales in the United States, 13 percent in Europe, nine percent in Australia and the Asia-Pacific region, and six percent in other countries.

Early History

The roots of the Campbell Soup Company can be traced back to 1860, when Abraham Anderson opened a small canning factory in Camden, New Jersey. In 1869 Philadelphia produce merchant Joseph Campbell became Anderson’s partner, forming Anderson and Campbell. The company canned vegetables, mince meat, jams and jellies, and a variety of soups. In 1876 Anderson and Campbell dissolved their partnership and Campbell bought Anderson’s share of the business, changing its name to Joseph Campbell Preserve Company. In 1882 a partnership was formed between Campbell’s son-in-law, Walter S. Spack-man; Campbell’s nephew, Joseph S. Campbell; and Arthur Dorranee, Spackman’s personal friend who brought a cash infusion to the partnership. At this time the company was renamed Joseph Campbell Preserving Company. The senior Campbell maintained daily involvement in the company until his death in 1900.

In 1896 the company built a large factory in Camden and expanded its product line to include prepared meats, sauces, canned fruits, ketchup, and plum pudding. The next year Arthur Dorrance hired his nephew John Thompson Dorrance, a chemical engineer and organic chemist. By 1899 John Dorrance had successfully developed a method of canning condensed soup. This innovation helped Campbell outstrip its two soup-canning competitors. While others were still shipping heavy, uncondensed soup, Campbell was able to ship and sell its product at one-third the cost. As the company began increasing the variety of soups it offered, it began canning less produce. John Dorrance became director of the company in 1900 and soon after the company was renamed the Joseph Campbell Company.

Campbell’s soup began finding its way into American kitchens at a time when the prepared-food industry was growing rapidly yet was still small. By 1904 the company sold 16 million cans of soup a year. Boasting 21 varieties of soup by 1905, Campbell began to eye a bigger market; in 1911 Campbell began selling its products in California, thus becoming one of the first companies to serve the entire nation.

In 1910 Dorrance was made general manager of the company, and in 1914 he became president. Dorrance focused on soup and discontinued the marginal line of ketchups, preserves, and jams. In 1915 Dorrance became sole owner of Campbell when he bought out his uncle, Arthur Dorrance.

In 1912 Campbell began growing its own produce in an effort to standardize quality. This program was the first of an ongoing series of efforts Campbell made to grow what it processed. At that time, during the eight summer weeks in which tomatoes were harvested, the Campbell plant devoted its entire effort to the production of tomato soup and tomato juice. During World War I almost half of Campbell’s sales were from these two products.

Incorporated in 1922

In 1921 Campbell acquired the Franco-American Food Company, and the next year the company was incorporated as the Campbell Soup Company. In 1923 Arthur C. Dorrance, John Dorrance’s brother, became Campbell’s general manager. In 1929 Arthur C. Dorrance was made a director and vice-president of the board of directors. When John Dorrance died in 1930, Arthur C. Dorrance was elected president.

Throughout this period Campbell continued to grow. In 1929 the company opened a second major facility in Chicago. In the early 1930s Campbell opened Campbell Soup Company Ltd., in Canada, as well as Campbell’s Soups Ltd., in Great Britain. In 1936 Campbell began making its own cans and in 1939 its agricultural research department was formed. In 1942 sales topped $100 million for the first time. In 1946 Arthur C. Dorrance died and James McGowen, Jr., became president. The following year Campbell began growing its own mushrooms in Prince Crossing, Illinois.

Acquired Swanson in 1955

Despite this growth, Campbell was slow to diversify. In 1948 the company acquired V-8 juice, but its first major purchase was not made until 1955, when it bought the Omaha, Nebraska-based C.A. Swanson & Sons, producers of the first complete-meal frozen entrees called TV dinners.

In the midst of this growth, W.B. Murphy was elected president, following McGowan’s retirement in 1953. In 1954 Campbell took its stock public and, in 1957, the company formed an international division to oversee its foreign concerns. In 1958 sales exceeded $500 million for the first time and Campbell established Campbell’s Soups, S.p.A. in Italy. This venture was followed, in 1959, by the opening of subsidiaries in Mexico and Australia.

Several Acquisitions Marked the 1960s

Throughout the 1960s Campbell was conservatively managed and quite successful. In that decade the company opened two mushroom growing facilities and 11 new plants on three continents. In the 1960s Campbell’s growth—which underwent a slight shift in emphasis—began to include regular acquisitions in addition to internal expansion. In 1961 Campbell acquired Pepperidge Farm, a maker of quality baked goods, and a similar Belgian company, Biscuits Delacre. In 1965 Campbell created a foodservice division and, in 1966, began marketing EfficienC, its own brand of foodservice products through that division. Also in 1966 Campbell formed Godiva Chocolatier to distribute the Belgian-made chocolates in the United States. In 1974 the company completed a purchase of the European Godiva company and became its sole owner. Campbell created Champion Valley Farms, a pet food concern, in 1969.

During the 1970s the company’s slow but steady growth continued. Campbell, which had built its fortune on Dorrance’s invention of condensed soup, introduced the first Chunky brand of ready-to-serve soups. This became a highly successful enterprise. In 1971, for the first time, Campbell’s sales topped $1 billion. In 1972 Murphy retired and was replaced as president by Harold A. Shaub. Also that year, Swanson introduced Hungry Man meals, a line of frozen dinners with larger-than-average portions.

Diversified in the 1970s and 1980s

In 1973 Campbell acquired Pietro’s Pizza Parlors, a chain based in the Pacific Northwest. This led, in 1974, to the formation of a restaurant division, and heralded Campbell’s intention to add more restaurants to its growing list of subsidiaries.

In 1978 Campbell purchased Vlasic Foods, a Michigan-based producer of pickles and similar condiments, for approximately $35 million in capital stock. This acquisition gave Campbell the lead over archrival H.J. Heinz in the pickle-packing business. Campbell added seven small European food producing companies and three domestic operations in 1979. That same year sales topped $2 billion for the first time. In 1978 Campbell made a brief and unsuccessful foray into the Brazilian soup market.

The diversification movement started by Shaub in the early 1970s prepared the company for long-term growth. Campbell’s debt remained low and the company’s new products and acquisitions provided it with popular brand names in a variety of food industry sectors. Campbell realized that the key to growth in this mature market was diversification. Shaub changed a longstanding policy on new product development requiring a profit within the first year. His most notable innovation, however, was his decentralization of marketing for major product lines.

Company Perspectives:

At today’s Campbell Soup Company, we are focused on providing high quality, great tasting food for anybody, anywhere, anytime and for any need. Around the world, we are investing in the power of our brands by delivering innovative products and powerful marketing to connect with consumers like never before.

To sustain these growth-oriented policies, Campbell broke its tradition of relying on internally generated funds to finance its efforts. In June 1980 the company entered the debt market with a $100 million ten-year offering. As a cautious food producer, Campbell’s earnings have always been healthy, but Shaub hoped to increase both sales and profits margins. A key reason for Shaub’s determination to allow Campbell to diversify was the recognition that the market for many of these products had matured and growth had slowed.

In 1980 R. Gorden McGovern succeeded Shaub as president and Campbell made two acquisitions—Swift-Armour S.A. Argentina and a small American poultry processing plant used by Swanson for its frozen chicken dinners. Campbell’s efforts in Argentina were not entirely fruitful, with much of the difficulty related to currency-transaction adjustments. Also in 1980 Campbell acquired additional bakery, pasta, and pickle operations.

In 1981 McGovern reorganized Campbell’s management structure, dividing the company into two new divisions—Campbell U.S.A. and Campbell International—and about 50 business groups. This new structure was meant to foster entrepreneurship and heighten management’s sensitivity to consumer opinion, long a weakness at Campbell. The company acquired Snow King Frozen Foods, a large producer of uncooked frozen specialty meats, and introduced the wildly successful Prego spaghetti sauce nationally in 1981. In 1982 Campbell acquired Mrs. Paul’s Kitchens, a processor of frozen prepared seafood and vegetables. Several of the company’s subsidiaries also made major purchases. Vlasic Foods acquired Win Schuler Foods, a specialty foods producer, and Pepperidge Farm completed the purchase of an apple juice processor, Costa Apple Products, with markets primarily on the East Coast. Also in 1982, Juice Bowl Products, a fruit juice processor, was acquired.

A variety of other acquisitions in the early 1980s added Annabelle’s, a restaurant chain; Triangle Manufacturing, a manufacturer of physical fitness and sports-medicine products; a fresh produce distributor; a Puerto Rican canning company; and an Italian manufacturer of premium biscuits.

Marketing Emphasis Began in the 1980s

McGovern further increased emphasis on marketing and new product development in an effort to shift the company away from its production-oriented focus. McGovern also introduced Total Systems, a worker-oriented system designed to increase quality and efficiency that was similar to the successful worker management strategies employed by many Japanese companies.

One of McGovern’s primary concerns was turning Campbell into a “market-sensitive food company.” After McGovern publicly referred to some of the company’s Swanson TV dinner line as “junk food” in 1982, Campbell initiated Project Fix in an effort to upgrade food quality and improve packaging of its older products. As McGovern told Business Week in 1983, one of the most important facets of his makeover was making the company “somebody who is looking after [consumers’] well-being.” The 1983 Triangle Manufacturing purchase and 1982 formation of a health and fitness unit were both designed to meet that goal. Campbell’s involvement in frozen fish, juices, and produce were also part of the new market sensitivity urged by McGovern.

In addition, Campbell attempted to market products regionally and according to age group. The central marketing system was broken into 20 regions to allow tailoring of advertising and marketing to fit each region’s peculiar demographics. For instance, the company sold spicier nacho cheese soup in Texas than in the rest of the country. The company also aimed its national brands at regional audiences, with spots featuring local celebrities and locally arranged promotions. Campbell, which reached half the nation’s homes just by sponsoring the television show “Lassie” in the 1950s, spent 15 percent of its advertising budget in regional efforts in 1983. That figure was expected eventually to reach 50 percent.

McGovern increased Campbell’s sales and earnings significantly in his first few years. His encouragement of new product development and line extensions may have been overzealous. The company introduced frozen entrees to compete with Stouf-fer’s, dried soups to challenge Lipton, and name-brand produce such as Farm Fresh mushrooms and tomatoes, complemented by exotic varieties of mushrooms, refrigerated salads and pasta sauces, and juices. In all, Campbell introduced 334 new products in the first half of the 1980s. This included several costly mistakes, such as the 1984 failure of Pepperidge Farm’s Star Wars cookies, which did not fit the brand’s high-quality image. Yet spurred on by successes such as Le Menu frozen dinners, McGovern concentrated on marketing and new product development. In 1985, however, the company decided to cut back on new product gambles and McGovern reevaluated his goals and returned the company’s focus to product quality and efficiency.

Throughout this period, during which it became increasingly clear that McGovern’s plan was destined to fail, acquisitions and group formations continued, but at a pace reminiscent of the old Campbell. The company purchased a Belgian food producer and 20 percent of Arnotts Ltd., an Australian biscuit manufacturer, in 1985. In 1986 the company bought two more American food companies and established Campbell Enterprises to oversee non-grocery products. Meanwhile new products were gradually but steadily introduced.

In 1984 John T. Dorrance, Jr., the son of condensed soup’s inventor, retired as chairman of the board and became director of the board’s executive committee. He was succeeded as chairman by William S. Cashel, Jr. Dorrance and other members of his family, however, still controlled 58 percent of Campbell’s stock and showed no interest in selling, keeping the company safe from takeover.

By 1987 McGovern began selling off some of Campbell’s less successful ventures. In 1987 the company sold its disappointing pet food, Triangle physical fitness, and Juice Works beverage businesses. In 1988 the Pietro’s pizza and Annabelle’s restaurants were also sold, taking Campbell out of the restaurant business entirely.

However, Campbell also bought several smaller companies in 1987 and 1988 that were more compatible with its traditional lines of business. These included a French cookie maker, the Open Pit barbecue sauce line, an American olive producer, and Campbell’s largest acquisition to date, Freshbake Foods Group PLC, a British producer of frozen foods. Also in 1988, Robert J. Vlasic, whose Vlasic Foods Campbell had purchased in 1978, became chairman of Campbell.

Campbell’s management crisis was exacerbated by the death, in April 1989, of John Dorrance. Dorrance’s 31 percent of the company’s stock was split between his three children, who demonstrated an interest in preserving family control of the company. The remaining 27 percent of the family-owned stock was split among other members of the clan, some of whom (representing about 17.4 percent of the company’s stock) expressed a desire to sell Campbell. Chairman Vlasic, however, had loaded the board with family members loyal to the company (six of the 15 board members were family members, including John Dorrance’s three children), so a proxy battle never materialized.

McGovern—who failed in an attempt to merge the company with Quaker Oats in 1989—left Campbell that same year. His final attempt to recoup Campbell’s losses, a $343 million restructuring program, earned him little praise. Although sales had doubled during his term, profits had dropped 90 percent as a result of his aggressive capital commitments. From 1988 to 1990 alone, earnings fell from $274.1 million to $4.4 million.

Back to Basics in the 1990s

In January 1990 David W. Johnson was elected president and CEO. Johnson came to Campbell from Gerber Products Company, where he had been successful in streamlining that company’s operations. Johnson employed a back-to-basics strategy that called for drastic restructuring. The new CEO oversaw the divestment of whole businesses, including mushroom farms, a salmon processing plant, the refrigerated salads line, and cookie maker Lazzaroni. By June 1991, Johnson had closed or sold 20 plants worldwide, reduced the company’s 51,700 person workforce by 15.5 percent, and pulled unprofitable lines from store shelves. While Johnson purported to support marketing, he also cut Campbell’s advertising budget.

Johnson was most interested in promoting the company’s core product, soup. Even into the early 1990s, Campbell soups had 66 percent, or $1.6 billion, of the $2.6 billion U.S. soup market, which contributed almost half of the conglomerate’s $570 million operating profits.

In anticipation of the North American Free Trade Agreement, Johnson also supervised the merging of Campbell’s Canadian operations, some Mexican companies, and the U.S. businesses into one division called Campbell North America. Late in 1991, Campbell also focused on the impending European Community’s single market, which promised 344 million consumers (50 percent more than the United States) and had potential for future growth. The cookie subsidiary of Campbell Soup, Campbell Biscuits Europe, got a head start on the market in February 1990, when it reorganized its European corporate structure, consolidated marketing, and standardized packaging.

By the end of 1991, some indicators showed that Johnson’s efforts had paid off: Campbell’s earnings through the first three quarters of 1991 had risen 33 percent, making the company’s profits the second fastest-growing in the food industry. But some analysts warned that the profits came at the expense of core brand promotion, which was cut in 1991. The growth in earnings were not based on sales increases, which only rose 1.9 percent during the same period.

Johnson was given an overall good rating in the quick turnaround at Campbell. In 1992 the company made bolder goals, with a vision expressed as “Campbell Brands Preferred Around the World.” The plan made further preparations for the European Community’s single market and expanded those efforts around the world. The company was reorganized into three multinational divisions: Campbell North and South America grouped Campbell’s Swift-Armour subsidiary in Argentina with the previously organized North American group; Campbell Biscuit and Bakery united Pepperidge Farm in North America with Delacre in Europe and Australia’s leading biscuit company, Arnotts Ltd. (of which Campbell by then owned 58 percent); Campbell Europe/Asia was a growth-oriented division that comprised the company’s “greatest opportunity and challenge,” according to the 1992 annual report.

In 1993 Vlasic retired as chairman, with Johnson taking on this additional title. Also, Bennett Dorrance, a grandson of condensed soup inventor John Dorrance, was named vice-chairman of Campbell Soup. Bennett Dorrance represented the Dorrance family’s interests on the board of directors and took an active role, particularly in tying executive pay to performance and putting oversight practices into place. The family’s power was soon diminished somewhat, after Bennett’s brother, John T. Dorrance III, sold most of his stake in the company by late 1996, leaving the family in control of 44 percent of the stock. No attempts at a takeover—hostile or otherwise—were immediately evident, however.

Johnson continued to restructure Campbell as the decade continued. The company recorded a $300 million restructuring charge in 1993 in relation to the divestment of several underper-forming units. That year also saw the launch of a new soup campaign using the slogan “Never Underestimate the Power of Soup.” The Mrs. Paul’s frozen seafood line was sold to Pills-bury Co.’s Van de Kamp’s unit in 1996. Altogether, Johnson dumped $500 million worth of noncore, underperforming assets from 1990 through 1996.

Simultaneously Johnson led Campbell Soup in a more aggressive overseas push and sought out compatible acquisitions. In addition to a big push into the Mexican soup market, the company in 1993 began selling V8 vegetable juice in Europe and established a joint venture with Nakano Vinegar Co. Ltd. to market Campbell’s soups in Japan. In January 1995 Campbell completed the largest acquisition in its long history, paying $1.1 billion for Pace Foods Ltd., the leading maker of Mexican sauces (picante and salsa) with 1994 sales of more than $200 million. Later in 1995, the company picked up Greenfield Healthy Foods, the number one maker of fat-free brownies and cookies for the health and convenience store markets, and Fresh Start Bakeries, a supplier of baked goods to fast-food restaurants. The latter, however, was sold in 1998.

Campbell Soup continued its overseas push with the 1996 purchases of Homepride, the leading cooking sauce brand in the United Kingdom, and the Cheong Chan soup and sauce business in Asia; and the 1997 acquisition of Erasco Group, the leading seller of canned soup in Germany, from Grand Metropolitan PLC for $210 million. Also in 1997 Arnotts acquired the Sydney, Australia-based Kettle Chip Company. Campbell then the following year spent about $290 million to purchase the remainder of Arnotts, making it a wholly owned subsidiary. Campbell also extended its soup business in Europe through the $180 million acquisition of the Liebig soup business of France. Even with all of these foreign maneuvers, Campbell was far from a goal Johnson had set in 1993 of increasing overseas operations to 50 percent of sales by 2000. The figure had stood at 28 percent in 1993 and had risen to 31 percent in 1994, but by 1998 was back at 28 percent.

Despite the lack of progress toward this goal, Johnson had succeeded in improving Campbell Soup’s profitability thanks to his aggressive restructuring efforts. The company’s net profit margin stood at 10.4 percent for 1996, compared to five percent for 1988 and 6.5 percent for 1991. But Johnson was not finished with his tinkering. Campbell recorded restructuring charges of $204 million in 1997 and $262 million in 1998 related to plant closures and the divestment of nonstrategic businesses. Jettisoned in 1997 were the Marie’s salad dressing and dip unit, the company’s Argentinean beef operations, and its German chilled foods business, Beeck-Feinkost GmbH.

After the installation of Dale F. Morrison as president and CEO (with Johnson remaining chairman), Campbell Soup made its most dramatic divestment yet. In March 1998 the company completed the spinoff of its Specialty Foods segment, which included seven noncore businesses. The $1.5 billion spinoff created a new public company, Vlasic Foods International Inc., which included Vlasic pickles, Swanson frozen foods, Swift Armour meats in Argentina, Open Pit barbecue sauce, U.K. canned foodmaker Stratford Upon Avon, Gourmet Specialty Foods of Germany, and a fresh mushroom business in the United States. This move left Campbell Soup with three main core business segments: soups and sauces, biscuits and confectionery, and foodservice. The 1998 dealmaking was not quite over, however, as Campbell sold Delacre, its European biscuit business, to United Biscuit (Holdings) PLC for $125 million in cash in June—leaving Pepperidge Farm and Arnotts as its mainstays in biscuits and crackers. In June the company sold its can-making assets to Stamford, Connecticut-based Silgan Holdings Inc. for $123 million. In August Campbell completed the purchase of Fortun Foods, maker of Stockpot soup, the market leader in premium refrigerated soups, a rapidly growing segment of the foodservice sector.

According to Business Week, Morrison warned employees in the fall of 1997, “We are driving the incredibly shrinking company.” Reduced to a much more manageable core of leading brands, Campbell faced a number of challenges. In addition to the slower than expected growth in international sales, Campbell’s canned soup sales in the United States were on the decline, leading to the implementation in 1998 of the largest advertising campaign in company history, which centered around a new slogan, “Good For The Body, Good For The Soul.”

Principal Subsidiaries

Campbell Finance Corp.; Campbell Foodservice Company; Campbell Investment Company; Campbell Sales Company; CSC Brands, Inc.; Godiva Chocolatier, Inc.; Joseph Campbell Company; Pepperidge Farm, Incorporated; PF Brands, Inc.; Stockpot Inc.; Arnotts Limited (Australia); Campbell’s Australasia Pty. Limited (Australia); Campbell Foods Belgium N.V.; Campbell Soup Company Ltd—Les Soupes Campbell Ltee (Canada); Campbell France S.A.S.; Erasco GmbH (Germany); Campbell’s de Mexico, S.A. de C.V.; Campbell’s U.K. Limited

Further Reading

Barrett, Amy, “Campbell Soup: Hail to the Chef,” Financial World, June 11, 1991, pp. 52-54.

_______, “Souping Up Campbell’s,” Business Week, November 3, 1997, pp. 70, 72.

Berman, Phyllis, and Alexandra Alger, “Reclaiming the Patrimony,” Forbes, March 14, 1994, p. 50.

“Campbell: Now It’s M-M-Global,” Business Week, March 15, 1993, pp. 52-54.

Collins, Douglas, America’s Favorite Food: The Story of Campbell Soup Company, New York: Abrams, 1994.

Donlon, J.P., “Top Spoon Stirs It Up,” Chief Executive, November 1996, pp. 44-47.

Dwyer, Steve, “Red Alert: The Soup’s Back On,” Prepared Foods, September 1997, pp. 14-16, 18, 21, 23.

“From Soup to Nuts and Back to Soup,” Business Week, November 5, 1990, pp. 114, 116.

Glosserman, Brad, “Campbell Soup Works for Spill Over Effect,” Japan Times Weekly International Edition, May 11-May 17, 1992, p. 17.

Grant, Linda, “Stirring It Up at Campbell,” Fortune, May 13,1996, pp. 80.

Hays, Constance L., “Will Goldfish Tactics Help Campbell’s Soups?,” New York Times, October 18, 1998, sec. 3, p. 4.

A History, Camden, N.J.: Campbell Soup Company 1988.

Mastrull, Diane, “Campbell and Pace Recipe: A Mixing of Disparate Cultures,” Philadelphia Business Journal, February 17, 1995, pp. I, 27, 28.

Nulty, Peter, “The National Business Hall of Fame,” Fortune, March II, 1991, pp. 98-103.

O’Connell, Vanessa, “Campbell Decides Its IQ Health Meals May Be Ahead of the Curve for Foods,” Wall Street Journal, April 27, 1998, p. B8.

_______, “Changing Tastes Dent Campbell’s Canned-Soup Sales,” Wall Street Journal, April 28, 1998, pp. Bl, B25.

_______, “How Campbell Saw a Breakthrough Menu Turn into Left-overs,” Wall Street Journal, October 6, 1998, pp. Al, A12.

Pehanich, Mike, “Brand Power,” Prepared Foods, Mid-April 1993, pp. 38-40, 42.

Saporito, Bill, “Campbell Soup Gets Piping Hot,” Fortune, September 9, 1991, pp. 142-48.

“Seizing the Dark Day,” Business Week, January 13, 1992, pp. 26-28.

Sim, Mary B., History of Commercial Canning in New Jersey, Trenton, N.J.: New Jersey Agricultural Society, 1951.

Weber, Joseph, “Campbell Is Bubbling, but for How Long?,” Business Week, June 17, 1991, pp. 56-57.

_______, “What’s Not Cookin’ at Campbell’s,” Business Week, September 23, 1996, p. 40.

Wentz, Laurel, “Europe: How Smart Marketers Cash In,” Advertising Age, December 2, 1991, pp. S-l, S-9.

Wimp, Marilyn, “Campbell Spins Off Frozen Food, Pickles,” Philadelphia Business Journal, March 27, 1998, p. 20.

—April Dougal Gasbarre
—updated by David E. Salamie

Campbell Soup Company

1 Campbell Place
Camden, New Jersey 08103-1799
USA
Telephone: (856) 342-4800
Fax: (856) 342-3878
Web site: www.campbellsoup.com www.pepperidgefarm.com

GOLDFISH CRACKERS CAMPAIGN

OVERVIEW

Pepperidge Farm, Inc.'s Goldfish crackers, introduced in 1962, had by 2004 evolved into a megabrand available in more than 24 individual flavors and varieties, from the original cheddar to peanut-butter-filled sandwich crackers and crispy rounds. At the end of that year Goldfish sales in the United States were $168.5 million, making it the number two snack-cracker brand behind Nabisco's Ritz crackers. But despite its ranking the Goldfish brand was slipping; in 2004 sales of the crackers dipped 8.3 percent from the previous year.

To lift its iconic brand out of the doldrums, Pepperidge Farm, a division of the Campbell Soup Company, looked beyond its agency of record—Young & Rubicam Advertising in New York—for creative help. The company charged BrightHouseLive, a small Atlanta-based agency known for its unique approach to marketing and advertising, with developing a clever new marketing campaign for the Goldfish brand. BrightHouseLive created a television-focused campaign that featured an animated goldfish character named Finn. The campaign, which began in January 2005, also included in-store and online marketing and new packaging for the Goldfish crackers. A budget for the campaign was not announced, but according to TNS Media Intelligence/CMR, a unit of the United Kingdom-based market research firm Taylor Nelson Sofres, in 2003 Pepperidge Farm spent $16.3 million on advertising for its Goldfish brand, a figure that was almost unchanged from its spending in 2002.

The new campaign, as well as its spokescharacter, Finn, seemed to resonate with consumers and helped increase sales of Goldfish crackers by about 5 percent within several months of its launch. Media insiders also praised the campaign, using a variety of adjectives to describe Finn, from lovable and funny to spunky and irreverent. Additionally the Campbell Soup Company credited the campaign and its spokescharacter with boosting Pepperidge Farm's sales in 2005.

HISTORICAL CONTEXT

According to its website, Pepperidge Farm's humble beginnings in 1937 were in the kitchen of Margaret Rudkin, the mother of three children. To ease the allergies of one of her children, the industrious mom began baking bread for her family that contained none of the preservatives or artificial ingredients found in commercially baked bread. Her efforts in the kitchen soon evolved into a small business named for the family farm in Connecticut: Pepperidge Farm. The first product, whole-wheat bread, gained in popularity with consumers and in the 1940s, as the business grew, the line was expanded to include oatmeal bread, dinner rolls, and stuffing mix. The peripatetic Rudkin also added to the product line by collecting recipes during her international travels, including European-style cookies that she discovered while traveling in Belgium in the 1950s. In 1961 the Campbell Soup Company acquired Pepperidge Farm. The following year Goldfish crackers were introduced after Rudkin discovered the snack cracker during a trip to Switzerland and returned with the recipe and permission to market it.

Ogilvy & Mather had served as the Pepperidge Farm ad agency for 40 years. In 1995 it resigned from the Pepperidge Farm and Goldfish crackers account, reportedly because of a business conflict, and agency Saatchi & Saatchi/New York took over the account. When a smiling face was added to the original goldfish in 1997, "Smiley" the Goldfish icon was born. Saatchi & Saatchi created the accompanying tagline, "The snack that smiles back." In 1998, following a consolidation by the brand's parent company, Campbell Soup, Young & Rubicam Advertising in New York won the Goldfish account. The agency introduced a new campaign for Goldfish crackers in 2003 that included the theme song "Jingle for Goldfish." The campaign, which targeted kids 8 to 12 years old, featured two scruffy, longhaired musicians playing acoustic guitars and singing the jingle. Television spots placed the singing duo in a variety of settings, including on a school bus and in a classroom. At the request of Pepperidge Farm, Atlanta-based BrightHouseLive joined the team in 2004. BrightHouseLive created an updated campaign for Goldfish crackers that featured a new animated spokes-character, Finn the goldfish. The campaign was released in January 2005.

TARGET MARKET

Any parent, babysitter, or other person who had ever quieted a fussy toddler with a cup of Goldfish crackers could appreciate the value of the tasty fish-shaped treat. But with the new campaign featuring Finn, a personable animated goldfish, the goal was to help create an even closer bond between the popular Pepperidge Farm brand and the children who enjoyed Goldfish crackers. As an added benefit, the clever spots connected with the adults who purchased the product. The animated Finn also was designed to continue Goldfish crackers' appeal to tweens—kids 8 to 12 years old—and teens who had been given the fish-shaped crackers as toddlers but had perhaps stopped eating them in favor of other snacks. To further reach its target market, Pepperidge Farm introduced a Goldfish website, www.pfgoldfish.com, that enabled older kids to go online and play games featuring Finn. The site also offered a variety of activities that parents or caregivers could play with kids aged three to five years old, such as determining how many goldfish crackers tall the child was. In addition, new packaging (the milk-carton box was replaced with a bag similar to what was used for other products in the line) added to the appeal of the brand for consumers of all ages.

COMPETITION

In the snack-cracker wars, flavor, as always, was paramount, but in the early 2000s part of the battle was about the shape of the cracker. Pepperidge Farm's fish-shaped crackers were near the top of the list, with 98 percent of Americans surveyed saying that they recognized and were familiar with Goldfish crackers. Nabisco, which claimed one of the top spots in the snack-cracker market with its Ritz brand, went one step too far in its competition with Pepperidge Farm when it introduced its own fish-shaped crackers in 1998. Nabisco's new crackers were planned as a tie-in to the Nickelodeon television network's program CatDog. The new crackers resulted in a lawsuit, pitting Nabisco against Pepperidge Farm. The latter alleged that Nabisco's new crackers infringed on its Goldfish brand trademark. In 2000 a federal court upheld Pepperidge Farm's claim and ordered Nabisco to discontinue production of its fish-shaped cracker. Later in 2000 Kraft Foods acquired the Nabisco brand for $18.9 billion. While Nabisco's Ritz cracker brand claimed the number one spot in the snack-cracker market at the end of 2004, with $232.6 million in annual U.S. sales, the company was still looking for a niche in the shaped-cracker market. Nabisco introduced dinosaur-shaped puffed crackers under its Ritz brand in 2005. The new Ritz Dinosaur crackers were created in direct response to Pepperidge Farm's Goldfish crackers and targeted the same young consumers and their parents.

In 2005 the Kellogg Company introduced its own character-shaped cracker under its Keebler Sunshine cracker brand, Cheez-It. Rather than a fish or prehistoric creature, however, Keebler Sunshine's new crackers were shaped like the cartoon character SpongeBob SquarePants and directly targeted the kids who munched on Ritz Dinosaur and Pepperidge Farm Goldfish crackers. Targeting an older audience, in 2004 Kellogg introduced Twisterz, another variation on its Cheez-It crackers. The new shape, a twisted cylinder rather than the traditional square, was launched in time for the end of college basketball season and included combination flavors designed to please college-age consumers: Cheddar & More Cheddar, Hot Wings & Cheesy Blue, and Cool Ranch & Cheddar. The new product launch was supported by a marketing campaign created by Leo Burnett/Chicago and continued the brand's tagline, "Get your own box." With $140.1 million in sales, the Cheez-It cracker brand ranked fourth in the snack-cracker market at the end of 2004.

MARKETING STRATEGY

Although New York-based Young & Rubicam Advertising remained the agency of record for Goldfish crackers and other Pepperidge Farm brands, in 2004, when Pepperidge Farm wanted to put a different spin on the advertising for the fish-shaped cracker and update the brand, it partnered with BrightHouseLive, an agency based in Atlanta, Georgia. BrightHouseLive had opened its doors in 2003 but had quickly earned a reputation for devising unusual advertising campaigns. The creative idea developed by the agency was a primarily television campaign that featured an animated goldfish named Finn. A specific budget for the campaign was unavailable, but according to a report in Adweek, in 2004 Pepperidge Farm spent approximately $14 million from January through September on advertising for the Goldfish cracker brand.

Prior to the creation of the campaign Pepperidge Farm devoted more than one year to conducting market research about Goldfish crackers. Included were interviews with mothers and children to determine what the brand meant to consumers. The company also worked with Character, a leading character-development agency within the film industry, to help establish the personality of the new spokescharacter, Finn.

GOLDFISH CRACKERS REPLACED WITH COOKIES ON BOOK COVER

Pepperidge Farm's Goldfish crackers could be found almost everywhere, from the lunch boxes of elementary school kids to strategic placement in the movie Christmas with the Kranks. But when the fish-shaped cracker appeared on the cover of a new novel, the waters got choppy. The book, Little Children by Tom Perrotta, was about what happened in a suburban neighborhood when a convicted child molester moved in. To the dismay of Pepperidge Farm, featured on the cover of the novel were Goldfish crackers. The book's publisher, St. Martin's Press, had failed to get permission to use the crackers on the cover, so the book cover got a makeover: the Goldfish crackers swimming across the front of the book were replaced with chocolate-chip cookies.

For the campaign BrightHouseLive created a series of four 30-second and three 15-second television spots. The initial two 30-second spots, which were first aired in January 2005, highlighted Goldfish crackers' cheddar-flavored variety. Subsequent spots featured the brand's Flavor Blasted and Sandwich Snackers varieties. Each spot showed Finn interacting with other Goldfish crackers as he made plans to help protect them from being eaten by hungry humans reaching for a snack. Finn warned, "To avoid being eaten, you've got to avoid the bowl, avoid the baggies. Cool?" One spot had Finn's advice being ignored by the other Goldfish crackers. As the crackers laughed and jumped into a bowl on a kitchen counter, a person reached into the bowl and took a handful of the crackers. A voice-over stated: "Tasty Goldfish crackers, baked with real cheddar cheese. It's a wonder they're not extinct." Finn sighed and returned to the package to try again to warn the remaining Goldfish crackers about how to avoid becoming a snack for humans. The spot ended with Finn exclaiming, "So much for fish being brain food."

In addition to television spots, the campaign included in-store advertising and Internet promotions on a new website for the product that featured games and activities for kids to play alone or with their parents. As part of a brand update, the company designed new packaging for the crackers. In an interview reported in Business Wire prior to the release of the campaign, Pepperidge Farm's vice president of youth snacks, Steve White, said that, by bringing to life the familiar goldfish as the spokescharacter Finn, "we feel confident that kids of all ages are going to love the character as much as they love the snack."

OUTCOME

At the time of the new campaign's 2005 launch, Pepperidge Farm's Goldfish crackers were among the world's most popular snack crackers, with American consumers devouring more than 85 billion Goldfish crackers annually. Within six months of the start of the campaign Pepperidge Farm reported that sales of Goldfish crackers were up more than 5 percent. Parent company Campbell Soup also noted the success of the campaign in its third-quarter report for the period that ended May 2005. The report stated, "Sales of 'Pepperidge Farm Goldfish' snack crackers experienced good gains due to continued momentum of the base brand and the favorable impact of new advertising featuring the new animated character, 'Finn.' " Besides resonating with consumers and spurring sales, the campaign was well received by media insiders. Writing in the Chicago Sun-Times, Lewis Lazare described Finn as a lovable advertising icon that was "funny and irreverent" with "spunk and soul."

FURTHER READING

"Alien Invaders Attack with a Vengeance." Snack Food & Wholesale Bakery, June 1, 2005.

Baar, Aaron. "Jingle Backs Intro of Cheez-It Twisterz." Adweek, April 5, 2004.

Elliott, Stuart. "Campbell Soup Is Looking Beyond Its Big Agency for Ideas to Pump Up the Sales of Goldfish." New York Times, November 24, 2004, p. 5.

Janoff, Barry. "Pepperidge Farm Floats Fish Story." Adweek, January 18, 2005.

Jones, Malcolm. "Fiction: New Snack Attack." Newsweek, May 24, 2004.

Lazare, Lewis. "Hair-Brained Cartoon Ad a Disconnect." Chicago Sun-Times, January 11, 2005.

Lee, Richard. "Norwalk, Conn.-Based Pepperidge Farm Places Goldfish in 'Kranks' Movie." Stamford (CT) Advocate, December 18, 2004.

Lovel, Jim. "BHL Brings Goldfish Snack to Animated Life." Adweek, January 7, 2005.

Malovany, Dan. "Snack Attack: Many Cracker Manufacturers Are Adding New Products, Promotions and Marketing Programs that Not-Too-Subtly Resembles the Successful Strategies Used by Traditional Salted Snack Producers." Snack Food & Wholesale Bakery, December 1, 2004.

McMains, Andrew. "Pepperidge Farm Adds BrightHouse on Goldfish." Adweek, November 24, 2004.

"Pepperidge Farm Goldfish Character Brought to Life in New Advertising Campaign." Business Wire, January 10, 2005.

"Pepperidge Farm Hooks Animated Star." Brandweek, January 10, 2005.

Simon, Ellen. "Nabisco, Pepperidge Farm Battle over Cheese-Cracker Rights." Knight Ridder/Tribune Business News, January 19, 2000.

                                               Rayna Bailey

MAKE IT CAMPBELL'S INSTEAD CAMPAIGN

OVERVIEW

Campbell Soup Company, long the dominant force in the American canned-soup market as well as a player in many other food and beverage categories, saw consistent sales losses in its all-important original Campbell's soup line throughout the 1990s and into the new millennium. These condensed soups still constituted the best-selling soup brand in the country and had one of the most recognizable labels in the world, the iconic red-and-white can, but condensed soup was being progressively upstaged by ready-to-eat brands (including Campbell's own Chunky soup) prized for their convenience. Having unsuccessfully tried numerous tactics in the attempt to revive its core business, Campbell's in 2003 hit on a combination of manufacturing, packaging, shelving, and communications tactics that positioned it to make an integrated bid, on behalf of all of its soup products, for consumers' attention. A major part of this effort was a decisive change in marketing tone, targeting, and strategy, embodied in the "Make It Campbell's Instead" campaign of 2003–4.

"Make It Campbell's Instead," crafted by Campbell's longtime ad agency BBDO New York, used an estimated $100 million budget and employed the conventions of reality television, which was extremely popular at the time, in a series of commercials designed to encourage the consideration of Campbell's full range of soups as replacements for a variety of meal types and snack foods. The spots were hosted by the pushy yet charming Gordon Elliott, the star of his own Food Network reality show, in which he stopped passersby and knocked on strangers' doors, asking them to try dishes that he himself cooked. The Campbell's commercials used this same premise—with Elliott intruding on ordinary families at mealtime, drivers of cars stopped at intersections, and the homes of celebrities—in order to suggest the consumption of a particular Campbell's soup variety.

"Make It Campbell's Instead" made a crucial contribution to the ongoing attempt to revitalize the Campbell Soup Company, an attempt that saw its first signs of success during the campaign's run. In 2004 the company's famed condensed-soup line saw its first sales gains since the 1980s, surprising analysts who had predicted the brand's continued decline.

HISTORICAL CONTEXT

Campbell's soup, long one of America's most recognizable packaged foods, fell precipitously out of favor with consumers in the 1990s and early 2000s. The demand for ever-more-convenient food products translated into the ascendance of ready-to-eat soups such as the Campbell Soup Company's own Chunky and Select brands and General Mills' Progresso. Such products took market share away from the Campbell's condensed varieties, which were sold in the famous red-and-white can—an ironic development considering the fact that a primary attribute of Campbell's condensed soups had always been the ease with which they could be prepared. Though Chunky and Select posted consistent sales gains, the core brand, condensed soup, accounted for approximately 70 percent of the company's soup operations and 35 percent of its profits, so Campbell remained committed to reviving it. In the 1990s and early 2000s the marketing strategy for Campbell's soup—with creative work chiefly crafted by ad agency BBDO New York—underwent drastic revision almost yearly, as did the roster of Campbell executives charged with reviving the brand. Industry observers characterized these changes as desperate attempts to update the product's image, and corporate analysts predicted that the declines in condensed-soup sales would continue indefinitely.

In 2002 Campbell launched a new product line, Soup at Hand, America's first "sippable" soup, which was packaged in a microwaveable container designed to fit in a person's hand for on-the-go consumption. This increase in portability, positioning soup to compete against snack and fast foods generally perceived as less wholesome and nutritious, translated into the company's most successful product launch since the introduction of the Chunky variety almost 30 years earlier. Meanwhile, the company's new president of U.S. soup, Jeremy Fingerman, encouraged innovation in Campbell's soup advertising. Long pitched to stay-at-home moms via wholesome TV imagery, the brand in late 2002 targeted college students with wry outdoor ads in select cities—Boston, Philadelphia, and Cincinnati—as a means of testing the core brand's ability to grow market share outside its traditional audience. In 2003 Campbell's attempt to assure consumers that soup was, as Fingerman put it in an interview with Advertising Age, "the superior simpler meal," gained further momentum. It included such measures as the reformulation of the condensed soups' recipes, the addition of pop-top lids to the condensed-soup cans, the introduction of new Soup at Hand flavors, the offering of Chunky and Select in microwaveable containers, and a renewed focus on supermarket shelving strategies.

TARGET MARKET

"Make It Campbell's Instead" was rooted in the company's attempt to convince consumers that soup was a better option for those seeking a simple and healthy meal. BBDO and Campbell used reality-based TV spots, some of which were scripted and some of which were not, to update the soup brands' images and make them seem relevant to "today's diverse consumer population," as president of Campbell North America, Larry McWilliams, said in a press release. The reality-based approach was, industry observers noted, a significant departure from Campbell's heritage as a traditional advertiser targeting stay-at-home moms with images of wholesome domesticity.

The commercials featured a single spokesperson, the Australian-born Gordon Elliott, star of the Food Network show Door Knock Dinners. Modeled on that program, in which the pushy but charismatic Elliott confronted people at home or on the street and asked them to eat a meal that he had prepared, the Campbell's spots showed Elliott urging strangers and celebrities to try Campbell's soup products in place of other snack or meal options. Individual commercials targeted different audiences, depending on the object of Elliott's attentions. While the spot that showed Elliott intruding on the home of TV personality and restaurateur B. Smith appealed to adult women, spots in which Elliott focused his antics on younger people were meant to appeal to kids. For instance, Elliott played basketball with the 16-year-old rapper Bow Wow in one commercial for Campbell's Chicken Noodle Soup. Other spots supported newly developed Soup at Hand varieties expressly developed for children, such as Pizza, Taco, and Mexican noodle flavors. The campaign marked Campbell's first sustained targeting of children.

COMPETITION

In addition to being an internally significant change in strategy, the fact that Campbell aimed its soup advertising at children was a noteworthy development in the intensifying competition with rival soup brand Progresso. Progresso's most successful recent advertising campaign, and its first to include national TV commercials, attempted to make the case that Campbell's was kids' fare but that Progresso—which was not condensed and claimed, for instance, such attributes as white meat and chunky vegetables in its chicken noodle variety—was worthy of adult palates. Launched in 1998, the Progresso campaign was called "Discover the Better Taste of Progresso," and it targeted women aged 25 to 54. One TV spot showed a male office worker eating Chicken & Stars soup from a bowl, which was positioned alongside a juvenile lunchbox and a can clearly meant to suggest Campbell's. A female coworker approached the man and said, "You know, Chicken & Stars used to be my favorite. Then I learned to ride a two-wheeler. Come on, you're an adult now. There's a better tasting soup." Print ads took the comparative concept even further, identifying Campbell's by name. Progresso sales climbed by 12 percent during the 1998–9 soup season—fall through spring—and research indicated that a large proportion of these sales increases could be attributed to the campaign. Progresso's gains were likewise in line with the industry-wide trend away from condensed soups. By 2003 Progresso's annual sales had climbed to $424 million, a marked improvement over its 1998 total of $258 million.

Progresso's most direct competitor was not Campbell's condensed lines, however, but Campbell's Chunky brand, which likewise employed messages of food quality and flourished at least partly at the expense of the original Campbell's brand. Chunky's most recent advertising retained the long-running tagline "The soup that eats like a meal" and featured professional football players being accosted by their mothers (usually played by actors), who used various humorous ruses to ensure that their sons were eating Chunky soup. Launched in 1997, the campaign ran for many years, corresponding with a period of enormous Chunky sales growth, despite the fact that industry critics typically disliked the spots' lack of subtlety and unsophisticated attempts at humor.

M'M! M'M! GOOD! TO GO

In early 2003, prior to the "Make It Campbell's Instead" campaign, Campbell unveiled a marketing, packaging, and promotions platform uniting its portable lines of soups. Recasting the well-known Campbell's slogan, "M'm! M'm! Good!"—which dated from the 1930s—the "M'm! M'm! Good! To Go" initiative consisted of the introduction of single-serve microwaveable soups as well as the inclusion of the Campbell's Soup at Hand "sippable" brand under the new "To Go" banner. Packaging and in-store materials directed attention to the convenience-enhancing innovations of the "M'm! M'm! Good! To Go" products, and a significant portion of Campbell's overall advertising budget was devoted to spreading awareness about the new and repackaged products. The "M'm! M'm! Good! To Go" soups represented one of the most promising avenues for Campbell's growth, and their inclusion in the umbrella "Make It Campbell's Instead" campaign increased the credibility of that broader effort's primary claim, which was that Campbell's products were a convenient and wholesome substitute for a wide range of meals and snacks.

MARKETING STRATEGY

"Make It Campbell's Instead," which ran on television during the 2003–4 soup season—fall through spring—at an estimated cost of $100 million, represented a sizable risk for Campbell, because it departed from the company's previous advertising in more ways than one. The tonal dissimilarity of the irreverent, reality-based TV spots to the emotional, family-oriented advertising of Campbell's more successful past was perhaps the most obvious change in the eyes of consumers, but the unification of Campbell's full line of soups under one advertising platform was an important strategic shift as well. Larry McWilliams stated in a press release, "[W]e're single-minded in our focus to change how people think about soup. A unified platform will maximize the impact and efficiency of both our message and our media buying … Our aim is to shake consumers up with a very different creative effort that will get them thinking about soup in new ways." The campaign also featured far more individual spots than a typical Campbell's campaign, which allowed the ad agency to use a variety of different pitches tailored to specific targets and products. This comparatively drastic rethinking of the company's advertising strategy was supported by the changes in product formulation, packaging, and shelving that had recently been announced.

The TV spots were shot on location with small crews using handheld video cameras instead of film, a strategy aimed at generating a look of immediacy that was in keeping with the reality TV shows of the time. The first spot was called "Anthem," and it showed host Elliott confronting a succession of ordinary people in an office setting and on a street, asking them to try the Campbell's products newly available in microwaveable containers. Other unscripted commercials showed Elliott barging into real families' homes during meals and arguing that they should "Make it Campbell's instead" and putting Soup at Hand containers in the hands of drivers stopped at street intersections. Reflecting on the usefulness of these encounters for the purposes of advertising, Elliott told Advertising Age, "Nothing works better than letting real people tell you what they think."

These commercials alternated with others featuring celebrities who were paired with specific brands in ways that leveraged the appeal each had among particular groups of TV viewers. Elliott arrived at the home of trendsetting New York restaurateur B. Smith in one commercial, with the suggestion that she try Campbell's Select Italian Wedding soup, one of the company's most popular upmarket offerings, rather than cold sandwiches. In another commercial Elliott traveled to the Indiana home of the Dilley sextuplets, where he demonstrated for the benefit of the six siblings and their parents various ways of creating interesting new meals by adding common household mixings and toppings to Campbell's Tomato Soup. In the spot featuring rapper Bow Wow, Elliott and the 16-year-old star squared off for a game of one-on-one basketball, with the winner to receive a meal of Campbell's Chicken Noodle Soup. In a slight twist on the other commercials' concept, one spot showed Sandra Lee, who had her own Food Network show and was the author of the best-selling cookbook Semi-Homemade Meals (in which she offered recipes that used ready-made products such as Campbell's Cream of Mushroom Soup), instructing Elliott in the preparation of Campbell's Seafood Tomato Alfredo.

The commercials depended, for much of their effectiveness, on Elliott's personality and his ability to generate off-the-cuff humor and enthusiasm for the brand. Leavening his brazen intrusiveness with charm and poise, Elliott was able to disarm participants in the unscripted spots, and he showed considerable personal magnetism onscreen. His behavior in the commercials was meant to seem a daring update of the long-established advertising practice of employing spokespeople.

OUTCOME

The "Make It Campbell's Instead" concept remained in place through 2004, and the company put particular emphasis on extending the appeals to children, preteens, and teens that had first been tested in the Elliott-helmed commercials. Campbell also adapted the "Make It Campbell's Instead" theme to its new Carb Request soups, aimed at low-carbohydrate dieters, and to a series of Soup at Hand efforts aimed at women who tended to skip or skimp on lunch. Overall Campbell's change in approach—from marketing within the soup category to marketing its products as the answer to a wide variety of snack and mealtime occasions—was credited with spurring the company's long-awaited turnaround, and this change was substantially driven by the "Make It Campbell's Instead" campaign. In 2004, for the first time since the 1980s, Campbell's core condensed-soup brand not only stabilized its losses but also showed sales gains, topping the $1 billion mark in total sales. Campbell's company-wide sales growth began outpacing analysts' predictions, and the company was finally credited with arriving at a workable model for generating sustained success in an evolving soup marketplace.

FURTHER READING

Atkinson, Claire. "Campbell Pits FCB, Roster Shops." Advertising Age, December 30, 2002.

Cassidy, Hilary. "Campbell Soup Hot for Sports; Mr. Phelps Accepts New Mission." Brandweek, December 8, 2003.

Ellison, Sarah, and Suzanne Vranica. "Campbell Warms Campaign to Heal Soup Sales—Reversal of Slide Is Vital as Restructuring Proceeds." Wall Street Journal, December 26, 2002.

Garfield, Bob. "Four Campaigns Demonstrate the True Meaning of Creative." Advertising Age, December 8, 2003.

Reyes, Sonia. "Campbell Soup Bolsters Ad Team." Adweek, November 10, 2003.

Thompson, Stephanie. "Campbell Bets $100 Million on Edgy Ad Effort." Advertising Age, August 4, 2003.

―――――――. "Campbell Flagship Suffers Sales Slide." Advertising Age, September 16, 2002.

―――――――. "Campbell Soup Chief Energizes Marketing." Advertising Age, January 27, 2003.

――――――. "Mobile Meals Gaining." Advertising Age, June 23, 2003.

―――――――. "Souping Up a Classic." Advertising Age, May 2, 2005.

                                                Mark Lane