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Campbell Soup to launch Prego, Chunky new products

CAMDEN, NJ. — Supply chain issues at Campbell Soup Co. eased in the third quarter ended May 1, which will allow the company to turn attention to new product launches.

“Innovation on our business is critical, and now with supply improving, we can focus on rolling out a robust pipeline of new products,” said Mark A. Clouse, president and chief executive officer, in a June 8 earnings call. “Starting with a new innovative approach to home quick-scratch meals, we’ll be launching our Campbell’s Flavorup! line. This brings a versatile concentrated flavor sauce that will enable a variety of recipes, and the consumer can control flavor intensity and portions, a quick meal for one or a convenient family dinner.”

Prego will expand its lineup in fiscal 2023.

“Younger consumers especially are seeking new specialty flavors and ways to enhance their at-home meals,” Mr. Clouse said. “Prego’s new items will offer bold flavors to meet the growing need to bring greater variety to the in-home Italian sauce experience.”

Chunky Spicy will expand its soup lineup in fiscal 2023 as well. An Old Bay seasoned variety of clam chowder is one planned new item. Pacific Foods ready-to-serve soups and chilis will launch in the fourth quarter of the current fiscal year.

Net earnings attributable to Campbell Soup Co. in the third quarter were $188 million, equal to 62¢ per share on the common stock, which was up 18% from $160 million, or 55¢ per share, in the previous year’s third quarter.

Net sales increased 7%to $2.13 billion from $1.98 billion. Organic sales, which exclude the impact from the sale of the Plum baby food and snacks business, were up 9%. Inflation-driven pricing and sales allowances of 11% more than offset volume declines of 3%.

Camden-based Campbell Soup Co. increased its full-year guidance. The company now expects net sales in the range of flat to up 1%, which compares with previous guidance in the range of down 2% to flat, and organic net sales to rise 1% to 2%, which compares with previous guidance in the range of down 1% to up 1%.

“Over the last several years, we’ve been navigating substantial headwinds, including the ongoing impact of COVID-19, labor and supply pressures, significant transformation and a rising level of inflation,” Mr. Clouse said. “The team has done a great job of controlling the control-ables. We have improved our execution and strengthened our supply chain by increasing labor and capabilities while working with our retail partners to deploy inflation-driven pricing effectively and thoughtfully.”

In the meals and beverages segment, net sales increased 6% to $1.13 billion. Organic net sales were up 9% as US soup, foodservice and Prego pasta sauces drove the increase. Sales of US soup rose 15% due to increases in condensed soup and ready-to-serve soup.

“Overall share in condensed is up nearly two points versus three years ago prior to COVID-19, even with the most recent recovery of private label,” Mr. Clouse said. “Finally, on condensed, we are thrilled that we are retaining the younger millennials that we have added in the last three years. The share losses tend to be more concentrated in the baby boomer cohort who are a bit more price sensitive.”

Consumption in RTS soup was down in the quarter after the company prioritized the core brands Chunky and Well Yes!

In the snacks segment, net sales increased 8% to $999 million. Organic net sales also were up 8%. Sales increased in salty snacks, primarily Snyder’s of Hanover pretzels and Kettle Brand potato chips, and in cookies and crackers, primarily Goldfish crackers.

Over the nine months ended May 1, net earnings attributable to Campbell Soup Co. were $661 million, or $2.19 per share on the common stock, down 7% from $714 million, or $2.38 per share, in the same time of the previous year. Net sales were $6.58 billion, down 0.4% from $6.60 billion.