CAMDEN, NJ. — Soup sales began to retreat closer to pre-pandemic levels late in the 2021 fiscal year ended Aug. 1 for Campbell Soup Co. To energize soup sales in fiscal 2022, the Camden-based company has innovation plans in place for the brands Pacific, Well Yes! and Campbell’s.
Soup sales for Campbell Soup in the United States decreased 21% in the fourth quarter when compared to the previous year’s fourth quarter, which saw a 52% increase due to at-home restrictions related to COVID-19. Volumes declined in condensed soups, ready-to-serve soups and broths. The additional week in the fourth quarter of 2020 had a seven-point impact.
Yet Campbell Soup in the quarter gained nearly two points of market share in US soup, said Mark Clouse, president and chief executive officer, in a Sept. 1 earnings call. He also gave details on new product plans for fiscal 2022.
“Our new items focus on new occasions and relevant wellness trends,” Mr. Clouse said. “Expanding on the relaunch of our better-for-you Well Yes! brand is the launch of Well Yes! Power Bowls with five unique varieties for both lunch and snack occasions.
“We have also expanded our successful Slow Kettle Crunch innovation with four varieties of Campbell's Red & White Crunch, including our iconic Classic Tomato Soup with Goldfish toppings.”
The Pacific Foods business owned by Campbell Soup Co. has added more plant-based products, including creamy oat milk soups and creamy plant-based protein broths. Chunky Spicy Chicken Noodle is a new Campbell’s variety, and Campbell’s condensed soup is getting a refresh, Mr. Clouse said.
“We are contemporizing the brand to better match our growing millennial consumer base while improving the product and its shop-ability as we continue to support our positioning as a starting point for delicious meals,” Mr. Clouse said. “We also have continued our journey of simplifying our ingredient lines and improving quality.
“It's always tricky when looking to evolve such an iconic design and product, but our new graphics and improved ingredient lines strike the right balance and have been met with a very positive customer and consumer response.”
Fiscal-year net earnings attributable to Campbell Soup Co. were $1 billion, or $3.31 per share on the common stock, which were down 38% from $1.63 billion, or $5.39 per share, in the previous fiscal year. Net sales of $8.48 billion were down 2% from $8.69 billion. The 2021 fiscal year included one additional week, which was estimated at 2% in net sales. Compared to fiscal 2019, net sales in fiscal 2021 increased 5%.
In the Meals and Beverages unit, net sales dropped 2% to $4.53 billion from $4.65 billion. Organic net sales decreased 1%. Growth in V8 beverages partially offset declines in foodservice.
In the fourth quarter net sales fell 16% to $851 million from $1.02 billion in Meals and Beverages. Organic net sales dropped 9%, primarily due to declines across US retail products, including US Soup, Prego pasta sauces and Pace Mexican sauces. Compared to the fourth quarter of fiscal 2019, organic net sales increased 10% in Meals and Beverages. On a two-year basis, ready-to-serve soup consumption grew 21%, led by Chunky, Slow Kettle and Well Yes!
In the Snacks unit, net sales over the fiscal year were down 2% at $3.94 billion, which compared with $4.05 billion in the previous fiscal year. Declines in Lance sandwich crackers and in partner brands within the Snyder’s-Lance portfolio offset gains in the salty snacks portfolio, including Late July snacks and Snack Factory Pretzel Crisps. In the fourth quarter, net sales dipped 6% in Snacks to $1.02 billion from $1.09 billion.
In fourth quarter companywide, net earnings attributable to Campbell Soup Co. were $288 million, or 95¢ per share, which more than tripled net earnings of $86 million, or 28¢ per share, in the previous year’s fourth quarter. Net sales of $1.87 billion were down 11% from $2.11 billion. Organic net sales decreased 4%, cycling elevated demand and partial retailer inventory recovery in the prior year’s fourth quarter., Compared to the fourth quarter of fiscal 2019, net sales increased 5%.
Campbell Soup Co. executives expect core inflation of high single-digit percentages in fiscal 2022. The impact will be more pronounced in the second half of the year. Positive net price realization, supply chain productivity improvements and cost-savings initiatives will help the company manage inflationary headwinds.
Net sales, in 2022 guidance, are expected to be down 2% to flat when compared to 2021. Organic sales are expected to be in a range of down 1% to up 1%. Adjusted EPS is forecast to be in a range of $2.75 to $2.85, which would be down 8% to 4% from fiscal 2021.