Campbell is putting its focus back on North America while selling its international business units in a bit to reduce debt. It hopes to raise overall cost saving to US$945 Million by FY2022. Campbell said it is increasing its cost savings target by US$150 million by streamlining its organisational structure, expanding its zero-based budgeting efforts and continuing to optimise its manufacturing network.
Campbell’s interim president and CEO Keith McLoughlin said “the best path forward” to drive shareholder value is to focus the company on its core businesses in the North American market which has “a proven consumer packaged goods business model”.
“We are moving forward with a sense of urgency to complete these changes in fiscal 2019, setting the foundation for sustainable, profitable growth in fiscal 2020 and beyond,” he said. He added that a new leadership team will concentrate on “significantly improving operational discipline through a rigorous management model that aligns the enterprise from strategy through execution.”
In North America, the company will now leverage consumer insights and trends to drive relevance, including health and well-being, snacking and convenience. Each of Campbell’s brands will be managed with two differentiated portfolio roles:
- Drive profitable growth – These brands will be managed to grow disproportionately relative to the categories in which they compete. These include leading brands such as Cape Cod, Goldfish, Kettle Brand, Lance, Late July, Pace, Pacific, Pepperidge Farm Farmhouse and Milano cookies, Prego and Snyder’s of Hanover. Investments in innovation and consumer engagement will enable these brands to leverage evolving consumer tastes and trends.
- Maximise margin and cash flow – These at-scale brands will be managed to generate consistent profit and cash flow. These include leading brands such as Campbell’s soup, Pepperidge Farm fresh bakery, SpaghettiOs and V8. These brands will be managed with disciplined focus and aligned investments to support their strong market positions, to optimise operating margins and cash flow and to fulfill their equally important role in Campbell’s portfolio.
Currently, Campbell has engaged Goldman Sachs and Centerview Partners to commence a process to divest its Campbell International and Campbell Fresh businesses. Campbell International consists of Arnott’s and the Kelsen Group, along with the company’s manufacturing operations in Indonesia and Malaysia and its businesses in Hong Kong and Japan.
Earlier this year, Publicis Groupe was chosen as its agency partner for its APAC digital, technology and consumer promotion businesses. The group will also be responsible for media planning and buying globally. In a statement, the brand added that the move ensures all areas of spend are maximised to allow the company to be more competitive. It also reflects its ongoing bid to “modernise its marketing and integrate communications across disciplines”.
Marketing has reached out to Campbell for comment.