Campbell Soup soars on corona-conomy buying shifts — now canned soup might be "sticky"
Best actor in a heating role... Cream of Mushroom. In March, we talked about how canned soup is making a comeback — Campbell's CEO was (pleasantly) shocked at a 1% sales growth driven by Millennials. Campbell's latest quarterly earnings reveal soup is still thriving:
- Campbell's soup sales soared 35% and total sales jumped 15% during the 3 months ending April 26 (aka, pre to mid corona-conomy).
- Confidence soared 100%: Campbell's CEO expressed newfound confidence that elevated demand will continue, and Campbell's raised its 2020 sales forecast.
A tomato bisque timeline... Consumer behaviors shifted quickly and dramatically with the quick/dramatic onset of COVID-19:
- Pre-corona: For years, consumers moved away from uber-processed packaged products (soup sales fell for 7-straight years), opting for fresher and less unpronounceable ingredient-packed foods (the reason why Kellogg's acquired Rx bars).
- Early-corona: As fear/lockdowns set in, consumers super-stocked up on cheap and nonperishable foods like canned soup and Kraft mac & cheese with expiration dates in 2038.
- Mid-corona: When unemployment rose and the economy took a major hit, the move toward cheaper, non-perishable Big Foods brands (like Campbell, Kraft, General Mills) continued.
Consumer behavior usually doesn’t change so quickly... But when it does, it could be sticky. It literally took a force majeure global pandemic and economic crisis to get people mass buying Campbell’s soup again. Now, even as the economy slowly reopens and summer brings warm, non-soup-friendly weather, Campbell's CEO believes the trend will stick. “We do expect the stickiness, if you will, of these behaviors to continue moving forward." If you will.