The question is whether the Camden-based company will be able to hold on to a large enough portion of those consumers to generate long-term growth for a 20th-century giant of packaged food that has struggled to grow for decades.
Campbell has a “unique opportunity” to solidify its relationship with millions of people who have turned to its canned soup and other products to help them through weeks of COVID-19 lock downs, Mark Clouse, Campbell’s president and chief executive, said Wednesday during a conference call with analysts on its third-quarter results.
The number of U.S. households that bought some version of Campbell’s soup increased by 10 percentage points in the 13 weeks ended April 26, Campbell said, relying on data from IRI, a Chicago-based research firm. That could translate into 10 million households. Campbell said many of the householders were younger.
It’s not certain that the gains will last.
Canned-soup sales had been declining for many years before the pandemic, and the main reason was that people weren’t eating lunch at home anymore, said John Stanton, a professor of food marketing at St. Joseph’s University.
That changed in March. “All these people are home, and so they’re buying more soup. It makes sense. The problem is they’re going to go back to work," Stanton said. “They’re going to go back to their original eating habits.”
Clouse told analysts he expects a slow migration to more away-from-home eating. Some level of remote working and virtual schooling will continue, he said.
Stanton agreed that some of the incremental sales will stick around.
Despite surging demand for its products — consumption of Prego pasta sauces jumped 50% in the quarter, which means lots of spaghetti dinners for American families — Campbell lost market share in soup because its factories couldn’t keep up with demand, the company said.
“Remember,” Clouse told analysts, "this is a supply chain that was supporting businesses that had been relatively flat to declining for the better part of the last decade [and] now were reacting to 40%-50% increases. Building that muscle group has taken a little bit of time.”
Comparable sales in the quarter ended April 26 were up 17%, with soup posting a 35% increase. Total sales in the quarter were $2.24 billion, compared with $1.95 billion in the comparable quarter a year ago. Last year’s results included $33 million in sales from a European business that was sold, which means the reported sales growth was 15%.
Net income was $168 million, or 56 cents per share, compared with $84 million, or 28 cents per share a year ago.
Campbell stock closed down 6.13% Wednesday, or $3.19, to $48.82 on the New York Stock Exchange.