Jack Aronson’s role in the revolution in the consumer-packaged-goods industry may come full circle thanks to the devolution of Campbell Soup.
The founder and former CEO of a Ferndale, Michigan-based salsa-making outfit called Garden Fresh now wants to repurchase his old company less than four years after he sold it to Campbell Soup. That’s because under new CEO Mark Clouse, the Camden, New Jersey-based CPG giant is unraveling the grand but failed strategy of his predecessor, Denise Morrison, to make the soup-and-snacks company a major player in fresh foods.
Aronson and his partner sold Garden Fresh to Campbell in 2015 for $231 million. Now, with the brand since having fallen substantially below its sales level of $110 million a year at that time, the two former owners and their investor group should be able to buy back their old company much more cheaply. There are two other significant bidders for Garden Fresh, Aronson’s been told.
“It’s out there,” Aronson told Chief Executive. “I’m afraid that a private-equity firm might grab it and build it up and then sell it, or another buyer might move it out of the country. So I thought the best thing for the employees would be for us to step up and buy it.”
It wasn’t supposed to happen this way. Morrison took over at Campbell in 2011 determined to make over the traditional titan of canned soups and savory snacks, such as Pepperidge Farm, into a more modern company that played in the fresh and better-for-you foods and beverages that were turning the grocery business upside-down.
So she loaded up on disruptors such as Bolthouse Farms, a carrot grower that became a fresh-juice leader; Plum Organics baby and toddler foods; and Garden Fresh. Campbell even bought a majority share in Habit, an online-nutrition company started up by Plum founder Neil Grimmer.
But Morrison failed to integrate the new fresh-food properties into Campbell and at the same time couldn’t retain the momentum they’d each built on their own. Meanwhile, despite all sorts of efforts, neither was Morrison able to revitalize sagging soup sales. So she was sacked last summer after a three-year slump and replaced by board member Keith McLoughlin on an interim basis.
Even as a temp, McLoughlin wasted little time in unwinding Morrison’s approach, putting Bolthouse and Garden Fresh on the block separately and vowing to put Campbell’s entire focus back on its core businesses of soups, where luring millennials has been a key challenge, and snacks, where one of Morrison’s last big moves was acquiring the Snyder’s-Lance company. More recently, Clouse decided to sell Campbell’s stake in Habit.
Aronson said that Morrison had kept her promises to him about maintaining Garden Fresh operations in Michigan after Campbell’s purchase of the company, “took care of the employees really well and helped in the community.” Campbell even kept its pledge not to change a recipe for Garden Fresh products – which also include lines of hummus, dips and tortilla chips – without checking with Aronson first.
“But a lot of times when a company buys a smaller brand because it’s great in a certain region, and they want to take that nationally, they stop doing what the owner would do,” Aronson said. For instance, he said, Campbell allowed Garden Fresh’s strong social-media presence to wither somewhat. “Their heart was in the right places,” he said of Campbell, “but I just don’t think it was as easy as they thought it would be.”
Aronson’s group “is the most qualified” of the bidders for his old company, he maintained. “And we have the best chance of growing the business and keeping all the employees.”