Campbell Soup (NYSE:CPB) reported earnings that came in ahead of consensus, but the stock price still took a tumble on weak guidance. Shares fell nearly 5% after the earnings announcement, as the company reported $2 billion in revenue. This was flat from the same quarter last year. Sales of soups were weaker than expected and could be a sign of more problems to come.

The company lowered its full-year sales guidance to growth of around 3% compared to the previous expectation of 4% to 5%. Earnings per share were guided to the lower end of previous guidance to between $2.53 and $2.58 per share.

Trying to hedge the sales decline
Campbell is trying to cut costs by shutting down two plants and slashing its headcount by 700 people. The real problem is that consumers don't seem to particularly fancy the company's new soup products. Increased promotional activity doesn't appear to be a long-term solution, and the latest results show that the company still has a long way to go in turning around its soup and beverage business in the U.S.

But the beauty of food companies is that they have a business model that is stable, given people have to eat despite the economic conditions. This is why performance tends to hold up during economic downturns. The flip side is that they rarely see strong growth when the economy is rebounding. Campbell has been struggling in the aftermath of the 2008 financial crisis, and profits from continuing operations have declined from $736 million in 2009 to $680 million last year. Part of this decline could well be at the hand of fast-growing organic foods companies, such as Hain Celestial (NASDAQ:HAIN).

What the future has in store
The company has been introducing new flavors of soups; investors had expected the harsh winter weather to boost soup sales, but this was not the case. Overall, the lack of growth for Campbell has been disappointing, particularly because the company has been repositioning itself to take advantage of the economic recovery. It has been trying to focus on its core business of domestic soups and simple meals. In addition, the company has been trying to gain exposure in international markets and the healthy beverage space. This includes its 2012 Bolthouse Farms acquisition.

Campbell still has a dominant position in the "wet soups" market. Its market share is twice that of all the other branded soup companies and four times that of all the other private labels. The soup market is not particularly volatile, but diversification will help provide the company with growth prospects in other food products. Though the company is synonymous with soup, it does have plenty of other products to offer.

Why Campbell could continue to see weakness
One major reason appears to be shifting preferences among consumers in the way we think about food. Though Campbell is a household name and a staple in American kitchens, companies like Whole Foods Market are offering their own attractive private-label brands and taking away market share. In turn, this is forcing Campbell to compete on price rather than quality and to look for acquisitions for diversification, which is an expensive method of finding growth.

Hain Celestial is capitalizing on the natural and organic food craze. Shares of Hain Celestial are up more than 32% for the last 12 months. The company has met or beat earnings estimates in each of the last four quarters. Just last month it acquired Rudi's Organic Bakery. This gives Hain Celestial a greater presence in the bread market, where Rudi's offers organic buns, tortillas, and bagels. Analysts expect earnings to grow by 17% in fiscal 2015 (ended in June) from fiscal 2014.

Mondelez International (NASDAQ:MDLZ) is another foods company that's performing quite well. Shares are up 20% over the last 12 months. It's holding steady since the company has much more international exposure. More than 80% of revenue is generated outside of North America. It generates 15% of revenue from Latin America and 14% from Asia Pacific, both of which are fast-growing emerging markets. Only 23% of Campbell's sales were generated outside of the U.S. last year, which was primarily from Canada and Australia.

How shares stack up
Campbell still trades at a P/E ratio of 17.2 based on next year's earnings estimates. Using Wall Street's earnings growth rate for the next five years, Campbell's P/E-to-growth (PEG) ratio is a very high 4.5. Campbell also pays a 2.8% dividend yield.

Hain Celestial trades at a forward P/E of 25 and has a PEG ratio of 1.8. It also doesn't pay a dividend. Meanwhile, Mondelez trades at a forward P/E ratio of 18.9 and has the lowest PEG ratio of the three at 1.5. Its dividend yield is a mere 1.5%, but its dividend payment is only a 28% payout of earnings.

Bottom line
The soups business appears to be a tough industry for the time being. Investors are opting for healthier options, which could continue to put downward pressure on Campbell. Investors looking to play the food industry will likely find better investments in companies with more exposure to faster growing markets, such as organics or emerging markets.