If cookies are your comfort food, you are acquainted with Pepperidge Farm Milano cookies, as well as its Goldfish snack crackers and other baked goods. Owned by convenience food products maker Campbell Soup Company, Pepperidge Farm along with Arnott's biscuits in the Asia/Pacific and Australia drives the growth of Campbell's Global Baking and Snacking business. Its contribution accounts for about a quarter of the parent company's total sales. Pepperidge Farm's offerings, which include fresh bread and rolls, stuffing mix, ready-made croutons, and frozen puff pastry, as well as cookies and crackers, are also sold through Campbell's North America Foodservice and International Simple Meals and Beverages segments.
Founded in 1937, Pepperidge Farm was purchased by Campbell Soup in 1961. Under Campbell's direction, the Pepperidge Farm product portfolio has swelled from 58 products to about 600 items, and its sales from $32 million in 1961 to more than $2 billion (as a segment). The Pepperidge Farm name is among the top 2% of globally recognized brands.
During 2011 Global Baking and Snacking sales -- Campbell's second-largest business segment -- climbed 9% over the prior year, thanks to favorable currency exchange rates coupled with demand for Pepperidge Farm Goldfish crackers and bakery items, as well as gains in Arnott's. Earnings reflected heated demand and strengthened currency, and soared 10%.
Topping its strategic priorities, Campbell intends to further accelerate the Baking and Snacking business through product innovation. In mid-2011 the company earmarked more than $30 million to build a new 34,000-sq.-ft. innovation center at its Pepperidge Farm headquarters. The LEED-certified (Leadership in Energy and Environmental Design) "green" construction, which broke ground in the fall, is aimed to more efficiently and cost-effectively spur new product development. Pepperidge Farm concurrently is expanding production capacity and upgrading its facility. The investment follows its acquisition of US bread maker and distributor Ecce Panis in 2009. A $66 million deal, Ecce Panis that fattened Pepperidge Farm's portfolio of gourmet artisan breads.
Growth, however, increasingly contends with demands from the federal government and public health advocates. Campbell is voluntarily pushing for healthier products, particularly ones marketed to children. Goldfish crackers, for example, are targeted by some regulators as too heavy in saturated fat and salt. Prior to 2011's proposed new nutrition guidelines, Pepperidge Farm eliminated the crackers' trans fats, cut salt (in some options), erased the artificial colorings, and introduced a whole-wheat (albeit with white flour) variety. Other health initiatives include a Baked Naturals Cracker, hailed as 60% to 65% less fat and a comparable serving of potato chips, and an announced plan to cut the salt in 80% of its breads. The company has also garnered Weight Watchers approval for Pepperidge Farm Deli Flats bread. – less