Campbell Soup Company (CPB)’s Acquisitions Are M’m M’m Good

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Campbell Soup Company (NYSE:CPB) is steadily ramping up its acquisition strategy. Last month the company purchased premium organic baby food maker Plum Organics, and on Monday Campbell Soup Company (NYSE:CPB) announced that it would buy Danish snack food company Kelsen Group. These acquisitions come after last year’s deal to buy Bolthouse Farms for $1.5 billion. Bolthouse Farms makes juices, salad dressings and baby carrots. At the rate the company is going, it’s going to have to drop soup from its name because it’s no longer just a soup company.

Campbell Soup Company (NYSE:CPB)

There’s more than just soup?

Besides making the company’s famous soup, Campbell Soup Company (NYSE:CPB) also owns several well-known consumer brands. The company owns Pace Foods, which makes a very popular line of salsas. There’s also Pepperidge Farm, famous for its Goldfish crackers and Pepperidge Farm cookies. Campbell Soup also owns Prego pasta sauces and V8 vegetable juice. It also owns several smaller brands in Europe and Arnott’s Biscuits, which is Australia’s largest biscuit company and second-largest snack foods company in Australia. Its products are sold in more than 120 countries worldwide.

How has the company performed?

Over the past year the stock has been a great performer, rising over 39%. In the first quarter of this year, net sales were up 15%, or 4% excluding the Bolthouse Farms acquisition, which was completed in the first quarter. Adjusted earnings per share increased 11%. Considering that soup is the company’s oldest business, it’s amazing that the soup business grew 14% in the first quarter. The soup business is a phenomenal business for the company and continues to grow.

What is the outlook for growth?

Bolthouse Farms was bought for its appeal with younger and more affluent consumers. Its customers tend to be more health-conscious and like the company’s baby carrots, salad dressings, and super-premium beverages. On the company’s most recent earnings call, CEO Denise Morrison said of Bolthouse Farms

Beverage innovations launched by Bolthouse this spring are exceeding expectations. We believe this has been a great acquisition for Campbell, and we continue to be extremely excited about the platform it provides us to expand in the fast-growing package fresh category.

The acquisition of Plum Organics gets Campbell into the fast-growing premium and organic baby food market. Plum Organics will be included in Campbell Soup Company (NYSE:CPB)’s portfolio of kid-focused foods and drinks and will have $1 billion in sales. Plum Organics is the number-four baby food brand in the U.S. with sales in 2012 of $93 million. There’s plenty of room for growth with Plum Organics considering that it’s only sold in the U.S. and the United Kingdom. Campbell Soup can use its marketing and distribution to roll out the brand into other countries and propel growth.

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