From Canned Tomato Soups To Personalized Nutrition and Transparency

Student comments on From Canned Tomato Soups To Personalized Nutrition and Transparency

1. November 25, 2017 JessicaSchiffman says:

   You highlight an important trend within the food industry, Ivan. Out of all the steps you mention Campbell taking, perhaps the simplest one, the “What’s in My Food” website, stands out to me as having the most potential impact.

   RXBar, a smaller independent food brand, has dramatically capitalized on consumers’ desire to understand “what’s in their food.” The company immediately came to mind upon reading your post. RXBar’s packaging and branding are the ingredients themselves, as the front of each bar’s wrapping lists ingredients in large bold lettering (I.e. “3 Egg Whites, 6 Almonds, 4 Cashews,” etc.). Kellogg’s bought the company last month for $600M [1].

   Campbell’s would be wise to heavily market this website they created through a targeted digital media campaign across relevant sites and social media, spreading the idea that they too are freely sharing “what’s in their food.”

   [1] Wilkins, Peter. “What $600M RXBar Acquisition By Kellogg’s Says About Chicago’s Simple Food and Beverage Industry.” Forbes.com, Oct 13, 2017. https://www.forbes.com/sites/peterandrewwilkins/2017/10/13/what-the-600m-rxbar-acquisition-by-kelloggs-says-about-chicagos-simple-food-beverage-industry/#68e4920f1675
2. November 26, 2017 alisonboreh says:

   What an interesting move on the part of CEO, Denise Morrison. I’m not surprised she made such a pivot, given that the soup industry is dying (hello, sodium) and Campbell’s other brands (Pepperidge Farm, Bolthouse Farms) have shown poor performance over the past few years [1].

   I understand Campbell’s re-positioning around health and well-being [2]; it’s all the rage these days, after all. And given this new lens, a website like “What’s in My Food” makes a whole lot of sense, as @JessicaSchiffman mentioned above. But what I can’t wrap my head around is how Habit fits with the rest of their product portfolio.

   Habit is fundamentally geared toward food that is good for your body, and whether made with organic whole wheat or not, Goldfish simply never will be. Sure, Campbell’s acquired Bolthouse Farms in a last-ditch effort to appeal to the 80% of consumers that are trying to eat more healthfully [3]; the business was spun-off into the Campbell Fresh (C-Fresh) division in the last couple of years. But the division is struggling (in a big way). Can Campbell really DO healthy food? I’m yet to be convinced.

   And while Habit may be good for the population (and what cool technology to boot), I’m not sure Campbell is the right parent company for the new-age startup to sit. In the meantime, I’ll be snacking on some Milano cookies while we wait to see what happens.

   [1] Nunes, Keith. “Campbell Soup hit by slow soup, beverage sales.” Forbes.com. (22 May, 2017). Retrieved from http://www.foodbusinessnews.net/articles/news_home/Financial-Performance/2017/05/Campbell_Soup_hit_by_slow_soup.aspx?ID=%7B238CF36E-471D-44BA-814C-E85B46315C09%7D&cck=1.

   [2] “Campbell Outlines Key Strategies for Growth.” (20 July, 2016). Retrieved from https://www.campbellsoupcompany.com/newsroom/press-releases/campbell-outlines-key-strategies-for-growth/.

   [3] Kell, John. “Campbell Soup Shares Drop On Wilted Fresh Food Sales.” Fortune. (14 Feb, 2017). Retrieved from http://fortune.com/2017/02/17/campbell-soup-fresh-food-woes/.
3. December 1, 2017 Kyle Emory says:

   What I found interesting about Ivan’s article was the parallel drawn between a major CPG company trying to compete with smaller, rising food companies with the shift of many firms to the Blockchain system for increased transparency. Since customers are demanding greater transparency in understanding the ingredients that are put into their food, both means provide a way to demonstrate such, but at very different angles. Campbell’s has potential to attack the issue from both sides: it can leverage its stake in Habit which offers a personalized service that ‘pulls’ information from the customer and explore the idea of blockchain which ‘pushes’ information to customers about food. In theory, this approach would clearly address consumers concerns on not only what they are eating, but also what they specifically should be eating.

   What I worry about though is consumers’ willingness to use Habit if they knew it was a Campbell’s company–I do not see Campbell’s being able to separate itself from its legacy brand and products, regardless of if it having ties to a ‘hot’ new start-up that might be able to compete in the new foods / start-up realm. In addition to this, this feels as if Campbell’s is moving away from its core operating model to focus on a concept that is loosely related to their existing product assortment–unless they changed many of the ingredients in their own products, it is unlikely that they would be able to offer customers their own products. I would favor them focusing their attention more on the blockchain route with the other major players as a first start to establish themselves as a leader before working on shifting their operating model.

   Great read, thanks for sharing.
4. December 1, 2017 Consuelo Williams says:

   Thank you for this article, Ivan!
   In this particular case, I can see how transparency and traceability into the supply chain may not be helpful to Cambell’s and could possibly be detrimental to its brands equity.

   Campbell’s products contain many of the ingredients that research and the media reveal to be unhealthy. I checked out whatsinmyfood.com and what immediately stood out to me was that the classic chicken noodle soup contains GMO-ingredients along with Monosodium Glutamate – ingredients that our generation has been educated to avoid due to their relative unhealthiness. Campbell’s competitors such as General Mills and Unilever have made efforts to remove these ingredients in areas of their portfolios as a response to the shifting consumer tastes. They have even gone so far as to clearly declare their transparency and health improvements to consumers that their products are GMO-free through marketing efforts, including bold labels on the front of packaging (for example, General Mills Cheerios). Competitors are taking these types of actions because demand for transparency is being driven not only by millennial consumers, but also by government regulation at state and national levels [1]. However, when the transparency of Campbell’s supply chain and sources reinforces consumers fears of unhealthy ingredients, it is likely to work against them.

   Along Campbell’s supply chain, its customers, grocery retailers, are also responding by allocating less shelf space to similar large, traditional CPG manufacturers. This is not aided by Amazon’s recent purchase of Whole Foods. Campbell’s pending acquisition of organic food company Pacific Foods comes as no surprise, as the incumbent CPGs are fighting to recapture share [2]. Unilever is in the midst of selling off its margarine business, its original business, to pave the way for faster growing food segments as “artificial foods” suffer [3]. Incumbents that have the resources to pick of the smaller trendy healthy brands are doing exactly that.

   Lastly, as a digital learning from my experience in CPG, microsites such as “What’s in my food?” have historically been ineffective in reaching consumers, especially when it is obvious to the consumer that the site is backed by the manufacturer. While the URL title is clever, consumers still have to make the extra effort of going to the site and may not like what they find. But perhaps Campbell’s is in fact trying the keep its transparency low-key for now while its products continue to contain less popular ingredients.

   [1] Annie Gasparro and Jacob Bunge. “GMO Labeling Law Roils Food Companies” Wall Street Journal. (20 March, 2016). Retrieved from https://www.wsj.com/articles/gmo-labeling-law-roils-food-companies-1458510332

   [2] Watrose, Monica. “Campbell Soup hits snag in Pacific Foods acquisition.” (27 September, 2017). Retrieved from http://www.foodbusinessnews.net/articles/news_home/Business_News/2017/09/Campbell_Soup_hits_snag_in_Pac.aspx?ID=%7B46A61B6E-D0D6-49E1-90D6-45591B5E9A8B%7D&cck=1

   [3] Sarah Syed and Ruth David. “Unilever’s Margarine Unit Gets Bids From Bain, CD&R” Bloomberg.com. (19 October, 2017). Retrieved from https://www.bloomberg.com/news/articles/2017-10-19/unilever-is-said-to-get-bids-for-spreads-unit-from-bain-cd-r
5. December 1, 2017 Ruksi Gregory says:

   This is such an interesting topic Ivan. Thanks for sharing! The first thought that came to mind when I read your post was “are other companies like Campbell doing this?”. In doing a little research, it seems like Campbell’s competitors, Kellogg, General Mills, etc. have taken a similar strategy. [1] The one differentiator that makes Campbell’s choice riskier is that they invested in an unconventional food start-up. While the other competition has chosen more traditional food startups, Habit is more of a “science” focused start-up in the food space than “food” focused.

   My concern with this investment in thinking about this from the perspective of Habit is Habit’s decision to affiliate with a more traditional CPG company. While Campbell’s investment is clearly a financial benefit to Habit, the reputational risk of the association might lead to less adoption if the millennial generation ends up focusing on Campbell’s traditional portfolio rather than this new offering. I think Campbell’s needs to do their best to maintain brand distance from Habit to ensure that the Habit has the space to create its own unique, “real fool” brand.

   [1] http://fortune.com/2016/10/26/campbell-soup-invests-habit/
6. December 1, 2017 Sarah McIntosh says:

   Fascinating to read about Campbell’s pivot towards a seemingly healthier brand. While I’m more optimistic than Alison about Campbell’s ability to create and market healthier food, I agree with her assessment that Campbell’s likely isn’t the right parent company for Habit. My initial concern is that this doesn’t seem to fit in with the customer promise of Campbell’s, which has historically been to provide an array of slow-to-perish processed consumer goods at affordable prices. Habit is relatively expensive, and I would expect (or hope) that they orient customers towards less processed foods, which comprise a minuscule percentage of Campbell’s bottom line. In fact, Habit should be pushing consumers to buy the very foods that Campbell’s doesn’t sell.

   Habit is also an expensive investment, and so out-of-line with Campbell’s core customer base. I’d also worry about Habit’s ability to control the privacy of biometric data, especially if it’s using these as input for food recommendations.

   While I applaud Campbell’s focus on supply chain transparency and healthier eating, I’d urge them not to lose sight of the lower margins on unprocessed foods and their lack of historical competency in the fresh and unprocessed food markets. Coupled with concerns around price and privacy, Habit seems like a dicey investment for Campbell’s.
7. December 1, 2017 Y.A. says:

   Thanks, Ivan. This article was an interesting read, and I think your opening observation about consumer trends in eating is spot on.

   The Habit seems like a really smart idea, but I share others’ concerns that Campbell’s might not be the right home for it. This is less due to deficiencies in Campbell’s brand and more due to the nature of starting such a business. While DNA testing is certainly no simple thing, it has been available commercially for over decade [1]. Meal-kit services are younger; the U.S. industry started around five years ago [2]. While I doubt that their technology is overly complex, meal-kit services do face daunting marketing and logistical challenges; I believe that their supply chain and delivery processes pose a greater barrier to entry than that of a DNA testing service. In order to have survived this far, it is fair to assume that incumbent meal-kit players have invested heavily in both customer acquisition and the fixed costs necessary to manage their supply chain. The Habit might be best served by partnering with one of these companies and taking advantage of the synergy created; the alternative –recreating the logistical wheel–is costly. I could see The Habit as a very attractive acquisition target for one of the existing meal-kit companies.

   I appreciated that you pointed to customer demands as the reason for Campbell’s desire to increase the transparency of their supply chain. Consuelo raises a really good point about how that transparency might only serve to highlight Campbell’s nutritional liabilities. That said, I disagree with her. I am not sure that their goal is to have consumers combing through each product’s supply chain. I would wager that the existence of the website, not its utilization, constitutes the bulk of its value to Campbell’s. People always want transparency; they often do not actually use it.

   1. “The Human Story,” National Geographic, https://genographic.nationalgeographic.com/, accessed December 2017

   2. “Best Meal Kits Value,” Time.com, July 19, 2017, http://time.com/money/4856342/best-meal-kits-value/, accessed December 2017