As it strives to reinvent itself and increase its footprint, Campbell Soup Co., says it has invested $125 million in venture capital. CEO Denise Morrison said her company is making significant efforts to find and fund food startups as it tries to branch out into new areas for growth. An Ad Age report says she discussed the initiative at the Consumer Analyst Group of New York (CAGNY) conference in Boca Raton, Fla.
Camden, N.J.-based Campbell has acquired several food businesses to expand beyond its soup heritage, and will be the sole limited partner in a new fund called Acre Venture Partners. Campbell is contributing $125 million to the project. "There's a massive influx of venture capital aimed at disrupting the food ecosystem, flowing from traditional VC firms and from funds managed by large food companies," Morrison explained. "Since 2010, approximately 400 food startups have received more than $6 billion in funding."
Campbell has invested in some early stage startups, but believes "a more strategic and methodical approach" is needed, according to Morrison who continues to revamp Campbell's portfolio to handle the variety of "seismic shifts" she discussed at the CAGNY meeting. These shifts range from economic concerns including the decline of the American middle class to the burgeoning diversity of young consumers, the proliferation of digital technology and consumers' desire for healthier and fresher food.
Even as the company has been updating its product lineup, it expects its sales this fiscal year to be down 1 percent to flat, according to the Ad Age report. Still, that would be an improvement from a 2-percent decline in fiscal 2015, which stemmed in part from having one less week than fiscal 2014.
Roughly 34 percent of Campbell's sales come from its flagship soup line, down from 40 percent in 2011, the year Morrison took the CEO post at the company. Campbell has added brands such as Bolthouse Farms, Plum Organics and Garden Fresh Gourmet to diversify its lineup, which already included products such as Pepperidge Farm, Prego and V8. But soup still prevails in the business, with a reported 34 percent of sales in 2015, followed by cookies and other snacks at 31 percent, simple meals at 21 percent and beverages at 14 percent.
Campbell noted that while Acre Venture Partners, a Delaware limited partnership, will be independent and managed by outside partners, a Campbell subsidiary will be the sole limited partner in Acre Ventures. In addition, Jeff Dunn, president of Campbell Fresh, is to join Acre's investment committee representing Campbell, the company said.