Campbell to pay $700M for organic firm
CAMDEN, N.J. — Campbell Soup Co., struggling through a sales slump as consumers seek out more natural products, has agreed to buy a company that makes organic soup and broth for $700 million.
The deal to acquire Pacific Foods of Oregon will be financed with debt, Campbell said on Thursday. The Tualatin, Ore.-based maker of organic foods generated revenue of $218 million over the past year.
Campbell, the nearly 150-year-old company known for canned goods, has struggled with changing consumer tastes and is expected to post declining sales for a third consecutive year. The Camden, N.J.-based company has stumbled with moves into carrot farming and protein drink production since its 2012 purchase of Bolthouse Farms.
The acquisition of Pacific Foods will give it more products in a faster-growing category, according to Ken Shea, an analyst at Bloomberg Intelligence. “Organic is definitely where the customer is going,” he said.
Sales of canned soup, like those of other packaged-food products that have dominated grocery stores for decades, are flagging amid broad shifts in how consumers eat and shop.
Campbell shares rose less than 1 percent to $51.83 in New York on Friday. The stock has slipped 15 percent this year through the close of trading on Thursday.