Campbell Soup Co. sees more consumers switch to private label in condensed soup and broths

On a yearly basis (12 months ended July 31, 2022), net sales increased 1% to $8.6bn while volumes fell 6% compared to FY21.

While most of its key brands including Campbell’s, Campbell’s Chunky, and Pacific Foods, remained at or slightly above FY19 market share levels, the company’s soup portfolio (while still growing) has lost some share to private label brands in the past year as more consumers exhibited trade down behavior.

Soups: ‘Chunky continues to be a star’

In Wet Soup (excluding condensed soup and broth), Campbell holds a 57% category share as of FY22 and grew dollar consumption by 8% compared to its competitors, who grew at a rate of 12%.

Looking at Condensed Soup only, Campbell still holds the lion’s share of the market with an 83% share. But the company is growing at a slower rate of 9% compared to the rest of the category which grew by 12% in FY22 vs. the prior year. 

Speaking on the Q4 2022 and FY22 earnings call on Thursday, Campbell CEO Mark Clouse said, “Although never happy with share loss in a category where we have a significant share leadership position, the strength of the category translates to compelling growth on a very important part of our portfolio.”

Addressing which consumers are trading down and why, Clouse said, “We have been very focused on which consumers are trading down within soup and they tend to be our baby boomer consumers, who historically are a bit more sensitive to price gaps and also very likely to trade back over time. The good news is most of our new millennial consumers in soup have been highly brand loyal.”

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