Campbell Soup Co. plans to cut at least $200 million in expenses over the next three years, with a little less than a third of the savings expected to come from an unspecified number of job cuts, the Camden food company said Wednesday at an investors conference in Florida.
The savings will amount to 2 percent to 3 percent of the company's annual revenue and provide money for expansion in product areas that are growing faster than its legacy soups, sauces, and beverages that are sold in the center aisles of supermarkets, the company said.
Campbell employs about 1,200 in Camden, spokeswoman Carla Burigatto said. The company did not provide any specifics about how the cuts would affect employees.
Since June, Campbell has been reviewing its operations and found that it has excess layers of management and "suboptimal spans of control," Denise Morrison, Campbell's president and chief executive, told analysts at the Boca Raton event sponsored by the Consumer Analyst Group of New York.
Because Campbell has historically had decentralized operations with distinct headquarters for divisions, such as Pepperidge Farm's in Connecticut, "we are not fully leveraging the potential scale of common processes across our divisions," Morrison said. That's another area to be targeted for savings.
Campbell's shares were up 26 cents, or less than 1 percent, to $47.18 on the New York Stock Exchange.
If Campbell succeeds in its cost-cutting efforts, the savings will help it recover from a huge reduction in gross operating profit margins in recent years, as the company has expanded into faster-growing, but less profitable, product lines, such Bolthouse Farms juices.
Gross profit in the current fiscal year could be down about $380 million compared with fiscal 2008, according to Athlos Research L.L.C. food analyst Jonathan P. Feeney.
"An improved topline mix has come at the expense of lower returns," Feeney said.