Campbell rethinks its recipe as consumer tastes change
Image

Bryan Thomas / The New York Times

The headquarters of Campbell Soup in Camden, N.J., Oct. 14, 2015.
Campbell has moved to address changing food trends and a gradual sales
decline, banishing ingredients and reaching out to consumers via social
media.

By Stephanie Strom, New York Times News Service

Tuesday, Nov. 10, 2015 | 12:16 a.m.

CAMDEN, N.J. €” Food companies tinker with the signature products in
their portfolios at their own risk €” and few products are as classic as
Campbells chicken noodle soup.

Now, Campbell Soup is altering its famous broth, with the new recipe
appearing first in a limited-edition line in cans festooned with
Chewbacca and other figures from the coming €œStar Wars€� film.

The new version of its chicken noodle soup contains 20 ingredients, most
of which can be found in the average home kitchen, compared with 30 in
its previous incarnation (sold last year in cans featuring the Avengers).

€œWere closing the gap between the kitchen and our plants,€� said Denise
M. Morrison, chief executive of Campbell.

Under Morrisons leadership, which began in 2011, Campbell has moved
quickly to address changing trends in the marketplace for food and to
try to stanch the gradual decline in unit sales, a measurement of the
number of cans of soup sold.

The company is banishing ingredients that todays consumers do not like
and using advertising and social media to have a conversation with
consumers about what it is doing. Acquisitions have also given Campbell
toeholds in new markets and brought new ideas to the organization.

€œBefore, when we talked about our business, we talked about how many
cases we shipped,€� Morrison said in an interview here in her office.
€œToday, were talking about our food€� €” as in whats in it, where it
comes from and what effect it has on the environment.

Changing those traditional recipes carries quite a bit of risk.

€œIts a delicate balance because these products are beloved,€� said
Charles Vila, vice president for consumer and customer insights at
Campbell. €œTheir profile has become very defined in the consumer mind
over the years, so any change we make is very carefully considered.€�

The company also has an incentive to bolster the anemic sales of soup,
its core product.

Globally, soup sales peaked in 2012 at $16.2 billion and have stagnated
since, last year ringing up $16 billion, according to Euromonitor, a
consumer research firm. Euromonitor estimates that sales will fall
further this year, to a little more than $15 billion.

Reasons for soups slump are hard to pin down, said Emily Balsamo, a
research analyst at Euromonitor.

€œIts a similar situation in a lot of categories, I would say, where I
think theres just a lot of distrust of larger, established food
companies,€� Balsamo said. €œWithin the soup category, and even within
canned soup category, smaller brands like Annies and Amys Naturals or
Hain Celestials are doing relatively better €” maybe it has something to
do with them being largely organic.€�

In fact, Balsamo said, early sales of Campbells new line of organic
soup sold in cartons are strong.

But Campbell, which largely relies on the United States market for its
soup sales, has more to lose than most other big companies selling soup.
Campbell Soup accounted for almost three-quarters of the $1.6 billion in
condensed soup sales here last year, but its unit sales fell more than 5
percent, according to IRI, a data and research firm.

The company also dominates the ready-to-eat soup business, but there,
too, it lost more than 5 percent of market share last year. (Campbell
has attributed some of the decline to reductions it made in promotional
deals with grocery chains.)

Other big soup producers like General Mills, which makes the Progresso
brand, and private-label soup brands also declined in sales. IRI data
shows, on the other hand, that Pacific Foods of Oregon, a maker of
organic soup, is gaining market share.

Morrison speaks more candidly than most of her peers about the effect
that changing consumer preferences and demographics are having on
Campbell and other large food companies, which she described as €œseismic
shifts.€�

€œThere are 80 million millennials now, and theyre shopping and thinking
differently about food and in a way that is influential,€� she said.

She said changes in the family are also challenging food companies.
€œFamilies now are multicultural, multigenerational, single parent, same
sex, mixed and traditional,€� Morrison said.

She also noted that the numbers of middle-class consumers, who powered
sales for so long, are shrinking. €œFood companies largely serve the
mainstream, but theres a shrinking middle class in the U.S., a widening
chasm between the haves and have-nots,€� Morrison said.

About a year after Morrison took the helm, Campbell shocked its peers by
buying Bolthouse, a maker of juice and salad dressings, and overnight
became one of the worlds largest carrot growers. Bolthouse gave
Campbell entree to the coveted perimeter of the grocery store at a time
when consumers were increasingly shunning the middle aisles that were
long home to the companys products.

The next year, Campbell bought Plum Organics, a fast-growing producer of
pouched baby and childrens foods that deftly uses social media to
connect with consumers.

In the last year, 40 percent of Campbells advertising budget has gone
to social media and digital advertising, in large part based on what it
has learned from Plum, according to Mark Alexander, president of the
companys U.S. business.

Campbell then opened an avenue into China with the purchase of the
Kelsen Group, a Danish maker of cookies and snacks with an impressive
footprint in Asia. And this year, Campbell acquired the tiny Garden
Fresh Gourmet, a purveyor of refrigerated salsas and dips, in a nod to
the growth of snacking.

At the same time, Campbell has added new products like Skillet Sauces,
sold in pouches, and Slow Kettle soups in tubs €” just heat and eat. Such
products play the same role in Americas kitchen as Campbells soup did
in the past, offering kitchen cooks shortcuts and busy consumers a quick
meal.

€œWeve really accelerated our innovation program,€� Alexander said.
€œAbout 11 or 12 percent of our sales last year came from products
launched in the last three years, compared to mid-single digits in the
past.€�

Campbell is retooling its traditional portfolio as rapidly as it can.

€œThe biggest challenge was time,€� said Jesse Fellows, a senior
technologist for product development at Campbell, who was charged with
simplifying chicken noodle soup.

It took two months of intense work to come up with the balance of
ingredients that would produce a broth and noodles that tasted the same
or better than the soup that had been produced the same way since 2011,
when Campbells tweaked the spices and reduced the beta carotene used to
impart color.

Those were relatively simple changes. Fellows was asked for a more
thorough overhaul aimed at getting rid of ingredients that are out of
favor, things like monosodium glutamate, or MSG, and disodium inosinate
and disodium guanylate, which enhance flavor, as well as things like
vegetable oil and cornstarch. (Celery was eliminated because child
taste-testers didnt like the flavor, a spokeswoman said.)

By changing the proportion of yeast extract and other flavorings,
Fellows said, he was able to offset the loss of the chemical flavor
enhancers. And working with Campbells chefs, he added and subtracted
things like water and dehydrated chicken broth.

€œThe culinary department owns the flavor, and we worked hard to uphold
the reputation of chicken noodle soup,€� said Bryan Cozzi, a test chef at
Campbell.

But the process does not end when Fellows and Cozzi finish their work.
They may be sent back to the drawing board if the new formulation adds
cost to a product.

€œOften the biggest challenge is affordability,€� said Jeff George, vice
president for research and development. €œIn some cases, we can pass on
the cost, but often, we cant.€�

Campbell may even tinker with shipping cases and labels to bring the
cost in line.

This fall, Campbell began a new advertising campaign, €œMade for Real,
Real Life,€� which aims to reintroduce consumers to the idea that soup
can be a staple in the kitchen. The first spot in the series, which
features a *** couple feeding their young son Campbells Star Wars
chicken noodle soup, kicked up a controversy, but Campbells shrugged it
off.

€œNo one has seen the whole campaign,€� Campbells Vila said. €œThere are a
variety of families in it, reflecting the mosaic of families we have in
America today.€�

The second ad in the series features a mother and father preparing an
organic tomato soup for their son. €œAt least we know what hes eating,€�
the young father says to his wife €” oblivious to his son, licking a glue
stick at the table.

In the kitchens here, food scientists and chefs are gingerly tinkering
with Campbells classic tomato soup.

Mostly, that is about replacing high fructose corn syrup with sugar. But
that changes the taste and texture slightly €” one test version was less
sweet, more tangy and slightly less silky in the mouth.

€œWill that make a difference to consumers whove eaten this soup for
years and love it just the way it is?€� George said. €œThats the question
we ask ourselves over and over again.€�