The acquisition of Kelsen Group looks to expand Campbell Soup Company (NYSE:CPB)’s international push and increase the company’s exposure in China. Kelsen Group has been selling in China for more than two decades and business growth has compounded at a rate of 28% over the past three years. Its products include six cookie brands that last year had $187 million in sales. Kelsen Group’s relationships in China are very beneficial to Campbell Soup and I see that helping to drive the company’s further expansion into the fast-growing Chinese market.
What about competition?
The consumer-goods business is very competitive, with no shortage of players. In the organic segment, Campbell Soup Company (NYSE:CPB) has a formidable competitor in The Hain Celestial Group, Inc. (NASDAQ:HAIN). With Campbell buying Plum Organics, the company is going head-to-head with Hain Celestial and its Earth’s Best organic baby food.
To complement its Earth’s Best business, The Hain Celestial Group, Inc. (NASDAQ:HAIN) just bought Ella’s Kitchen, another premium baby and toddler food company with over 80 products. Hain Celestial sees this acquisition adding $0.05 to $0.08 in earnings per share in 2014 and $0.08 to $0.12 in 2015.
The Hain Celestial Group, Inc. (NASDAQ:HAIN) looks to achieve these results by expanding Ella’s Kitchen’s footprint in Europe and other markets. Currently, Ella’s Kitchen is only sold in the U.S. and the United Kingdom. Hain Celestial is looking to dominate the organic baby food market and will certainly be a tough competitor for Campbell Soup going forward.
Another formidable competitor for Campbell Soup is General Mills, Inc. (NYSE:GIS). General Mills has more than 100 leading brands in its portfolio. The company competes directly with Campbell Soup in the soup business with its Progresso line.
Where General Mills, Inc. (NYSE:GIS) sees the most growth is in its snack food business. As people snack more, they’re looking for the healthiest options. The company is focused on healthy innovations at its Nature Valley and Chex-Mix brands. General Mills’ snack division had sales of $1.6 billion last year and has been growing 8.4% annually. General Mills is also targeting the natural and organic-food market with its snacks Larabar and Food Should Taste Good.
Looking forward, General Mills, Inc. (NYSE:GIS) just upped its guidance for fiscal 2013 with earnings per share projections of $2.68 to $2.69. This compares to prior earnings- per-share guidance of $2.66 to $2.68. For 2014, the company expects single-digit growth and plans to return more cash to shareholders.
Foolish assessment
I really like the consumer-products business and what gets stocked on store shelves. There’s only so much store shelf space, and these companies have the marketing and distribution to get their products onto the grocery store shelves and into consumers’ shopping carts. I like the moves Campbell Soup is making with its acquisitions and see continued growth for the company and its brands.
Mark Yagalla has no position in any stocks mentioned. The Motley Fool recommends Hain Celestial. The Motley Fool owns shares of Hain Celestial. Mark is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
The article Campbell Soup’s Acquisitions Are M’m M’m Good originally appeared on Fool.com is written by Mark Yagalla.
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