A producer of inexpensive food alternatives, Campbell Soup Company benefits from consumers who want to reduce spending during the current economic downturn. Between August 2008 and November 2008, the company's sales at Wal-Mart (WMT) increased by 14%, signifying consumer's shift towards soup and other value foods. Additionally, the average number of lunches that American workers are taking to work has climbed to 42 lunches per year, the highest since 1995. With a 70% share of the US soup market, Campbell's is well positioned to take advantage of changing consumer eating trends.
With 60% of the overall soup market, Campbell's has a strong presence which will make Campbell's soup sales stable in the very long term. Campbell's currently has 80% of the condensed soup category and 70% of the ready-to-serve soup category with its microwaveable and Soup-At-Hand products.
Since Campbell Soup began to institute a retail price increase in September 2008 and not at the beginning of the quarter, earnings for 1Q09 were not as high as they should have been. Therefore, even without any other sales growth, 2Q09 earnings should be substantially greater.