What is a marketer to do when their whole product category isshrinking? That’s the situation Campbell’s Soup found itself in asmany consumers decided that soup was no longer “mmm mmmgood.”

Campbell’s Soup was a pioneer of mass foodmanufacturing, making “shelf-stable” (canned) goods a fixture inAmerican pantries. But many of today’s consumers prefer a differentapproach to eating—seasonal, fresh, and organic. This isparticularly true for America’s 80 million millennials, animportant generation that Campbell’s and other soup makers were notattracting to their traditional canned soup products. To reconnectwith this market segment, new CEO Denise Morrison took the125-year-old company in some bold new directions, using acombination of internally driven product innovation andacquisitions of food industry trailblazers.

Job one was to understand what millennials want infood. For this research, Morrison sent Campbell’s employees tocities known as hipster hubs—Austin, Texas; Portland, Oregon;London; and Paris—to learn about the preferences of these potentialcustomers. This generation, they learned, is culturally diverse andglobally connected. While they have college degrees, they also tendto be underemployed. This “dine-out” generation likes cuisines thatwere once considered exotic: Mexican, Indian, and Asian. Campbell’svice president of consumer insights summed it up: “They go throughlife hunting out and gathering different experiences. They samplefoods in the same way they sample jobs.” The Campbell’s team didn’tjust ask customers what they wanted—they used a process of deepimmersion, which involved executives eating meals with customers intheir homes, looking in their pantries, and tagging along on tripsto the supermarket.

Campbell’s also wanted to predict where food tasteswould be headed in the future. For this task, the companyinterviewed chefs, nutritionists, and academics, but also expertsof a different sort: designers, anthropologists, and futurists.Campbell’s learned not only what consumers may soon be eating, buthow they want to buy their food. Technologies such asaugmented/virtual reality, artificial intelligence, and new kindsof currency will affect how food is purchased—both through mobiledevices and brick-and-mortar retail.

Acquisitions were one route Campbell’s took to add toits product line. Garden Fresh Gourmet was a health-focused brandwith a loyal following for its salsa and hummus. Now a Campbell’sbrand, it provides customers with gourmet soups in sizes to feed awhole family. Bolthouse Farms, a seller of fresh carrots andrefrigerated beverages, brought additional expertise and customers.To reach millennial parents, Plum Organics was added, bringing withit a food line for babies and toddlers.

These acquisitions helped address another finding ofthe research: the high priority placed on healthy, fresh food.Consumers were concerned about the levels of sodium and highfructose corn syrup in Campbell’s traditional soups. The trendtoward a preference for organic food also influenced the company’sinnovation choices. Campbell’s launched an internally developedproduct, Go Soups, a premium-priced line of soups focused onfreshness and packaged not in cans, but in plastic pouches designedto convey that freshness. But Campbell’s has not kicked the cancompletely, offering its Well Yes! Soups in a can, but withoutartificial ingredients. And Campbell’s Simplicity line useshigh-pressure processing, allowing the product to retain its flavorand color without the use of preservatives.

This focus on health extends beyond products toeducation and a unique service offering. Campbell’s now offers awebsite and app, whatsinmyfood.com, that allows consumers to seedetails about the ingredients, where the food is sourced, and howit’s made. Even more revolutionary is its acquisition of Habit, astart-up providing personalized diet recommendations. Customerssend an at-home nutrition test kit to a certified lab and thenreceive a personalized diet along with coaching from anutritionist, all based on the consumer’s lifestyle, physiology,and health goals. For a company accustomed to a few innovationseach year, the new pace of product development is breathtaking—inone year, they planned to introduce 200 new products. Not all arehits: a kit to make soup in Keurig coffeemakers was abandoned dueto disappointing sales^. However, to keep pace with thechanging priorities of millennials and all its customers,Campbell’s will likely have to keep up this aggressive rate ofinnovation, using additional acquisitions and continuous R&D toroll out more products and services.

Questions

Constant assessment of your market and target areessential in new product development.

Develop a psychological and social profile of theCampbell Soup customer to include VALS framework and itsrelationship to segmentation and targeting.

How do segmentation strategies change based on youranalysis?

Defend Campbell's decisions in relation to the productlife cycle and new product development.

In what way would strategies change based on the whatstage Campbell's products are on the PLC?

Examine the advantages and disadvantages of productexpansion and new product development from Campbell's marketingperspective.

Which area would be most effective and why?