Retailing, Franchising, and Consumerism Business Intelligence in China

Campbell Soup Plans New China Initiatives

Campbell Soup Company has outlined its entry strategy and product plans for Russia and China, the world's two largest soup consumption markets.

Since 2001, Campbell has revitalized its core North American soup business and streamlined its international operations through the sale of its businesses in the United Kingdom and Ireland. Campbell is now expanding its global focus to include the two soup markets with the highest growth potential. Soup consumption in Russia and China far exceeds that of the United States, where there are approximately 14 billion soup servings consumed per year. In Russia, there are approximately 32 billion soup servings annually, approximately 225 servings per capita, and in China, annual soup servings are approximately 320 billion, more than 241 servings per capita, with nearly all of it in both countries being homemade.

Campbell's expansion into Russia and China supports two of the company's five key strategies: to expand the company's icon brands within the simple meals and baked snacks categories; and to make its products more broadly available in existing and new markets.

Douglas R. Conant, Campbell's president and CEO, said, "The soup markets of China and Russia represent an extraordinary opportunity for Campbell. Soup is consumed in huge amounts in these countries, and Campbell is exceptionally qualified to lead the soup commercialization activity due to our unrivaled understanding of consumers' soup consumption behavior, innovative technology capabilities, supply chain excellence, and our superior marketing prowess within the simple meals category. We call this the Campbell advantage."

In China, Campbell will introduce two varieties of broth under the "Campbell's Swanson" brand: a clear chicken broth and a classic "superior" broth (known as Gao Tang in China) made up of a combination of chicken, Hainan ham, and pork. Both broths are designed for use in a wide range of Chinese cooking, including soup preparation, hot pot, braising vegetables, and preparing noodle dishes, among others.

Designed to provide delicious and healthy options for Chinese consumers, both new broth recipes are made from all natural ingredients, contain no added MSG, and are 97 percent fat free.

Campbell has been successfully selling "Swanson" broth in Hong Kong for more than 20 years. "Swanson" broth is found in more than 86 percent of Hong Kong homes, and the brand has more than a 90 percent share of the Hong Kong broth market. Campbell will leverage the Swanson branding and aseptic packaging for its new broths.

The company plans to introduce these broths in early October in 5 cities in the Guandong Province, with a total population of approximately 32 million: Guangzhou, Shenzen, Donguan, Zhongshan, and Foshan.

Swire Beverages, Coca-Cola's largest bottling partner in China, with an extensive sales and distribution network with more than 3,000 sales representatives and more than 524,000 points of sale throughout China, will distribute the products. Swire Beverages is a subsidiary of Swire Pacific, which has been operating in Greater China for more than 130 years.

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