Campbell's Commitment to Brand Spending Should Ensure Its Competitive Edge Remains Intact

CEO Mark Clouse’s tenure has been fraught with change since joining Campbell Soup in January 2019. The company parted ways with its fresh business and the bulk of its international operations while working to steady its core meals, beverages, and snacking arms. While the global pandemic and inflation have had an impact, we don’t think recent performance (6% organic sales growth on a two-year stacked basis) is a byproduct of stepped-up consumer stockups of essential fare and recent price hikes to dull inflation's sting. Rather, we think Campbell’s strategic focus has set it on a sound course, leveraging technology, data insights, and artificial intelligence to bring consumer-valued products to market in a timely fashion while reducing complexity, investing in automation, and optimizing its supply chain and manufacturing network. In addition, we expect Campbell will continue to pursue inoragnic opportunities within its core strengths to unlock fresh consumer insights and complement its mix.