CAMDEN, N.J. — Slated to launch from the Campbell Soup Co. later this year is a range of non-dairy, plant-based milk with 10 grams of pea protein per serving. Bolthouse Farms Plant Protein Milk varieties include vanilla, unsweetened, original and chocolate. The product line represents the Camden-based company’s foray into the burgeoning alternative milk category, which is expected to double in size by 2020 to reach $4 billion in sales, said Jeff Dunn, president of the Campbell Fresh division.
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| Jeff Dunn, president of Campbell Soup's Campbell Fresh division |
“Unlike other alternative milks it is made with 100% pea protein and has 10 grams of protein per serving, 2 more than traditional milk and 9 grams more than almond milk,” Mr. Dunn said during a presentation at the company’s Institutional Investor Day on July 20. “With this highly differentiated product we have already received promising interest from dairy buyers across the country and are poised to make a strong option for consumers who are moving toward plant-based diets and away from animal proteins.”
The Campbell Fresh division includes refrigerated product categories merchandised in the produce and deli sections of grocery stores, with such products as fresh carrots, beverages, salad dressing, salsa, hummus, dips, deli chips and fresh soups under the brands Bolthouse Farms and Garden Fresh Gourmet, which Campbell Soup acquired last year.
As part of efforts to expand Campbell Fresh into new spaces, the company is adopting an entrepreneurial approach to innovation, Mr. Dunn said.
“If you step up to a 30,000 foot view, what we built is an ecosystem designed to marry our internal capabilities with those of external partners who are best in class at taking great ideas and turning them into great businesses,” he said. “Through our dynamic learning loops we assess opportunities and put them on the best innovation pathway to help ideas flourish and grow at a rapid pace. With this approach we believe we can be more nimble and, importantly, place more bets on the table to significantly increase the success rate of these new platform ideas. Our long-term innovation approach is designed with a startup mentality driving more ideas into the marketplace with the ability to move quickly and pivot quickly.”
Within this approach, Campbell Fresh is focusing on three types of platform innovation: bringing current center-store categories to the perimeter, reinventing traditional perimeter categories that need renovation, and finding new business models and channel formats to meet consumer needs directly where they shop and eat, Mr. Dunn said.
“This team has been built for robust idea generation, quick vetting and importantly rapid pivots to live in market incubations as quickly as possible,” he said.
Capturing new sources of “breakthrough innovation” is one of several priorities for the Campbell Fresh division in the coming year. The company also is focused on stabilizing and maintaining its core carrot business, which was negatively impacted by poor growing conditions last year, and leveraging its consumer packaged goods portfolio for sustained growth.
“Research has shown that twice as many millennials versus non-millennials only shop the perimeter of the grocery store,” Mr. Dunn said. “This new behavior gives us great confidence the development of the C-Fresh division and our investment in more packaged fresh categories will continue to pay dividends into the future as more consumers adopt this lifestyle.”
Campbell Fresh is expanding its portfolio of premium beverages with the introduction of new Bolthouse Farms smoothies and protein-plus varieties and 1915 plant-based protein drinks and organic smoothies. On the deli side, new flavors and formats of hummus and salsa will debut from the Garden Fresh Gourmet business.
“Similar to Bolthouse Farms in produce, our vision is to build the Garden Fresh Gourmet brand portfolio so it can meet consumer needs for various occasions across snacking and simple meals,” Mr. Dunn said. “We will continue to build out the Garden Fresh brand across multiple categories in deli but we will also introduce new brands … similar to what we did with 1915 in beverages.”
Coming this fall are two branded refrigerated soup offerings, including a conventional lineup under the Garden Fresh Gourmet brand and an “ultra-premium” organic range called Souplicity, which the company plans to test in the natural and organic channel.
“Customer reception to Garden Fresh Gourmet soups has been very positive, and we’ve already received commitments from several large key customers beyond our current private label customers,” Mr. Dunn said. “This new branded platform has the potential to not only take our fresh soup business to new heights but also to expand awareness and trial of the Garden Fresh brand as we drive more scale across more deli categories.”
Challenges affecting the company’s carrot business, including weather, a customer moving to a second supplier, and a soft Japanese economy, hurt the division’s results in the recent quarter. Segment operating earnings fell 28% to $13 million, and, excluding the acquisition of Garden Fresh Gourmet, sales declined 4% in the third quarter ended May 1. A recall in June of Bolthouse Farms protein beverages due to spoilage initiated is expected to further hamper performance for the full year.
“So, needless to say we have had some unanticipated challenges in the back half, but we are confident about the future because our mission hasn’t changed and the opportunities that that mission provides are significant as we look forward,” Mr. Dunn said. “The C-Fresh division fully supports and contributes to the company’s purpose of real food that matters for life’s moments by inspiring the fresh revolution. This mission is the cornerstone of everything we do and our strategy comes to life by making fresher foods more accessible, available, affordable and most importantly desirable across a range of fast-growing categories. Because ultimately, as you know, there is a shift happening; fresh is accelerating.”
