Campbell’s Closes Sovos Deal; Discusses Encouraging Signals for 2024
The focus of Campbell Soup Co.’s discussion at the 2024 Consumer & Retail Conference hosted by Bank of America was the breaking news that the company completed its acquisition of Sovos Brands after receiving Federal Trade Commission (FTC) clearance late last month.
Mark Clouse, CEO of Campbell’s, said during the conference that the length of the FTC review actually improved the economics of the deal for the company, given the continued success of Sovos recently. Clouse said Sovos’ success was “astounding” considering the environment that the food industry was operating in right now. Momentum for the brands continues to be strong — and success volume-driven, which is unique today, he added.
The $2.33-billion deal had been delayed by the FTC’s request for additional information in October. Now that the deal is closed, Sovos will join a new Distinctive Brands business unit within the Meals & Beverages division. Clouse believes the company’s positions in that division as well as its Snacks division are encouraging.
In the snacks business, Clouse pointed to improvements in category trends as hopeful for the business. He believes that consumers in the middle- to lower-income households are still fighting through a sustained period of challenging economics still, but believes that it’s a matter of when, not if, that segment of the consumer market comes back to normal.
Secondarily, the snack category was the last one to show signs of slowdown in 2023 among food categories, Clouse said, and it’s still cycling through compared to others. He is looking at the summertime as a very important and “interesting bellwether” for where snacking really sits.
Category-by-category, the stories are a little different. Pepperidge Farm Goldfish, for example, sits in a very unique space where it has been full-speed ahead. Pretzels, on the other hand, has private label and heavy competition within its category, so the pace of the recovery has been slower and requires a different type of execution to navigate through.
Clouse also clarified during the conference that there were no plans to split the company in the near future, and it will not take one inch off the gas pedal on its core soups business.
