CAMDEN, NJ. — A premium pasta sauce brand might become an acquisition target for Campbell Soup Co. even though it owns the Prego brand.
“I think it's fair to say that the more super premium subsegment has really been driving outsized growth (in the pasta sauce category), and so I continue to see that as an opportunity,” said Mark A. Clouse, president and chief executive officer, March 14 at the Bank of America Consumer & Retail Conference. “If you think about the gaps in our portfolio, that would be very high up the list.”
He said a premium pasta sauce might not compete with Prego for consumer dollars.
“As strange as it may sound, there's not really a high degree of interaction between the more premium space and the mainstream pasta sauce,” Mr. Clouse said.
Camden-based Campbell Soup could expand in Mexican sauces as well.
“So I do think we’re keeping our eyes open, and we have a balance sheet that’s probably as strong as anybody,” he said. “Our debt level is 2.5x right? So I think we’re in a great position to execute something if the right option comes along — nothing major, giant, but complementary.”
Pricing actions could come in soup. Older consumers on a fixed income tend to buy private label soup, Mr. Clouse said.
“They don’t want to not buy Campbell’s, but if they have $1.25 to spend on a can of soup, and we’re $1.45, then they'll rotate out,” he said.
Yet, he asked, would those consumers pay $1.35?