Campbell Just Bought Another Soup Company for $700M
On Thursday, the world’s largest soupmaker, Camden-based Campbell Soup Company, announced that it has swooped down to acquire Oregon-based soup company Pacific Foods for $700 million in cash.
The deal is Campbell’s response to changing consumer demand. Pacific Foods specializes in organic soup and broth and its farm-to-table ethos will allow the New Jersey soup titan to appeal to customers that want natural options. The company, which has been around for almost 150 years, has reported weak sales in the recent past, even after it created its very own fresh food division in 2015 to sell carrots, refrigerated beverages and salad dressings, among other items.
“This acquisition is consistent with our Purpose, ‘Real food that matters for life’s moments,’” said Campbell’s president and CEO Denise Morrison. “The acquisition allows us to expand into faster-growing spaces such as organic and functional food.” According to the company, organic food is a $11 billion market in the U.S., which grew at an annual growth rate of 15.3 percent over the past four years.
In the last year, Pacific Foods has thrived in the organic sector, generating about $218 million in revenue. It employs about 540 employees and operates a certified organic plant where it produces namesake products. Campbell plans to finance the deal with debt and will integrate the company into its Americas Simple Meals and Beverages division, which includes Campbell’s soup, simple meals and shelf-stable beverage units in the U.S., Canada and Latin America.
The deal is Campbell’s fifth acquisition in just five years as it tries to find its footing in a continually evolving retail landscape. The trend began in 2012, when the company bought Bolthouse Farms for $1.55 billion, followed by the acquisition of organic baby-food company Plum Organics and biscuit company Kelson, both in 2013. In 2015 Campbell acquired fresh salsa and hummus maker Garden Fresh Gourmet for $231 million.
Pacific Foods CEO and co-founder Chuck Eggert will stay on as a supplier of ingredients through his family farms out West. “We’ve spent the past 30 years focused on making nourishing foods with an emphasis on simple, organic ingredients and authentic, rich flavors,” Eggert said in a statement. “Looking ahead, a future with Campbell means we can maintain what we value while accelerating growth of the brand in a way that we couldn’t do alone, reaching more people while increasing our impact on sustainable agriculture.”
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