Dive Brief:
- After months of material shortages, Campbell Soup Company saw significant improvement in its supply during this past quarter, President and CEO Mark A. Clouse said during a Q4 earnings call last week.
- The company’s Pace salsa in particular experienced an ease in supply constraints that had hampered its sales earlier in the year.
- A handful of brands including Lance, Late July and V8 are still experiencing material availability issues that are expected to persist into FY 2023, Clouse said.
Dive Insight:
Campbell is one of many CPGs that has grappled with volatile operating conditions this year, including a tight labor market and soaring inflation.
The food and snack company began facing supply constraints in 2020, as the company struggled to meet heightened demand.
In recent months however, the company has worked to strengthen its supply chain, including efforts to improve its workforce hiring and retention, Clouse said on a June earnings call.
Boosting its workforce capabilities have helped Campbell’s service levels recover, and enabled the company “to meet demand, recover distribution and enable retailers to begin to rebuild product inventories,” Clouse said in June.
As supply bounces back, the company has reintroduced promotions, mainly for its Goldfish brand, Clouse said on the Q4 call.
Still, shortages continue to plague some product lines. Advertising and promotion costs declined by 3% this quarter as investments in the V8 beverage business were curbed to reflect ongoing material shortages, Clouse added.
The CEO said that while he expects next quarter will be the company’s toughest when it comes to weathering the impact of inflation, Campbell will continue to see renewed investments in both existing and new products.
“A year ago, we were in a little bit of a supply-constrained world, and thus then adjusting some of the investments that we had,” Clouse told investors, “We will see that come back.”
