Campbell’s recently announced the immediate step down of its Chief Executive Officer (CEO) Denise Morrison, a position she held since 2011. Experts attribute her departure to a lack of response to the market’s shift from price-driven to health-driven.
“Today’s food manufacturers cannot rest on the laurels of legacy labels and cheap prices,” An Faith, of AFS advises. “They need to turn on a dime to the ever-changing needs of today’s consumers, which right now, is all about healthy, clean labels.”
The market share of Campbell’s iconic soup line has been recording declines under Morrison’s leadership, even with its long-standing shelf dominance and the former CEO’s recent efforts on fresh and refrigerated foods. In fact, Specialty Food Association President Phil Kafarakis, says her advocacy for fresh and refrigerated foods is why Campbell’s leaders took their eye off the ball and “lost their way.”
“Selling older brands that have been a drag on sales and setting the fresh business aside should be priorities of the new management team,” Kafarakis noted in a recent Market Watch article. “They are going to be forced to decide whether to sell brands and what business they are going to be.”
Currently, Campbell’s shares are down 50 percent from its 2016 high of $65 per share to $34 now. In addition to the food manufacturer’s recent series of profit margin draining moves, experts attribute the brand’s collapse to its misalignment with today’s changing market. Campbell’s soups, V8 juices, and SpaghettiOs are among the many brands out of sync with the way millennials eat, and they do not support aging consumers’ demand for healthy eating, reports CNBC. And like all food manufacturers, shipping and retailer costs add pressure.
This is why consumer goods companies like Campbells must continually compete with smaller, niche market brands to retain its shelf space, say industry players.
“Campbell’s challenges are similar to those burdening the rest of the industry, which has faced the proliferation of niche, smaller brands and private-label products that have been chipping away at shelf space long dominated by Big Food,” Market Watch notes.
Campbell’s took the consumer for granted, experts add.
“A big piece of this is the fact that consumer trends and tastes are really shifting,” comments Bloomberg’s Abigail Doolittle. She notes that some of the industry experts she spoke to suggest a focus on new labels and packaging, and the incorporation of paper box packaging like many niche brands use.
Morrison’s story is among many leadership shake-ups in the rapidly-changing packaged food industry. Her stepping down marks the tenth CEO switch up since 2017 and the 28th since 2010, tallies JP Morgan.
This parade of departures underscores the myriad of challenges grocery store staples face today: Growth in the face of upstart rivals, rapidly changing trends, large-scale slower-paced corporate cultures and legacy businesses, and a slowing packaged food company market, according to CNBC.