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Campbell tries a new recipe for success

Annie Baxter Feb 25, 2015
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Campbell tries a new recipe for success

Annie Baxter Feb 25, 2015
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Campbell Soup Company reports its second-quarter earnings on Wednesday, and it’s already warning it expects those numbers to be down given the strong dollar.

UPDATE: Campbell reported a second-quarter profit of $312 million. That’s down from the reported $361 million from the same period a year ago. The company also said that sales decreased 2 percent, citing “the negative impact of currency translation.”

The company recently announced a restructuring aimed at cutting about $200 million in annual costs over the next three years. Campbell will use that money to invest in new product lines, moving away from its iconic soup, whose sales have thinned over the past few years.

Campbell is trying to capitalize on consumers’ interest in organic and fresh foods. In 2013, it acquired Plum Organics, maker of organic baby food. Erin Lash, senior equity analyst at Morningstar, says organic baby food has a lot of growth potential.

“A lot of times parents are willing to pay up for products for their kids while pulling back spending in other areas,” she says.

Campbell also acquired Bolthouse Farms a few years ago. Its products include baby cut carrots and smoothies.

“There seems to be a slow but steady shift towards fresh consumption,” says Darren Seifer, the food and beverage industry analyst at the NPD Group.

 

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