Big Food has been scrambling to figure out how to become more startup-like. This is because big food companies have been steadily losing share to smaller ones.
There are many reasons for this — including a lack of consumer trust — but what most of them boil down to is that large food companies simply aren’t innovative or flexible enough to meet consumer demands.
Companies have taken a couple of different approaches to address this issue, most commonly through acquisitions and by investing in startups as well as incubators and accelerators.
Recently, Campbell Soup announced an even more dramatic move to accelerate innovation — a strategic reorganization of the company. Under the new structure, Campbell will operate as two different units: one that comprises the company’s core businesses (e.g., soup) and a new Accelerator unit. The Accelerator unit will include Campbell Fresh, a venture into fresh foods that the company is looking to ignite after a lackluster beginning, and “also be responsible for long-term innovation, small brand incubation, future consumer experiences, e-commerce, and new distribution models.”
Denise Morrison, the company’s President and Chief Executive Officer, commented in the press release: “This strategic reorganization—focused on our core, the integration of recent acquisitions, the Campbell Fresh turnaround, and long-term growth—provides the right structure for us to optimize the value of our businesses today, while creating future-oriented capabilities. It will simplify our operations, improve our execution and enable us to allocate resources with a greater focus on profitable growth.”
Campbell, like most big food companies, has struggled over the past few years as consumers move away from processed foods. “Canned soup is the epitome of a processed food product,” Euromonitor analyst Jared Koerten told CNN Money.
In response, the company has taken several steps to better align their products and messaging with what today’s consumers are looking for. On the product side, Campbell has promoted transparency and removed artificial ingredients and colors from its products, and also invested in organics and the fresh food market. On the messaging side, the company supports mandatory GMO labeling, an issue that led it to leave the Grocery Manufacturers Association and join the Plant Based Food Association last year. They’ve also expanded their sustainability efforts and made a commitment to improving animal welfare.
Whether these initiatives will pay off in the long run still remains to be seen. The company’s revenue hasn’t grown in three years, and while the stock price is still double what it was in 2010, it has declined by more than one-third since June 2016. The situation has recently been complicated by a decline in organic soup sales (a previously well-performing category) because of a dispute with Walmart.
Under Morrison’s leadership, Campbell Soup has sought to reinvent itself. Will the current reorganization help remain an iconic brand in the eyes of today’s hyper-aware consumers?