Can Campbell Snacks' strategic moves keep it ahead in the snacks market?

Since its acquisition of Snyder’s-Lance in 2017 for $4.9bn,​​ Campbell has demonstrated a strong commitment to refining its business portfolio through a combination of strategic mergers, acquisitions and divestitures. This approach has been instrumental in the company's effort to focus on core growth areas, particularly within the thriving snacks market.

Acquisitions

In 2023, Campbell made a significant acquisition by purchasing Sovos Brands for $2.7bn. This deal represents a calculated move by Campbell to strengthen its position in the high-growth food segment, where consumer demand for authentic products is on the rise.

Sovos Brands produces a variety of premium products under several well-known brands, the most prominent being Birch Benders (specializing in keto and paleo-friendly pancake and waffle mixes),​​ Noosa (focused on a premium yogurt experience) and Rao’s Homemade and Michael Angelo’s (pasta, soup and Italian-inspired frozen meals).

Divestitures

Alongside its acquisitions, Campbell has also divested certain assets to sharpen its focus on core areas.

It recently announced it had sold its Pop Secret brand to Our Home, a New Jersey-based snack producer focused on better-for-you products, including Popchips (known for its never-fried, popped potato chips); RW Garcia (healthy crackers); Good Health (veggie sticks and chips), You Need This (plant-based snacks) and Sonoma Creamery (craft-baked cheese snacks).

Campbell’s decision to offload Pop Secret, which generated approximately $120m in net sales in fiscal 2024, is part of Campbell’s broader effort to drive growth across its more prominent brands. By shedding non-core brands like Pop Secret, Campbell is better positioned to ensure that resources are allocated to areas with the greatest potential for return on investment.

“This marks another step in our journey to strategically focus our Snacks portfolio,” said Chris Foley, executive VP and president, Campbell Snacks.

“The sale of Pop Secret will drive greater focus and accelerated growth across our Snacks division and portfolio of leading brands.”

Similarly in 2023, Campbell divested the Emerald Nuts brand,​​ another move aimed at optimizing its portfolio and at a time when Circana data showed sales in the nuts segment were sagging.

Shortly after releasing its 2019 fiscal year earnings, the soup and snack company announced it was selling UK-based Kettle Foods and Netherlands-based Yellow Chips​​ to private equity firm Valeo, in a deal valued at $80m.

These divestitures, along with the sales of Arnott’s Biscuits,​​ Kelsen Group and Bolthouse Farms in 2019, underscore Campbell’s commitment to concentrating its efforts on the North American market, where it sees the most significant opportunities for growth.

The rise of Campbell Snacks

This division has become an integral part of the Campbell Soup Company’s portfolio, housing popular brands such as Goldfish, Milano, Snyder’s of Hanover and Kettle Brand. These brands have consistently performed well, contributing significantly to Campbell’s overall revenue, particularly as consumer demand for convenient, on-the-go snack options continues to grow.

Post-pandemic, the snacks category has seen a surge in demand, driven by consumers seeking comfort and convenience. Campbell Snacks has capitalized on this trend by refining its product offerings to align with consumer preferences, particularly those related to health and wellness. This shift is evident in the company's focus on providing snacks that combine taste with high-quality, often organic ingredients, catering to a market that increasingly values health-conscious choices.

Late July, for example, offers organic snacks targeted at consumers looking for better-for-you options without sacrificing flavor. The launch of air-fried snacks under Kettle Brand​ ​is another direct response to the growing demand for healthier snack alternatives. These products are designed to offer the same satisfying crunch as traditional chips but with less fat, appealing to consumers who are mindful of their dietary choices. However, the launch did come with controversy, with a Californian resident filing a class action against Campbell Soup Company,​​ alleging it misled consumers into believing the potato chips have not seen a lick of oil.

Moreover, the division has successfully leveraged limited time offerings (LTOs) to create excitement and engage consumers. The collaboration between Goldfish and Frank's RedHot​​ is a prime example of how Campbell is using innovation to tap into the fast-growing trend for bold, adventurous flavors. Such initiatives not only drive short-term sales spikes but also strengthen brand loyalty by keeping the product lineup fresh and relevant.

Campbell Snacks is a dominant player in the US market,​​ holding a leading position in the cookie, cracker and salty snack categories. Goldfish, in particular, has become a $1bn brand, reflecting its broad appeal and the effectiveness of Campbell's marketing and innovation strategies. It's Willard production site is affectionately known as Goldfish capital and produces 50 million of the iconic cheddar-flavored crackers each day.

For fiscal 2023, the division posted net sales of around $4.5 billion, a testament to its importance to Campbell Soup Company’s overall performance (fiscal 2023 net sales of $9.4bn).

As it continues to innovate and respond to consumer trends, particularly in health and wellness, it’s well-positioned to capture further market share in the global snacks market. By concentrating on its core strengths and being proactive to market dynamics, it’s poised to continue its legacy of connecting people through the snacks they love, while delivering value to its shareholders.