The Campbell Soup Co. is struggling to rebound after it reported Friday that quarterly sales had declined across its beverage portfolio. The company is particularly focused on reinvigorating sales of its Bolthouse Farms Protein PLUS line following a tumultuous recall last June.
Speaking to investors, Campbell CEO Denise Morrison said before reports of product spoilage prompted a voluntary recall of 3.8 million Bolthouse Farms Protein PLUS and Mocha Cappuccino products, the line held a 47 percent share of the market for super-premium protein beverages. Although Protein PLUS is back on the market, Campbell has yet to bring production back to pre-recall levels. Campbell has added an additional production line to its Bakersfield, Calif. plant to increase capacity. It will be operational in April and the company is seeking more ways to up production. Meanwhile, Morrison said Campbell recently identified a suitable co-packer which will significantly increase capacity by the summer.
“While we’re selling everything we make, we have insufficient capacity to fulfill merchandising demand across the full range of our beverages,” Morrison said. “Our plan is to relaunch Protein PLUS merchandising in the fourth quarter of fiscal [year] 2017 when we expect to have sufficient supplies.”
Although Campbell does not expect its beverage business to see growth until the fourth quarter, the company is planning an expansion of Bolthouse Farms’ 1915 organic, cold-pressed line of juices and nut milks. Also on the agenda is the launch of a new line of plant-based protein milks. Bolthouse Farms Plant Protein Milk will be positioned as an alternative to almond milk and include original, unsweetened, vanilla, and chocolate flavor varieties. The line will debut later this year.
Net sales and organic growth rate of the company’s Campbell Fresh division, which includes the Bolthouse Farms brand and makes up 12 percent of total revenue, fell by 8 percent over the last quarter. The division was also hurt by a slower than expected recovery for sales of its carrot products.
Campbell’s American Simple Meals and Beverages division, which includes V8 products and makes up more than $1.2 billion in net sales and organic growth, also declined, by 1 percent.
“The shelf-stable beverage category remains sluggish and our portfolio continues to be challenged,” Morrison said. “As I’ve previously stated, V8 will not grow this year.”
CFO Anthony DiSilvestro told investors declines in V8 and Campbell Fresh were the primary drivers for poor quarterly sales performance, although U.S. soup sales and Pepperidge Farms snacks showed positive growth as a highlight of the report.