Retailers, consumers and prices
Campbell Soup CEO blasts rival Progresso
*Corrects blog post from Tuesday to show General Mills’ “World Recipes” soups are ”ready-to-serve” not “ready-to-drink”.
It is not every day that CEOs truly speak their minds about their rivals in public, so we thought we would share.
During Campbell Soup Co’s annual meeting yesterday with analysts and investors, CEO Douglas Conant fielded a question from an analyst about the company’s marketing messaging. The analyst said rival Progresso Soup owner General Mills Inc had recently said it felt that the entire soup category was over-emphasizing the message of convenience and health in its marketing and under-emphasizing taste.
Being the category leader, of course Conant took it to heart.
“This Progresso thing is a joke, I’m sorry,” Conant said. “If there was such an opportunity to talk about taste, why aren’t they talking about it? Why aren’t they growing? Why aren’t they performing? They haven’t innovated, they haven’t carried a convincing message. They’ve lost share, they’ve lost their way, they’re not relevant with the retailer in a significant way in the category. They ought to follow some of their own advice.”
He said the biggest innovation he’s seen from General Mills is in the area of fiber, noting it “might have worked for cereal. It didn’t particularly work well for soup.”
“They’re a small share player in a big pond,” Conant said.
A spokeswoman from General Mills declined to comment on Conant’s comments.
Campbell’s ready-to-serve soup business in the United States has been hurt in recent quarters by competition from other simple meals, such as frozen dinners, which have seen a lot of promotions. But following the meeting, Janney Capital Markets analyst Jonathan Feeney said in a research note that he thinks Campbell could switch its tactic.
“We think Campbell understands the need to de-emphasize its portfolio’s premium and wellness distinctions at the point of purchase and refocus the consumer on soup’s value and taste benefits to reignite category volume growth,” Feeney wrote.
Campbell said it would put more emphasis on its broths and condensed soups, which are used in cooking. It is testing new versions of its classic tomato soup, made with yellow and orange tomatoes. Campbell’s had a 49 percent share of the US canned soup market in 2008, according to Euromonitor International, while Progresso had 16 percent. That year is the latest for which Euromonitor has data available.
At General Mills’ recent analyst day, it discussed new products such as a “World Recipes” line of ready-to-serve soups.