Weeks of speculation were put to rest earlier this week with the confirmation that Campbell Soup Co. is freshening up its brand portfolio, literally, with the billion-dollar acquisition baby carrot pioneer Bolthouse Farms, which also markets a line of premium refrigerated beverages and salad dressings.
The move marks a whole new era for both brands, but more so for Campbell’s, whose existing V8 beverage segment represents a growing base of business for the Camden, N.J. company, which plans to operate Bolthouse as a separate unit. To be sure, the seasoned expertise that Bolthouse’s leadership can bring -- coupled with its existing family of fresh-cut carrots, premium juices and refrigerated salad dressings widely distributed in supermarkets across the country -- is an especially wise and well-timed way for the stalwart soup maker to diversify its portfolio into the all-important and rapidly growing packaged fresh foods domain.
Indeed, from berries to bagged salads and beyond, national and international brands have made a name for themselves in just about every fresh category imaginable as more consumers eschew nutritionally challenged foods in favor of convenient, portable, value-added fresh produce that's increasingly available in multiple sizes and formats.
And though the marketing budgets for the vast majority of fresh produce brands lag considerably with their CPG counterparts, Bolthouse was a driving force behind a clever $25 million campaign that debuted in September 2010, to position baby carrots as the “ultimate junk food,” by playfully mocking the memorable marketing tactics of popular snack food brand via a variety of media vehicles. Armed with a tagline urging the public to “Eat ’em Like Junk Food,” Bolthouse’s brilliant effort also unleashed cool packaging designs to mimic that of carrots’ greasier snack brethren.
Looking ahead to what comes next for the new partners, the $1.55 billion deal, which is slated to close in August, presents a bushel of fresh opportunities for Campbell, as well as its president and CEO, Denise Morrison, whose potentially game-changing move – which will likely become one of the most significant during her tenure at the top of the company that she was named to lead a little less than a year ago – may well set the stage for other CPG food and beverage companies to jump into the healthy, fresh food domain.
Describing the acquisition as “a great strategic fit,” Morrison relayed confidence in Bolthouse’s “business platforms, capabilities and culture [that] are well aligned with the core growth strategies we announced last year. Its strong position in the high-growth packaged fresh category complements our chilled soup business in North America, and offers exciting opportunities for expansion into adjacent packaged fresh segments that respond directly to powerful consumer trends.”
Meanwhile, with its roots dating back almost a century when the family of the same name began commercial vegetable farming in Michigan, annual earnings for the the Bakersfield, Calif.-based Bolthouse are estimated to exceed more than $150 million, roughly two-thirds of which are reportedly generated by carrots.
As a separate business unit under Campbell’s umbrella, members of Bolthouse’s senior management team, including president and CEO Jeff Dunn, will remain with the company. Dunn has built a strong team with deep expertise in beverage and consumer packaged goods, and will report directly to Morrison.
For his part, Dunn is evidently pumped about Bolthouse’s new owners in view of props he gives to Campbell’s “beloved brands [and] 140-plus year history of providing high-quality foods and beverages to consumers.”
We wish the new partners much success as their venture unfolds in the months ahead and as always, we’ll be watching closely from the sidelines while keeping tabs on the evolutionary developments taking place in the dynamic and ever-changing food industry.