Campbell Soup said it would stop adding monosodium glutamate (MSG) to its condensed soups for children and increase its organic offerings as part of a broader strategy to cater to changing consumer tastes.
The world’s largest soup maker said on Wednesday that the first batch of soups made under the new policy would hit U.S. shelves in August. Additionally, it will launch new organic products, such as purees under its Plum line for kids and Pepperidge Farm Goldfish crackers made with organic wheat.
“What we’ve been doing is reinventing the company for a better growth trajectory,” said Denise Morrison, Campbell’s chief executive, in an interview. “We recognize an important part of that is reshaping the portfolio.”
Campbell also said it would remove artificial colors and flavors from nearly all of its North American products by July 2018, and that it would move away from using high fructose corn syrup in certain products, such as its line of Pepperidge Farm fresh breads by the end of fiscal 2017. Most new products it is launching in 2016 also will not contain corn syrup.
The company is struggling to grow as U.S. consumers shift away from the processed items found in the center aisles of the grocery store and opt for fresher products on the perimeter.
Earlier on Wednesday, Campbell reduced its long-term organic sales growth forecast to 1-3 percent from 3-4 percent to reflect the slow-growth environment in the packaged food industry. The company’s organic sales have not increased for two quarters now. In an effort to its top line, Campbell said that it aims to increase sales of biscuits and snacks in developing markets like Indonesia and China.
Campbell executives said in interviews that the company is looking for acquisitions in fast-growing categories. Possibilities include companies that sell beverages and snacks, said Jeff Dunn, president of Campbell’s packaged fresh business.
The company is also cutting costs through job cuts and implementing zero-based budgeting, which requires managers to justify every cost in each new period, to increase its margins.
Earlier on Wednesday, Campbell raised its full-year profit forecast as savings came in earlier than expected. The company said it expects to save $75 million in fiscal year 2015, ending Aug. 2, and raised its earnings per share forecast for the year to $2.43-$2.46 from $2.32-$2.38.
