Campbell’s Q4: With Soup Sales ‘Steady,’ Well Yes! Will Relaunch

In its fourth quarter earnings presentation yesterday, Campbell’s Soup Company reported that its net sales increased 18% to $2.1 billion over the quarter as consumers continued to partake in “quick scratch cooking” while also stocking up on snacks.

The quarter’s sales grew the company’s confidence in its soup business, president and CEO Mark Clouse said during the call, a two-year effort to reframe its portfolio for health and wellness-minded consumers.

“Soup is a little bit less about peaks and valleys, but really that steady progress,” Clouse said. “If you’re able to accomplish that in conjunction with what we believe we can do on snacking and the Meals & Beverage business, it really does position us in a very advantaged way.”

Campbell’s Meals & Beverage sales grew 28% in the quarter, fueled by its soup brands, Prego sauce, Campbell’s brand pasta and V8 beverages. Though shoppers have shifted from indulging in comfort food toward healthier recipes, Clouse noted, Campbell’s products have remained a valuable solution.

“Our products are staying right in there, with the combination of what we offer with Pacific, the recognition that a lot of the quality improvements and some of those historical barriers to the can that we really have been working on to overcome,” Clouse explained. “I think we’re seeing great indication that we’re moving through it.”

According to Clouse, shifting consumer trends have also led the company to adapt its 2021 innovation plans. Next year, Campbell’s will relaunch its better-for-you soup brand Well Yes! — hoping to help sustain its fresh base of younger consumers, who drove nearly half of Q4 sales. The goal is to create a more balanced portfolio that serves the new generation of shoppers, executives explained.

The Well Yes! relaunch will feature a packaging overhaul and quality improvements, along with a drop in price. The announcement comes after the company added two new flavors to the line earlier this year.

Campbell’s will also introduce two new flavors of Swanson sipping broths, Chinese Spice and Moroccan, along with three new condensed canned soups from organic broth brand Pacific. Slow Kettle’s “topped” line, which offers a microwavable cup of soup and crunchy topping packaged together, will launch nationally.

During the quarter, snack sales grew 11%, with a boost from tortilla brand Late July, which saw sales increase 30% year-over-year. Though Late July and other Campbell’s snack brands compete in highly competitive segments, Clouse said the products hold a “differentiated position” on shelf. However, maintaining “premium positioning” without dropping prices as low as mainstream players is a “balancing act,” he added.

Helping drive Late July’s sales, the company ran a national campaign for the brand during the fourth quarter. Overall, Campbell’s increased its marketing and sales spend 36% to $265 million in the quarter. The company also spent 86% of its quarterly Meals & Beverage budget on e-commerce, which saw sales grow 100% year-over-year in Q4.

“Our ability to show growth there creates a really great platform for us to connect to consumers in a very specific way to influence them,” Clouse said.

Looking ahead, Clouse expects elevated demand into the first quarter, though he noted less of an uptick in single-serve snacks during the current back-to-school season. Still, he said, there’s increased demand for bulk snacks and soup for lunches at home. Additionally, most SKUs eliminated during the pandemic will return in Q1, he said, and Campbell’s will further refine its operations after recent supply chain disruptions.