Campbell to Cut Costs As It Deals with 'Big Food' Woes
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Campbell Soup Co. on Wednesday unveiled a major new cost-cutting initiative as it battles what CEO Denise Morrison called a “a mounting distrust of so-called Big Food.”
The soup, snacks, meals and beverage marketer will target $200 million in annual cost savings over three years, representing 2%-3% of its annual sales. The savings will come through a variety of means, including eliminating “excess layers of management,” while adopting a “zero-based-budgeting” approach, according to the company. The budgeting method, which is emerging as a popular tool for struggling food companies, involves making departments justify all of their expenses every year.
The announcement, which came at this week’s Consumer Analyst Group of New York meeting in Florida, follows Campbell’s move late last month to reorganize into three divisions. The new structure seems aimed at pouring profits from the company’s sluggish, but high-margin shelf stable soup and meals business into its faster-growing fresh food brands sold at the store perimeter. Last week, the company lowered its 2015 full-year sales and earnings guidance.
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