(See UPDATE with Campbell comments below) Campbell Soup, based in Camden, has made a "stark shift" toward "taste- and brand-driven innovation" and moved away from "the low-sodium and wellness messaging of the prior three years," writes analyst Jonathan Feeney in a report this morning to clients of Janney Capital Markets, Philadelphia. (A similar embrace of fatty new sandwiches is helping lift Wendy's at the expense of longtime U.S. burger champ McDonald's, whose new health-ier food isn't selling, Feeney's colleague Mark Kalinowski tells clients).
"Listening carefully to the customer has driven a return to good-tasting, foolproof innovations like tastier, more filling Chunky varities --[for example] Philly Cheesesteak soup -- replacing 'All Natural' ready-to-serve soup with 'Home Style' Goldfish Mac & Cheese -- an intelligent extension into a kid-heavy adjacency - and even V8 Bloody Mary Mix, an obvious and foolproof line extension, if ever there was one," Feeney wrote.
He expects the shift to cheesy, fatty kid stuff, plus expanding popular old brands into new products, will boost sales and profits, despite the long-term drop in Campbell advertising spending. Still, Feeney's not sure Campbell's promising moves, by themselves, justify its one-third stock market rise year to date. Rather, he suspects investor excitement about a possible Campbell takeover after Heinz Food was sold earlier this year has juiced shareholder hopes the soup-maker will also be taken out at a fat sale premium. "But that is unlikely anytime soon," Feeney concludes.
UPDATE: "Health and wellness mean different things to different people," Campbell spokeswoman Carla Burigatto told me. Campbell hasn't walked away from healthy; it sells "over 100 products that meet the criteria for the American Heart Association heart check mark" -- Healthy Request soups, low-salt juices, Prego Heart sauces, Pepperidge Farm Whole Grain breads.
She also noted new healthier products like "gluten-free Goldfish Puffs" and new products in in "faster-growing" categories of Bolthouse fresh vegerables and newly-acquired Plum Organics baby food.