An Interview with Denise Morrison, CEO of Campbell Soup Company
Navigating the immense transformation currently taking place in the food industry is certainly challenging, especially when you’re at the helm of an iconic company. From how we grow food to how we eat it, this complex world is being reshaped by technology and new consumer values. How will established food companies manage this transition? To future proof food, they must evolve to become human centric, design centric, future oriented, and technology fueled.
Denise Morrison, President and CEO at Campbell Soup Company, is executing this strategy on all fronts. By reimagining how the company develops innovation and long-term strategic thinking and activating Campbell’s Purpose – “Real food that matters for life’s moments” – she is reshaping Campbell as the “biggest small food company” in the industry.
What challenges impact the food industry today?
There are a lot of changes going on in the food industry, and I believe they all start with the consumer. When you step back, you can see there’s been a series of seismic shifts, the first one being a global economic realignment where we’ve had a burgeoning middle class in developing markets and a shrinking middle class in developed markets like the US.
The second one is a massive demographic shift. The baby boomer generation, at 80 million strong, is a major cohort. But coming up behind them is the millennial generation, which is also close to 80 million strong, and behind them Generation Z. There has been a market shift with this demographic change, and if you look underneath it, you will also see a change in the composition of the American family. Families composed of a mom, dad, and two kids represent only around 24% of the population. Now there are other types of households, such as single adult households, multi-generational or multicultural ones, and households with same-sex parents or single mothers. Every one of these households or generations eats differently, shops differently, and thinks differently about food.
There’s also a definite shift toward preferences for health and wellbeing – and this means different things to different people. This shift has had a profound impact on the food industry, particularly as it relates to consumers’ quests for more fresh, natural, organic, and functional foods.
Finally, the digital shift is hitting like a tsunami. It is changing the way we engage and connect with consumers, and it’s also going to have a profound impact on commerce and the way we think about running our companies. Any one of these seismic shifts would be huge in and of itself; but they are all converging and accelerating, and that presents a lot of exciting opportunities, as well as challenges.
In what ways is Campbell serving consumers’ desires for health and wellbeing?
Our goal is to be the leading food company in that space. It starts with our purpose: “Real food that matters for life’s moments.” As you can imagine, we’ve had great debates about what “real food” is. We decided that it was necessary for us to put some definition around it – not only for ourselves, but also to make sure that we were validating it with consumers. So, we established our real food philosophy. Real food is food that we are proud to serve at our own tables. Real food has roots. It should be made with recognizable, desirable ingredients from plants or animals. Real food is prepared with care. Real food should be affordable and accessible to all people.
Transparency is the single most important ingredient in the recipe for building consumer trust. And consumer trust is everything. A company and a brand needs to have a positive reputation. Without that, you have nothing.
How is Campbell building consumer trust?
There has been an absolute erosion of trust across established institutions, whether you look at governments, media, or food companies. For this reason, consumer trust has to be earned every day. We’re taking steps to do that. We are improving the ingredients in our food. This includes removing artificial colors or flavors, taking BPA out of our can liners, and using antibiotic-free chicken in our recipes. These are just a few of the many steps we have taken to provide real food that is affordable and accessible. We have also launched www.whatsinmyfood.com, where the consumer can click on each brand to learn what is in the food, how it’s grown, and where it comes from. We continue to enhance this information to give consumers that knowledge about their food. We believe that this transparency is really imperative to building consumer trust.
How do you design transparency into the way your products are perceived?
Our purpose calls for us to acknowledge that consumers appreciate what goes into our food, and why – so they can feel good about the choices they make for themselves and their loved ones. In January 2016, we announced our support for mandatory national labeling of products that may contain GMOs. We put the consumer at the center of everything we do – that’s how we’ve built trust for nearly 150 years. We have always believed that consumers have the right to know what’s in their food.
We have also declared our intention to set the standard for transparency in the food industry. We have been openly discussing our ingredients, including those derived from GMO crops, through our www.whatsinmyfood.com website. We are supporting digital disclosure and are working to remove artificial colors and flavors from our products.
This decision was popular with consumers and customers, but not with some players in the industry. Our support of mandatory federal GMO labeling set a new bar for transparency. Printing a clear and simple statement on the label is the best solution for consumers and for Campbell.
How have you prepared your company to operate successfully in the changing consumer environment we face today?
We are in a very complex and volatile environment. It is not only nice to have a sense of what’s coming – it is absolutely essential to have a long-term view of what lies ahead. We decided to shift from just being satisfied with operating the business based on insights, to really driving our company to understand and apply foresight to design something actionable. And that’s exactly what we’ve done. It took us 18 months, and we worked with a team of people across the entire enterprise and the leadership team to really do a deep dive into the future forces that will drive the food business and the consumer. In collaboration with Idea Couture, we identified 14 foresights that we would have to pay attention to as a company, and then narrowed those to 4 of the most critical ones that will drive growth for our business. Those literally became the genesis of our strategic plan for the next couple of years. We believe that this will give us the roadmap we need to really adjust and adapt to this changing world.
Can you tell us about using these four concepts to design for the future?
The foresights are acting as the four pillars of Campbell’s real food strategic plan. The first pillar, Limitless Local, is about people’s relationship with food. It’s about smaller, regional farming where people have a personal understanding of where their food is grown, how it is grown, and the sustainability and ethical sourcing that is involved with it. A great example of this is our recreation of the 1915 recipe for beefsteak tomato soup. The recipe specifically called for local New Jersey beefsteak tomatoes. This proved to be challenging. In the early 20th century, Campbell sourced our tomatoes from New Jersey and the surrounding area. Today, we source most of our tomatoes from California. Ironically, when the team found a New Jersey farm that grew these tomatoes, they learned that the two owners had delivered their grandfather’s tomatoes to Campbell when they were teenagers. This was serendipity, and it is a great example of a Limitless Local story.
The second foresight is My.Moments. We learned that consumers are not eating three square meals a day; they are eating multiple times a day, and it is either mini meals or snacking. Snacking today is often mindless munching. The foresight gave us a window into the idea of what we call “purposeful snacking.” This includes functional snacks, those that fuel consumers or have a deliberate purpose in their lives. One example of My.Moments can be seen in the advertising of our Pepperidge Farm Milano cookies, which is based on the insight that busy moms need a moment for themselves. The idea is that moms are willing to basically share everything with their children – except their Milano. It’s a cute play on that moment and demonstrates a deliberate snacking opportunity.
The third foresight, Future Commerce, goes back to what I said before about the seismic shifts in ecommerce and digital. The world of food is becoming omni-channel – we have seen it happen in apparel and electronics and now it is happening in our space. Consumers are looking to buy, shop, and consume food when and where they want. They’re making use of digital technology to order online, seek out recipes, and even have food delivered to their home. We are working diligently to set Campbell up to be more digital and to respond to this changing marketplace. This includes working with our customers to understand what they are doing in digital and working with partners to explore the ramifications and implications of a connected kitchen. We’re doing a lot of work right now to understand the new technologies that are coming at us and to learn how we can participate in and even lead that change.
The final foresight is Better.Me. It addresses the many consumers who are concerned about their health and wellbeing. But the real foresight behind Better.Me is the intersection of food, technology, and health and wellbeing. Campbell has expanded in the fresh food space with the acquisitions of Bolthouse Farms and Garden Fresh Gourmet, as well as the organic and natural space with Plum Organics and the pending acquisition of Pacific Foods. These acquisitions have given us a nice platform within the fresh, organic, and functional food space where we can continue to build over time and deliver on consumers’ needs. Millennials in particular are very concerned about offerings in fresh and health and wellbeing, so we need to develop a strong footprint. It’s this foresight that inspired us to fund a new startup company called Habit, which was founded and is led by Neil Grimmer, the entrepreneur who also created our Plum Organics business. Habit is currently in beta testing in San Francisco and is positioned at the intersection of health, technology, and food. It is poised to lead the personalized nutrition revolution. The consumer receives an at-home nutrition test kit, the data is collected and sent to a certified lab, and a profile of the consumer’s nutrition type is determined by their biology, biometrics, lifestyle, and other relevant data. Diets are not one-size-fits-all. Each human being is different, and Habit gets right at the personalized nutrition sweet spot. We can segment consumers based on the types of food they need for their body, and then provide personalized meals for them. Habit is still in its early days, but we’re very excited about new business models that could emerge from this startup in the area of personalized nutrition, inspired by the Better.Me foresight.
What role will Campbell play in the future of food?
Campbell is a 148-year-old company, and we are wildly excited about the future of food. If you think about Campbell, we’re very different from many of our peers in the food industry. We have the soul and entrepreneurial spirit of a startup with the scale and assets of a Fortune 500 company. We believe we can be the biggest small company. That means leveraging the best of big for scale, where it matters, and the best of small, which is the authenticity and the realness of our food and our brands. Together, we can make real food affordable and accessible to more people. That’s a very exciting proposition for us, and I believe it is a point of differentiation. Our foresight work has become a part of how we become the biggest small company by strengthening our core business and expanding into faster growing spaces while building a culture of innovation and high performance. We are excited about the future.
Any closing thoughts?
I couldn’t be more excited about the future of food. Each generation brings its own challenges, and the next generation of consumers is always looking for different things than their parents and grandparents sought. Over the years, Campbell has been able to deliver for our consumers, and we will continue to do so going forward, which is a great opportunity for us. I’ve been in the food business for over 35 years and I have never seen change coming at us at the accelerated rate that it is today. You can either lead change or be a victim of change, and it’s much more fun to lead it. At Campbell, we are looking forward to leading change to provide real food to the next generation of consumers where, when, and how they want it.