Can Campbell’s Successfully Execute a Reset, and What Should That Look Like?
Walter_Cicchetti/Depositphotos.com
There’s no doubt about it: Campbell’s has faced a very difficult year, capped off by a very challenging Q4, as Food Business News senior editor Jeff Gelski reported.
Net income for the fiscal year concluding on Aug. 2 notched $403 million, tumbling a whopping 33% from the $602 million recorded for FY 2025.
“Mick Beekhuizen, president and chief executive officer of Camden-based Campbell’s Co., acknowledged the company’s performance ‘is not where it needs to be,’ adding ‘we are taking decisive actions to improve it,’” Gelski wrote.
Other data points pulled from the report included:
The quarterly dividend is getting slashed: Campbell’s is set to significantly reduce its quarterly dividend to 25 cents per share, or $1 annualized. This represents a 36% trimming from the prior quarterly dividend of 39 cents per share, or $1.56 annualized.
The fourth quarter hurt Campbell’s: Q4 saw a loss of $69 million versus net income of $145 million in the year-prior period. Net sales tumbled by 8% -- from $2.32 billion in Q4 2025 to $2.14 billion in the fourth quarter of this year – and organic sales dipped 1%.
Campbell’s also sees trouble ahead: The company anticipates a decline in net sales of between 2%-4% in FY 2027, with EPS projected to fall by between 17%-24% versus fiscal year 2026. Raw material and packaging inflation is expected to register between 5% and 6%.
Cost savings program in the works: Campbell’s is also slimming its operational footprint as part of the correction effort, beginning in FY 2027. The $500 million program will involve existing initiatives, as well as an overhead savings strategy and an enterprise spend optimization effort. Plant closures in Hyannis, Massachusetts and Jeffersonville, Indiana are already taking place, and a ~13% overall cut in workforce is ongoing, leaning on a mixture of voluntary early retirement programs and involuntary reductions.
Campbell's To Reset or Reorient its Marketing Efforts
And according Sarah Mahoney, writing for MediaPost, Campbell’s is also resetting its marketing campaigns to focus more on the brand’s existing winners, rather than taking the previous balanced approach. The Campbell’s brand, in addition to Rao’s, Goldfish, and Pepperidge Farm will be more heavily emphasized – and even the methodology itself is changing to meet the times.
“The shift toward digital is intensifying, and Beekhuizen said 85% of the company’s working media budget will go to social, influencer and e-commerce channels, as well as newer AI-enabled platforms,” Mahoney stated, pivoting to quote the company’s CEO.
“Let me be clear: we are not walking away from any business or brand. However, our marketing investments must work harder for us,” Beekhuizen said.
Mahoney then cited Morningstar analyst Erin Lash on the subject of Campbell’s current and future fortunes:
“Campbell's has fallen victim to a challenging macro and competitive environment,” Lash stated, noting that the headwinds facing the company in the snacks category is most pressing, as “the firm lacks the scale and negotiating heft of larger rivals like PepsiCo.”
“We don't expect Campbell's to siphon brand spending to boost profitability and cash flow,” Lash added, highlighting that both Rao’s and Goldfish were showing signs of relative strength despite present challenges. “Rather, we expect investments in research, development, and marketing to average 5% of sales over the next decade, near historic levels and generally consistent with peers.”
Other questions for consideration:
Do you believe Campbell's will successfully turn its business around in the near-term, based on its stated efforts? Why or why not? What's missing?
What lessons should Campbell's be taking away from its most recent misfires and decline in the market? How much blame rests on macroeconomic factors beyond its control, and which problems are its own to tackle?
If you were to advise Campbell's on one or two major shake-ups to its model, what would you suggest?
Discussion Thread3
Most mainstream CPG firms in the US are seeing volumes pressured because inflation has either driven consumers to cut back or to trade into other segments like smaller brands or private label. Campbell's is no exception and the solution is to strengthen the appeal of its products to compete better with insurgents. That isn't easy when the portfolio is so large and complex - which leads to a conclusion that divestment of weaker brands may be necessary to get the business back on track.
The CEO is right to focus marketing on Campbell's, Rao's, Goldfish, and Pepperidge Farm, but the CEO's pledge to "not walk away from any business or brand" undermines that logic. Winners do not thrive by subsidizing the portfolio's middleweights. Porter's most durable insight is that strategy requires trade-offs. A reset that protects everything is not a strategy; it is a holding pattern. The $500 million cost program and 13% workforce reduction buy time, not identity. Campbell's real reset requires strategic honesty about which brands have a defensible future and which are consuming oxygen. Marketing investment alone will not close the gap with foothold competitors who own the specific occasions Campbell's legacy portfolio only accidentally occupied.
That we don't need to be told who Campbell's is - the "Camden based" was more of a confirmation than a clew - is both the brand's strength...and weakness: it's a legacy brand that is readily recognized, but a lot of that recognition comes in the form of negatives (unhealthy, old-fashioned, etc.) That's not something that's going to be "tuned around" in a quarter, a year or even several years. ( I won't say "the timeline is "never"...but I doubt managment would find much cheer with that concession.)