NEW JERSEY, United States — Campbell Soup Company has taken steps to drive innovation in its health and wellbeing categories with the acquisition of organic food company Pacific Foods for $700 million.
According to Campbell Soup, Pacific Foods – a natural foods industry pioneer, with strong health, wellbeing and organic credentials – has an approach that is very closely aligned with its own. It is hoped the deal will help to accelerate Campbell’s efforts to deliver real food and beverages that meet consumers’ changing tastes and preferences, as well as boost the brand’s appeal with the younger generation.
Expanding on the strategy behind the new deal, Denise Morrison, Campbell’s President and CEO explained how the acquisition will allow Campbell to expand into faster-growing spaces such as organic and functional food. The organic food category generated $43 billion in sales and boasted a growth rate of over 8% in the US last year, while industry reports expect the global-functional food market to reach $92.3 billion by 2021, both of which Campbell have been keeping a close eye on.
In addition to providing an inroad into these growing categories, Pacific Foods will improve Campbell’s “strategic imperatives around real food, transparency, sustainability and health and well-being,” argued Morrison.
With Pacific Foods set to become part of Campbell’s Americas Simple Meals and Beverages division, which includes its soups and shelf-stable beverage units, Campbell hopes to boost sales in the unit, which dipped by 2 percent in the third quarter.
For Pacific Foods, a future with Campbell means the company can “maintain its values while accelerating the growth of the brand in a way that it couldn’t do alone, reaching more people while increasing our impact on sustainable agriculture.” explained CEO and Co-Founder Chuck Eggert.
The latest in a series of moves Campbell has made to diversify its portfolio in response to increased consumer interest in health and wellbeing, the Pacific Foods acquisition highlights just one of the steps it is taking to strengthen its position in the food industry, which according to Morrison is more complex and challenging than ever.
“Across every industry and in every organization, the pace of change is unpredictable, unrelenting and unforgiving,” she explained in a statement earlier this year.
In response to this, the company will be looking to leverage more opportunities and disruptions driven by the intersection of real food, health and wellbeing, in order to fully unlock its performance over the next decade.