What happened first? Was it the Pillsbury dough boy shedding pounds or Betty Crocker getting a makeover? Whatever, the Campbell Soup
Slowly, the soup maker has been putting itself on a diet, kicking to the curb brands that don't fit in with its new fresh and fit image. The latest to be put on the auction block is Godiva Chocolatier, the luxury brand it has owned for a surprising four decades. As with a former cigarette smoker, there's no more ardent advocate for living right than someone who has kicked the habit of poor eating. Campbell's is one such advocate these days, but it makes you wonder when the CEO experienced his deathbed conversion.
As the country has grown more health-conscious, it made good marketing sense to offer more healthy foods like Campbell's lower-sodium soups. Even its Pepperidge Farm line of whole grain breads fits in with a nation needing to eat more wholesome fiber. Campbell's V8 juice drink has always been a healthy alternative to sodas, even if it did hook up with Coca-Cola
Yet it was just last year that Campbell's was crowing about its line of "Indulgent" Godiva drinks, a "decadent" coffee beverage undoubtedly positioned to take on Starbucks
It is true the company has come out with a line of 100-calorie snacks, but that follows Kraft
Simply put, fat's no longer where it's at for Campbell's. In its latest quarter, earnings rose 31% to $217 million on the strength of an 8% jump in sales, primarily from soups and the V8 beverages. Chocolate sales have risen by about only 5% annually in recent years, though they reached double digits in North America. Part of that success, though, was achieved through new products -- you guessed it, sugar-free confections, but also a reintroduction of truffles, not exactly a dietetic delight.
Given its $500 million in annual sales, and with analysts estimating a possible price tag of $750 million to $1 billion or more, that's a price-to-sales ratio of just 2, which is in line with Hershey
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