Campbell’s increased its marketing and selling expenses by 11% to around $200 million USD.

The maker of Goldfish, Campbell’s soup, V8 and Prego is also anticipating a “meaningful step-up in marketing and selling spend in the first quarter compared to prior year.”

For the full fiscal year ending July 30, marketing and selling expenses moved up 10.5% year-over-year to $811 million USD.

Campbell reported Q4 net income of $169 million USD, up from $96 million USD over the three month period a year earlier. Revenue rose by 4% to $2.07 billion USD.

In this morning’s earnings call, Mark Clouse, Campbell’s president and CEO, called its marketing “effective.” In the 2024 fiscal year, it plans to maintain that support of its brands.

Snacks had an organic net sales increase of 9%, driven by increases in cookies and crackers, primarily Goldfish, and in salty snacks, thanks to the likes of Kettle Brand chips.

Meals and beverage net sales were flat in Q4 while organic net sales increased 1%. Growth in foodservice and Prego pasta sauces were partially offset by declines in across products in Canada, as well as global beverages and the U.S. soup category.

Meals and Beverage

Despite softness, Clouse expects “sequential and steady” improvement in meals and beverages throughout the year. According to Clouse, with the pending $2.7 billion dollar acquisition of Sovos Brands, owner of Rao’s tomato sauce, Campbell will be one of the “most dependable, growth-oriented names in food.”

Clouse explained the tepid performance of soup overall as a result of the fourth quarter being the lightest in terms of seasonality for the category. However, Condensed and Chunky soups continue to be “compelling areas of consumer relevance, even among younger households.” Marketing and innovation efforts there have been “very effective,” Clouse claims.

Consumers in this economic environment are also moving to more value-driven “stretchable” meals, which is positive for cooking condensed soups and pasta, something that also helped deliver “strong performance” for Prego. The company’s single serve products, however, have been more negatively impacted by families stretching their meal budgets. Optimized soup, which includes broth, has experienced “share softness,” and has lost some share to some private label.

Snacks

Despite the company being best known for its soups, snacks now represent half of Campbell’s business.

Clouse says he expects “accelerated growth and margin improvement” for the category, calling it a “fantastic year for snacks.” The performance of its portfolio, he says, is “compelling proof” that highly differentiated, relevant brands are resonating with consumers.

The snacks business is growing net sales at 7% CAGR over a two-year period and Clouse says he is “excited and very optimistic” about the new year.