Campbell’s soup has been around for more than 200 years and is one of the most beloved soup brands today.
It’s essentially an American institution, which is why so many people are feeling saddened right now after hearing that Campbell’s may be closing its doors.
Campbell’s stockholders have found themselves in a major disagreement, revealing some troubling financial realities about the company.
In recent years, many Americans have shifted away from processed foods and towards more natural alternatives.
As their profits declined, Campbell’s tried to diversify by acquiring other companies, but this proved to be a costly mistake. Today, the company faces a debt of $9 billion.
The Dorrance family, owning 40% of the shares, is reluctant to change their business model. Hedge fund investor Daniel Loeb of Third Point, which owns about 7% of Campbell’s shares, has been pressing for significant changes. His suggestions include rebranding from recipes to logos and getting rid of the iconic red and white cans.
When the family refused to make any changes, Loeb sued the company for mismanagement, accusing them in an open letter of “waste, ill-conceived strategy, and inept execution.” Campbell’s responded by describing Loeb as “unoriginal and uninformed.”
Third Point expressed interest in restructuring the board, and earlier this week, both parties agreed to have two of Third Point’s five nominated members join the board.
This may indicate that Campbell’s will need to make more adjustments, which could be crucial for their survival.
