Campbell Soup FY 1Q16 Earnings Call Notes

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Campbell Soup’s (CPB) CEO Denise Morrison on Q1 2016 Results

The operating environment remains challenging

“Looking at the operating environment, conditions remain challenging. In the United States, the economic situation is mixed. Unemployment continues to improve, but consumers remain very cautious. We’re continuing to see Americans save more and spend less amid the uncertain economic climate. Outside the U.S., we’re seeing macro-economic challenges in other markets where we have significant operations, including Canada, China and Indonesia.”

The industry is creating value through consolidation, spin-offs and cost cutting

“Generating growth in this environment has been and remains difficult. As a result, the industry continues to respond with consolidation, spin-offs, aggressive cost cutting programs, and other measures to improve operational efficiency. Meanwhile, food retailers continue to respond by reconfiguring existing stores with a focus on the perimeter by launching new, smaller formats and by investing heavily in e-commerce capabilities.”

Consolidation and intensified competition are disrupting the landscape

“these are unprecedented times of change marked by challenging economic conditions. In the food world, consolidation and intensified competition are disrupting and altering the landscape. At Campbell, we remain clear-eyed about our challenges, focused on the consumer, responsive to our customers, and dedicated to delivering against our purpose”

We’re shifting 40% of our ad spend to digital

“we’re shifting our spend overall to about 40% of our spend in digital, and that is creating a different dynamic between working and non-working media. ”

We’re establishing a beachhead in fresh food

“we’re establishing a real beachhead in fresh food, bringing Campbell’s suite of capabilities to that faster growing part of the food business. We are being really transparent about our products with our new website, whatsinmyfood.com. We are talking to consumers about what’s in our food, and the ingredients we use, and how it’s made. And these are just steps that really distinguish us and are very true to activating our purpose with the consumer.”