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Campbell Soup Investment in Chef’d a Sign of the Times - $CPB

All across the food industry, big brands are looking to invest in smaller businesses to sustain their profitability. and $CPB, Campbell Soup Investment in Chef’d is a sign of the times.

Campbell Soup Co (CPB) that manufactures Goldfish crackers and Pepperidge Farm cookies in addition to its line of soups, is to invest $10 million in Chef’d, the company offering meal kits. This is an effort by Campbell to adapt to the changing needs of consumers and their desire for healthier food. Not only that, the company feels that with this deal it can strengthen its e-commerce division. If you remember, Campbell Soup is the largest soup maker in the world. But it still reports weak sales since there has been a dip in packaged food demand in the United States because of overall health consciousness among the public, causing them to look for healthier options. No wonder then that these companies are now investing in fresh and organic food.

Campbell Soup did its part in 2015 by starting a fresh-food unit dealing with refrigerated beverages, salad dressings, vegetables, etc. However, that hasn’t tasted much success lately. This is a trend faced by all the major food brands including Kellogg ($K), General Mills ($GIS) and Danone. Each has resorted to launching venture capital units, all of which has happened in the past 18 months.

Coca-Cola ($KO) too has felt the waning demand due to health concerns regarding its artificially made aerated drinks. To compensate for this it has made many other investments, including an investment in Honest Tea.

The food giants are being challenged by smaller companies with hardly any brand value. So, these big brands join smaller businesses by investing in them or collaborating with them. This trend characterizes many of the industries out there.

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