When you think about brands that need a strong fourth quarter to save them from running in the red, you might not think of soup … but Campbell surely is. The soup company has been flailing as sales numbers are falling across the board.
Recently, shares of Campbell Soup dropped more than 7 percent, as overall sales fell 9 percent since this time last year. Apparently expecting more of the same, Campbell dropped its earnings projection for 2018 as well. No good news all around.
Campbell CEO Denise Morrison was reported by the AP as saying, “…the operating environment remains volatile with a rapidly evolving retailer landscape and competitive activity…” Which, loosely translated, means prices are coming down. But, of course, that’s not the only explanation.
Morrison may be tacitly pointing to Amazon’s recent purchase of Whole Foods, the high-end grocer who immediately cut prices after the takeover. Amazon owning WF, led other big national companies such as Kroger and Safeway to drop their prices in an effort to avoid becoming collateral damage in a war between Walmart and Amazon that’s jumped offline and come right into your local grocery store.
Lower prices mean lower sales figures for Campbell, as well as other pre-packaged brands such as Kraft Heinz and General Mills, which are among several companies with multiple brands in the dry goods grocery section. These lower prices really only give these companies one option for increasing revenue: they need to move more product off the shelves.
That task could be a daunting one as more people are choosing to eat fresher or on fad diets that point them away from anything with extra preservatives or other necessities of packaged food, like increased sodium or artificial anything.
So, how can the holiday season save Campbell and these other companies from a dismal end to 2017? Simple: holiday meals. People spend a ton celebrating the string of holidays in November and December. Canned goods fly off the shelves as people make recipes they typically only use once a year.
From cornbread casserole, to green bean casserole and all sorts of baked goods, snacks and other holiday buffet table fillers, people tend to pick ingredients canned or boxed by these companies.
Will it be enough to give Campbell a rosier outlook in the new year? At this point, it doesn’t look like that will be the case, but they need to start digging out of the hole now if they expect to get anywhere close.
Ronn Torossian is the Founder and CEO of the New York based public relations firm 5WPR: one of the 20 largest PR Firms in the United States.