Campbell: Broth sales get bump from more cooking

Published on NewsOK Modified: February 14, 2014 at 1:24 pm •  Published: February 14, 2014
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NEW YORK (AP) — When people take an interest in cooking, broth sales apparently get a bump.

Campbell Soup has been struggling to boost sluggish sales of its famous condensed and ready-to-eat canned soups. But there is a bright spot in its U.S. soup division: broth.

The company on Friday reported a higher quarterly profit as U.S. soup sales rose 5 percent. The bump was largely a quirk of the calendar, however; Thanksgiving fell later in the year, meaning the higher shipments associated with the holidays were pushed back to its fiscal second quarter.

In fact, Campbell said consumer purchases for its soup division were actually down 1 percent in the period. People bought more of its Swanson broth, but that was offset by declines in purchases of its condensed and ready-to-eat soups.

In a call with analysts, Campbell CEO Denise Morrison noted that the growth in broths is being driven by "an increase in homemade soup behavior" and people cooking more with broth in general.

Mark Alexander, president of Campbell North America, added in a phone interview that people often buy broth to make homemade soup, but start using it for other purposes over time. That could include boiling vegetables or making stir fries.

"Broth is for people for whom cooking is a big deal," Alexander said, noting that Campbell targets a customer it refers to as a "passionate kitchen master."

The growing interest in cooking is why Campbell recently introduced a line of flavored broths, which let people make homemade dishes while greatly reducing the amount of work they have to do in the kitchen.

The strategy of catering to people's desire for both convenience and homemade meals can been seen in other parts of Campbell's portfolio. The company's new "Skillet" sauces, for instance, are positioned as a way to make a quick homemade dinner. All people have to do is add some vegetables and meat to the sauces, which come in flavors such as Green Thai Curry and Creamy Chipotle.