As more consumers shift their grocery shopping from the center of the store toward the perimeter in search of fresh products perceived as healthier, food and beverage companies traditionally ensconced among the aisles at the heart of the store are following. Several recent episodes illustrate the challenges companies accustomed to managing a traditionally shelf-stable supply chain may face when making the transition to the perimeter.
For the Campbell Soup Co., Camden, N.J., the development of a business unit built around fresh products has been a cornerstone of future growth. The company made significant investments in Bolthouse Farms and Garden Fresh Gourmet, and those businesses along with Campbell Soup’s refrigerated soup portfolio comprise its Campbell Fresh, or C-Fresh, business unit.
In a Feb. 17 conference call with financial analysts to discuss first-quarter results, Denise Morrison, president and chief executive officer of Campbell Soup, said Campbell Fresh performed below the company’s expectations and addressed the challenges the company has faced, most notably around the perishability and fragility of fresh foods.
Specific issues driving poor financial results in Campbell Fresh include poor carrot quality, which is central to the company’s Bolthouse Farms business. Ms. Morrison said “there is no roof over the carrot fields” necessary to supply Bolthouse Farms and the company experienced record drought as well as record levels of rainfall in the period it has owned the business, both of which have affected quality.