Campbell Soup CEO Mark Klaus has said the company may eventually split its snacks business from its food and beverage division, but cautioned that if that happens, it's unlikely to happen anytime soon.
““I’ve been very consistent in suggesting that we’ll always look at where there are value creation opportunities for shareholders,” Klaus said at the company’s investor day in New York this week. “And if there’s an opportunity or a point in time where we think (a spin-off) is worth discussing, we’ll certainly look at it. … It’s a possibility, but not today.”
Campbell is best known for its signature soups, but it has reduced its reliance on the product by prioritizing growth of brands like Goldfish and Pepperidge Farm and expanding its portfolio with the acquisitions of snack maker Snyder's-Lance and sauce maker Rao's. Sobos Brand.
Klaus expressed confidence in the “uniqueness and breadth” of the company’s 155-year-old brands and stressed that he was “excited to have the opportunity and the runway to see what this portfolio can deliver.”
With the recent success of several high-profile spin-offs in the food industry, it seems more executives are considering spin-off acquisitions.
Mondelez International, the maker of Oreos and Ritz, has been a prominent player in the snacks portfolio since it was spun off from Kraft Foods in 2012. And in October last year, Kellogg split into KelaNova, a spinoff focused on the fast-growing snacks business, and WK Kellogg, a mature cereal business.
But Kelanova's time seems short in itself. Mars is announced in August. announced that it would acquire the company for $36 billion. The deal Added Cheez-Its, Pringles, Pop-Tarts, and Eggos to our cookie-centric portfolio.
Erin Lash, director of consumer equity research at Morningstar, said in a research note: “Any Campbell separation would be viewed as an opportunity to unlock higher multiples for its portfolio of snack brands.”
Snack products accounted for about half of Campbell Soup's fiscal 2024 net sales.
Campbell's Soup went up in price on Tuesday. Organic sales growth forecast revised upward to 2%-3% from previous forecast of 2%. Packaged food company forecast Snacks grew at a rate of 3-4% per year, while meals and beverages grew at a rate of 1-2% per year.
Campbell Soup has 16 so-called “leadership brands” that it is prioritizing for growth. The New Jersey company, with nearly $10 billion in annual net sales, also owns Late July, Pacific, Prego, Swanson, Snack Factory and V8. Executives predict that Goldfish alone will be its largest brand, with sales of $1.3 billion by fiscal 2027.
This week, Campbell Soup announced plans to drop the word “soup” from its name to show that its future includes more than just signature dishes. Shareholders will vote on whether to change the name to Campbell’s Company at its annual meeting in November.
