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Campbell Soup CEO Leaves: A Warning for Acquisitive Leaders

Acquiring companies can lead to growth and success, but as former Campbell Soup CEO Denise Morrison learned, only if it’s done right.
Denise Morrison, former CEO of Campbell Soup Company
Denise Morrison, former CEO of Campbell Soup Company

The abrupt departure of Denise Morrison from the top job at Campbell Soup carries a handful of warning signals for other CEOs, inside and outside the packaged-foods industry. Maybe the biggest caveat is that directional change for a traditional industry giant can be very difficult – even unsuccessful – if the execution isn’t as brilliant as the vision.

The 64-year-old Morrison retired to end her seven-year tenure as chief at Campbell, and a 15-year run at the company, while the interim CEO cited the need for accelerated growth and improved execution. The biggest problem was what remains the most important statistic for the company: soup sales. Even after years of Morrison trying various new ways to get millennials to eat Campbell soups, sales in that age group were down by 1.9 percent over the last year, while rival brands were up by 3.8 percent and private-label soup sales rose by 11 percent.

“We must take a fresh look… with urgency,” said board member and new interim CEO Keith McLoughlin. “Everything is on the table… there are no sacred cows.”

But another major failure under Morrison may have been just as telling: the little traction she got from a trail of major acquisitions and small investments over the last several years. The aim of those acquisitions was to jump-start growth and innovation by broadening Campbell beyond its traditional packaged-goods brands into fresh and new food forms, and even services, that were thriving.

This is an increasingly popular option being used by CEOs to accelerate growth, even amid a booming economy. In fact, 46 percent of CEOs just surveyed by KPMG said they plan to use accelerator or incubator programs for startup firms to augment growth over the next few years.

Morrison used large acquisitions to diversify a brand and product portfolio that mostly consisted of processed soups, V8 juices, Prego pasta sauce, and Pepperidge Farm snacks. She acquired Bolthouse Farms, the vegetable and juice brand; Garden Fresh salsa and hummus; Pacific Foods, an organic soup company; and Plum Organics baby and toddler food. She also launched an investment fund for Campbell to work with innovative startups and smaller brands and acquired a stake in Chef’d, a meal-delivery company.

But Morrison either didn’t reckon with, or couldn’t overcome, the execution challenges that awaited her as CEO. The company didn’t do a very good job of integrating all of these acquisitions into a seamless company, neither for the benefit of the acquired brands nor for the broader benefit of Campbell. Clearly there was a problem of cultural fit between Campbell and the startups — in comparison with how Coca-Cola, for example, was able to integrate Honest Tea or how Unilever has integrated the myriad startups it has recently acquired.

So the company was forced to write down the value of the Bolthouse and Garden Fresh acquisitions by hundreds of millions of dollars over the last few years, blaming issues such as drought in California and distribution challenges with Garden Fresh.

And so rough were these fits that, with her last and biggest acquisition, Morrison seemed to throw up her hands: Campbell bought Snyder’s-Lance, a leader in traditional and calorie-laden salty snacks, on the complete opposite end of the nutritional spectrum from her other big purchases.

“Denise did a very good job of rallying the troops to understand what the challenges were that were before the company, and she had a very solid understanding of what Campbell Soup needed to do in order to compete in today’s environment,” Ken Harris, managing director of Cadent, a major CPG brand consulting firm, told Chief Executive. “But unless there’s a very clear understanding of the go-forward next steps – that are embraced by the whole organization and executed with excellence – other CEOs are going to have the same kind of difficulties.”

It’s important to note, Morrison’s difficulties were inherent in the role and would have challenged anyone looking to turn around one of America’s most iconic food companies. “The reality,” Harris said, “is that some of those efforts fell short, and you can’t have six quarters of sub-par performance and expect that people will continue to be patient—for anyone. It’s not really about Denise.”

Read more: Marvin Ellison: From Frying Pan To Fire—When To Make A Move As CEO


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