Campbell Soup Vows to Hold Line on Marketing

http://adage.com/article/news/campbell-soup-vows-hold-line-marketing-economy/229611/

Despite a weakening economy, Campbell Soup Co. is not backing off its plans to plow more money into innovation and marketing and cut back on heavy discounting.

The company, which is trying to reverse sluggish soup trends by putting a new focus on taste, on a quarterly earnings call Friday reaffirmed its plans to put an additional $100 million into marketing and innovation in fiscal year 2012, which began Aug. 1. "The recovery has not progressed at the pace or intensity consumers had hoped for," said CEO Denise Morrison. But "in this environment it is critical for us to deliver meaningful innovation focused on consumer needs and to differentiate our brands through effective marketing that emphasizes our products' tangible benefits and value relative to the competition."

Campbell, like other food marketers, had been engaging in heavy promotional activity, but found that discounting has failed to raise volume as planned. For the fiscal year ending July 31, Campbell sales across all of its businesses increased by just 1%, while its U.S. simple meals sales -- which include soup -- dropped by 6%, the company reported. Net income for the year dropped 5% to $805 million, and fourth-quarter net earnings fell to $100 million from $113 million.