View full sizeCie Stroud/For The Star-LedgerCampbell's President and CEO Denise Morrison poses outside the company's headquarters in Camden.
CAMDEN — The new varieties of Campbell's soups, Moroccan Style Chicken with Chickpeas and Creamy Red Pepper with Smoked Gouda, are nothing like the ones your mother kept stacked in her kitchen cabinet. They don't even come in cans.
And that’s exactly what Denise Morrison, the chief executive officer at Campbell Soup, is counting on.
When Morrison became CEO last year, she took on the daunting task of reinvigorating the 140-year-old Camden company. The mandate required making soup more convenient, more ethnic, more hip.
For all its nostalgia as a comfort food, sales of Campbell’s soups, with their iconic red-and-white labeling, were slipping, especially among younger food shoppers.
A year into her new job, it’s as if Morrison is adding a splash of hot sauce to spice up a cherished family recipe that everyone had started to consider bland.
She is leading the launch of nearly 50 new products, ranging from new varieties of Chunky soup to a new line of Campbell’s Go Soups in pouches. The products, which include a line of skillet sauces for making easy, tasty dinners, are meant to entice new customers and, over time, heat up the company’s lukewarm soup profits.
Morrison’s mandate includes more than cooking up new recipes though. Campbell is investing millions in new marketing and merchandising strategies — where the products are placed in grocery stores — in an effort to reach the nation’s 80 million millennials — discerning, tech-saavy consumers between the ages of 25 and 35.
Morrison is also showing some old-fashioned moxie as she takes Campbell Soup, a company with $8 billion in annual revenues, into such fast-growing — and unlikely markets as organic juices. Initial Wall Street reaction has been positive.
"We believe management’s strategic and tactical plans have changed for the better,’’ Goldman Sachs analyst Jason English said in a Aug. 13 research note. "Campbell appears to have its most robust slate of innovation in a decade.’’
Erik Gordon, a professor at the University of Michigan’s Ross School of Business, said the venerable company had to do something to improve its lackluster sales. "They knew they needed a turnaround," he said.
At Campbell, soup represents the largest part of the company’s business, roughly 35 percent. During the past few years, it has experienced a steady year-over-year decline and while more robust sales of Goldfish crackers, Prego sauces and Milano cookies have helped, analysts said the soup sales figures represent a major headwind.
Morrison doesn’t disagree. "Our soup and simple meal business is a powerful engine, but by itself, it cannot take us where we want to go," she said last month during a meeting with analysts. "We know it needs repair. We know how to fix it, and we know how to grow it."
View full sizeCie Stroud/For The Star-LedgerCampbell's new line of Go Soups.
To get a sense of what’s possible, consider Old Spice, marketed by Procter & Gamble.
The manufacturer made a bet on a sexy, horseback-riding man and a viral video campaign to rekindle interest in a passé brand.
"For at least 20 years, Old Spice was a joke. It was a tired, terrible brand," Gordon said. "They turned it into this wild, with-it stuff that my kid in college uses."
Like Procter & Gamble, Campbell’s problem centered on changing demographics.
"The canned soups, particularly the condensed soups, skew to a much older customer," said Alexia Howard, a food industry analyst with Bernstein Research.
When Morrison moved into the corner office last August, she gave the company’s consumer insights group a clear directive to get an understanding of the millennial consumer.
"She wanted us to make it a priority," said Chuck Vila, the vice president of consumer insights.
Vila and his colleagues went to such "hipster hubs’’ as Austin, Portland and San Francisco to study the rituals and preferences of people in their mid-20s and 30s. They shopped with them. They ate at their favorite food trucks, neighborhood restaurants and, sometimes, they ate home-cooked meals in their homes.
"We learned a lot,’’ Vila said. "They are restless spirits with adventurous tastes."
From those insights came the exotic-sounding soup varieties, edgy graphics on packaging and new skillet sauces that promise easy-to-prepare, gourmet-sounding dinners.
Packaged in pouches, the sauces take minutes to prepare, come in six varieties, including fire roasted tomato with red bell peppers and cilantro and creamy chipotle with roasted corn and black beans.
The 58-year-old Morrison, who grew up in the Elberon section of Long Branch, has a reputation among employees for being smart and tough. Her experience in the sales and marketing with some of the food industry’s giants is extensive.
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She spent time at Pepsi-Cola and Nestle and then at Nabisco before following a mentor, former CEO Douglas Conant, to Campbell Soup in 2003.
Gordon, the University of Michigan business professor, said the breadth of experience inside and, especially, outside Campbell Soup makes her better suited to guide the company through a period of change.
The company’s growth strategy was carefully crafted to be respectful of the company’s founders — members of the Dorrance family remain major shareholders — while trying to reach outward in order to shape the company’s future.
Once the investment began to produce real products, Morrison said it galvanized employees throughout the company.
"As the leader, you’re empowering talent,’’ she said during a conversation in her office last month. "Once you’ve given the direction, it’s a joy to see it put into action, to see people on every level of the company carrying out the strategy.’’
The company’s turnaround strategy means new flavors of V8 Splash, new packaging for V8 V-Fusion juices and new advertisem*nts for the Milano Slices sold by Campbell’s Pepperidge Farm division. It is also trying to gain traction in Russia and China.
In July, Campbell’s spent $1.5 billion to purchase Bolthouse Farms, which built a line of healthy fruit juices and salad dressings around a robust carrot business.
Bolthouse, based in California, represents the company’s largest acquisition and gives it entry into the $12 billion — and growing — packaged fresh foods market.
For Campbell Soup, Gordon said, the acquisition was uncharacteristically bold.
"People saw it as an emboldened move,’’ Morrison acknowledged. "That creates a halo effect. If your leader is making bold – not risky — moves, it emboldens everyone.’’
Morrison is careful to emphasize that the company is not abandoning its core business in pursuit of growth. "We will not lurch widely,’’ she has said.
But there’s a lot riding on her ability to make the turnaround work. In a recent research note, Howard and other analysts with Bernstein Research said the new soup and sauce products will need to achieve $82 million in sales next year "just to keep the category flat.’’
Gordon said it differently. "She’s in the hot seat,’’ he said. "Her stuff has to start working.’’
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