FOOD INDUSTRY Campbell still works to heat up soup sales

Campbell looks for answers as soup sales fall.
DOW JONES NEWSWIRES
NEW YORK -- In Maurice Sendak's "Chicken Soup With Rice," a little boy recounts the different ways he enjoys his favorite soup every month.
Unfortunately for Campbell Soup Co., there aren't many soup fans with such dedication. Most consumers wait until chilly weather makes them yearn for a steamy bowl before they head to the soup aisle at the grocery store.
This year, when some consumers get to the store, they will find the aisle has gotten a face-lift. Campbell is redesigning shelves at 13,000 stores, hoping to make its soups easier to find.
The new look is just one of the efforts Campbell is making to stop declining sales of their red-and-white label condensed soup. Even with a diversification into crackers and chocolate, about 55 percent of its sales still come from soup.
Three-year program
The Camden, N.J., company is in the midst of a three-year revitalization program, announced in July 2001. With some of the overhaul already completed, one analyst recently told investors it's time to get in while Campbell shares are still cheap. But his view is hardly in the majority.
Most Wall Street analysts expect the stock to perform about as well as its peers and see it fully valued in the low $20s.
Shares of Campbell finished at $24.72 Wednesday on the New York Stock Exchange, up 68 cents, or 2.8 percent.
Concerns linger about the company's timing and execution. Campbell is attempting to put in changes to its condensed soup line during its busiest selling period.
During the first quarter ended Oct. 27, Campbell posted a 6 percent decline in worldwide soup volume. The company was up against some tough comparisons after Americans stocked their pantries after Sept. 11. However, even compared with the company's results two years ago, U.S. soup volume was down 2 percent, said William Leach, a Banc of America Securities analyst.
Improved value
To avoid further sales deterioration, Campbell wants to improve the value for the price. It has changed the texture of its condensed cream soups. Now, starting with its vegetable soup line, it is rolling out condensed soups that take advantage of a new technology to improve the soup's flavor and appearance. The cans will appear in stores by early December. Later, Campbell plans to sell its condensed soups in easy-open cans.
The company hasn't had a head for its soup division since August -- and the vacancy worries some investors and analysts.
Campbell President and Chief Executive Douglas Conant recently told investors it shouldn't. "We have a company focused on soup, not just an individual, and I feel very good about the team that's managing it," he said.
Campbell said in August that Andrew Hughson, president of North American Soup, was leaving the company. Larry McWilliams was appointed to lead the division in the interim.
New overseer
Conant said that oversight for North American soups has shifted to McWilliams, Campbell's chief customer officer, while the company's search for a permanent replacement continues.