Campbell Soup freshens up with Bolthouse

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Bolthouse Farms

(AP Image)

(AP) – Campbell Soup Co. hopes to court a new generation of consumers with baby carrots, high-end juices and refrigerated salad dressings. The Camden, N.J.-based company said Monday that it will buy natural foods maker Bolthouse Farms in a $1.55 billion cash deal from private equity firm Madison Dearborn Partners LLC. Campbell says Bolthouse’s line of juices will complement its “V8″ beverage unit, and Bolthouse’s packaged carrots will deepen its healthy snack offerings.

Campbell, which is best known for its canned soups, wants to strengthen its presence in the refrigerated sections of supermarkets. Most of its products, which include Goldfish crackers, Pepperidge Farm baked goods and Prego pasta sauces, are now found in the center aisles, where shelf-stable items are sold.

CEO Denise Morrison said the Bolthouse deal will help Campbell more aggressively court the generation known as Millennials, who are particularly drawn to healthy and on-the-go foods but have largely eluded Campbell. She said demand for more wholesome options also is growing among Hispanics and baby boomers.

Campbell expects the $12 billion market for packaged fresh foods to grow about 6 percent to 7 percent per year, outpacing the broader packaged-food category.

After years of declining soup sales, as competition grew and consumer tastes evolved, Campbell also is trying to revive its main business. To appeal to younger shoppers, it plans to roll out a slew of new products this fall, including soup pouches in flavors like Moroccan chicken. “The shelf-stable category is incredibly important, and we’ll continue to build on that,” Morrison said.

Campbell, which already buys carrots from Bolthouse for its soups and juice concentrates, said it will operate Bolthouse as a separate business unit. It expects the deal to add 5 cents to 7 cents per share to its 2013 earnings. The acquisition is expected to close late this summer.

Campbell said in May that, even as its U.S. soup sales fell in its fiscal third quarter, sales in its beverage unit rose 5 percent, driven by gains in its V8 Splash and V-Fusion drinks.

Bolthouse Farms, based in Bakersfield, Calif., had sales of $689 million for the fiscal year ended March 31. Its drinks and salad dressings are sold under the Bolthouse, while it sells products under the “Earthbound Farms” and “Green Giant” brands.

Campbell shares slipped 29 cents to $32.70 by midday Monday. That’s near the mid-point of their 52-week range from $29.69 to $35.02.

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