Campbell Shackled by Supply Constraints, but Brand Investments Should Help It Weather the Storm

Since joining Campbell in January 2019, CEO Mark Clouse’s tenure has been fraught with change. Not only has Campbell parted ways with its fresh business and the bulk of its international operations while also working to steady its core meals, beverages, and snacking arms, it has also navigated a global pandemic. But we don’t attribute its recent performance (14% consumption growth on a three-year stack basis) as merely a byproduct of heightened consumer stock-ups of essential fare since March 2020. Rather, we think management’s strategic agenda--anchored in funneling additional investment across its operations--fueled by its pursuit of extracting inefficiencies has set Campbell on a sound course. And while much consternation rightly centers on how the business is poised to emerge in a post-COVID-19 world, we think the steps that had been underway to steady the business and to juice its sales trajectory before the pandemic should serve as a springboard against a more normalized demand environment.