Category: Canned & Preserved Foods

Rob Imeson is the Founder and CEO of Splash Wines. Splash Wines is a direct-to-consumer wine company that provides great wine at affordable prices, and delivers it directly to your door.

CHALLENGE

Splash Wines was founded in 2014 as a family-run business with generations of history in the wine industry. 

“As the business grew, we started seeing opportunities to accelerate our growth.”

Splash had large orders coming in and wanted to buy inventory in larger quantities. The Splash team was growing, too. An expanding customer base introduced a new need for additional team members. 

We needed to meet the increased demand and take advantage of new growth opportunities.

Splash’s founders knew they didn’t want to give up equity in the business or use a short-term solution. 

“We were growing too quickly and our capital needs would continue to evolve in the coming months. We needed a financing partner that was going to help with our immediate need for cash, but also grow with us.”  

SOLUTION

In the process of searching for flexible debt financing solutions, Splash Wines came across Aion. After discussing their needs and carefully evaluating their finances, Aion provided a tailored proposal. Based on Splash’s revenue, growth, projections, and goals, Aion determined that a revolving line of credit was the best option for their situation. 

Aion’s asset-based lending can be backed by inventory, invoices, or a combination of the two. This worked out well for Splash because, as a direct-to-consumer business, traditional invoice financing wouldn’t have provided the funds they needed at a cost that made sense.

We decided to move forward with Aion because the cost of funds was competitive and the team was invested in our story and goals as much as the numbers. 

Splash started out with a small line of about $300,000. This provided the funds they needed to cover cash flow gaps and run the business efficiently. 

“From the people to the platform, our onboarding experience with Aion was seamless. The team was transparent about the requirements and their technology was intuitive and easy to use.”

RESULT

“Partnering with Aion has paid off tremendously for Splash. In addition to covering cash flow gaps and fueling our growth, Aion has been extremely flexible as our business needs have changed.”

When the pandemic hit, Splash Wines experienced unexpected explosive growth. 

“Our revenue tripled in just a few months and we quickly outgrew our current line of credit. Aion was quick to respond and increase our credit limit.”

When Splash had an unanticipated opportunity to purchase a significant amount of inventory at a much reduced price, they were already near their credit limit with Aion. 

“We reached out to the Aion team and explained what we were trying to accomplish. They arranged for a short-term line in addition to our current line to ensure we were able to take advantage of this opportunity. “

When we started with Aion we had less than $1M in sales. Today, we’ve grown to over $30M in sales. And our initial $300K line has grown up to $4M. 

“Aion’s flexible financing solutions have been a key factor in Splash Wines achieving our remarkable growth. Across our business needs – both expected and unanticipated, – Aion has provided a financing solution we can recommend without reservation.”

CAMDEN, NJ. — The Campbell Soup Co. is expanding its product line with the introduction of two new gluten-free cooking soups.

Available in cream of mushroom and cream of chicken varieties, the additions are aimed at the nearly 20% of American consumers avoiding gluten, according to data from a Campbell consumer survey. The condensed soups are launching in retail locations nationwide throughout the summer for an expected retail price of $1.99.

“Answering the question of ‘what’s for dinner’ can be challenging for those trying to avoid gluten,” said Gary Mazur, vice president of marketing, Soup & Broth, Campbell Soup Co. “Through these new offerings, we’re excited to have our iconic soups help address dietary needs and create even more mealtime moments.”

CAMDEN, NJ. — The Campbell Soup Co. is acquiring Sovos Brands Inc., Louisville, Colo., for approximately $2.7 billion. Sovos Brands is a manufacturer of sauces, yogurts and frozen prepared foods marketed under such brands as Rao’s, noosa and Michael Angelo’s.

“This acquisition fits perfectly with and accelerates our strategy of focusing on one geography, two divisions and select key categories that we know well,” said Mark Clouse, president and chief executive officer of Campbell Soup. “Our focused strategy has enabled us to deliver strong results over the last five years, enhance our brands and capabilities, and generate strong cash flow to lower debt. With all this progress, I am confident in our readiness to execute and integrate this important acquisition.”

The closing of the transaction is subject to Sovos Brands stockholder approval and customary closing conditions, including regulatory approvals. Closing is expected by the end of December. The transaction has been approved by the boards of directors of both companies, according to Campbell Soup.

In fiscal 2022, Sovos Brands generated $878.4 million in sales. The Rao’s brand is the company’s largest, with $580.1 million in sales in 2022. During the past few years Sovos Brands had extended Rao’s into such additional categories as frozen entrees, frozen pizza, pasta and soups.

During the first half of fiscal 2023, ended July 1, Sovos Brands recorded net income of $13.2 million, equal to 13¢ per share on the common stock, and an improvement over the first half of fiscal 2022 when the company recorded a loss of $26.2 million.

First half sales ticked up to $470.4 million from $407.4 million the year before.

“We have built a one-of-a-kind, high growth food company focused on taste-led products across a portfolio of premium brands, anchored by the Rao’s brand,” said Todd Lachman, president and CEO of Sovos Brands. “Our success would not have been possible without the incredibly talented and passionate team at Sovos Brands, which has been instrumental in building one of the fastest growing food companies of scale in the industry today.

“This transaction is expected to create substantial value for our shareholders, resulting in a 92% increase from our 2021 IPO price. As one of the most trusted and respected food companies in North America, I’m confident in Campbell’s ability to continue bringing our products to more households and further building on our track record of growth and success for years to come.”

CAMDEN, NJ. — Earnings gains were modest at Campbell Soup Co. in fiscal year 2023, and “transitory pressure” from shifting consumer behaviors will be a headwind early in fiscal 2024, said Mark A. Clouse, president and chief executive officer.

Setting the stage for an update on the company’s business, Clouse offered his thoughts about the current consumer landscape.

Results in the fourth quarter were affected by “transitory pressure,” particularly on the Campbell Soup Meals & Beverage segment, and effects of this pressure are expected to persist into early fiscal 2024, he said in an Aug. 31 call with financial analysts.

Describing three factors he said were responsible for the pressure, Clouse said “residual effects from the effects of COVID surges” in fiscal 2022 had an effect.

“These surges notably benefited categories like soup in the prior year, particularly during the summer, a period that historically has lower sales,” he said. “We expect this effect to continue into Q1 and greatly diminish as we approach the second quarter of fiscal 2024.”

He attributed half of the decrease in fourth quarter soup sales to this factor.

Lapping double-digit price increases a year ago also has had an impact, Clouse said, noting that the effects had been anticipated and are expected to be a headwind throughout the new fiscal year.

He said a lessening effect is expected in the second half of the year.

“We do also expect sequential volume improvement to mitigate this pricing headwind as we move into Q2 in the second half,” he said.

A third factor cited by Clouse was changing, more cautious, consumer behavior in the face of economic uncertainty and prolonged inflation.

“Consumers began prioritizing categories based on more immediate needs and value leading to fewer categories in the shopper basket,” he said. “This pattern of behavior resulted in a real focus on seasonal priorities and has obviously created a headwind on categories like soup in the summer. We expect our categories like soup, which is a top 10 category in the fall and winter, to increase in priority, and we’re already seeing some early signs of improvement.”

Another consumer dynamic Campbell Soup has identified is a shift to “value-driven stretchable meals,” Clouse said. The effects for the company have been a mixed bag.

“It has undoubtedly been a positive driver on categories like pasta sauce and condensed cooking soups, as well as broth, while also adding pressure on categories like ready-to-eat soup,” he said. “We expect this behavior to subside as inflation continues to moderate.”

In the case of the company’s Snacks division, Clouse said the category consistently holds through the year as a top consumer category (unlike soup).

“Moreover, our snack power brands have displayed remarkable resilience as consumers, even while prioritizing value, continue to sustain their purchases across our differentiated portfolio,” he said.

For the year ended July 30, Campbell Soup net income was $858 million, equal to $2.87 per share on the common stock, up 13% from $757 million, or $2.51, a year earlier. Sales were $9.36 billion, up 9% from $8.56 billion the year before.

For the fourth quarter, net income was $169 million, or 57¢ per share, up 76% from $96 million, or 32¢, a year earlier. Sales were $2.07 billion, up 4% from $1.99 billion. Adjusted for the divestiture of Emerald nuts, sales were up 5%.

For fiscal 2024, Campbell Soup said organic net sales growth will be 0% to 2%, adjusted EBIT will grow 3% to 5% and adjusted earnings per share will grow 3% to 5%. Among the assumptions underpinning the guidance, Campbell Soup said volume declines were expected in the first half of the year with “sequential improvement” each quarter leading to “positive trends” in the second half. Pricing will be less of a contributor in fiscal 2024 to sales growth, the company said.

Earnings growth and margin improvement are expected by Campbell Soup to be “second half weighted, due to an improving cost outlook throughout the year.”

The guidance incorporates a headwind of about 3¢ a share in fiscal 2024 because of lower pension and postretirement benefit income.

The sale of the Emerald nuts business is expected to reduce sales by half a percentage point and shave 1¢ a share from earnings in fiscal 2024.

Additionally, the acquisition of Sovos Brands is expected to close by the end of December 2023, and therefore, is not yet included in the fiscal 2024 outlook.

CAMDEN, NJ. — In a dynamic market where snack foods have long been a consumer favorite, Campbell Soup Co. faces the challenge of navigating recent pressures in the sector.

Despite these pressures, the company highlighted the resilience of its power brands, constituting two-thirds of the business, which continue to perform well in the face of changing consumer dynamics, in a Dec. 6 earnings call with investors.

Mark A. Clouse, chief executive officer, said the company is fueling its snacks growth with its direct-store delivery (DSD) initiatives.

Consumption data reflects a deceleration of volume trends across snack categories.

“There’s a bit more bifurcation within snacking,” Clouse clarified. “I think there are places where we are seeing great pressure, especially segments that are a bit more commoditized … What you are seeing is a step-down on a couple of areas, both at the partner and contract brands.”

Last year at this time, some of the power brands were growing at a robust 20%, Clouse said. Contextually, the two-year picture still indicates double-digit growth.

Campbell Soup’s DSD initiative will take center stage as the company streamlines its logistics and warehouse network. Clouse detailed the three key elements of this transformative initiative, emphasizing the creation of unified snacking DSD logistics.

The company will create one snacking DSD logistics and warehouse network to eliminate redundancies and simplify its processes. Next, the company plans to “modernize and harmonize” its tools, using available technologies to facilitate retailer linkage and in-store insights. In its third prong in DSD, it will focus on routes — including several pilot programs Clouse promised to reveal by the end of the second fiscal quarter.

In particular, the Lance and Late July brands continue to show growth in comparison to the wider portfolio. Clouse attributed the respective dynamics of the brands to consumer dynamics.

“Late July is a premium-added value brand,” he said. “We’re seeing (these) brands doing extremely well … The factor that underpins this is a lot of the decline we’re experiencing, a significant outsized contribution, is coming from low-income households, which index on snacking only at about 20%.”

As such, the low-income household demographic represents a larger portion of declines, as compared to mid- and higher-income households.

He acknowledged the need for vigilance and adaptability.

“I still feel very bullish,” he said. “We’re going to have to stay very vigilant on what consumers are looking for and making sure that we’re positioned well.” 

AUSTIN, MINN. – Hormel Foods Corp. was included in the list of America’s greatest workplaces for diversity in 2024 in a recently published issue of Newsweek magazine.

The list included companies in 78 different industries. Hormel Foods was recognized in the Meat, Poultry & Fish category/Large-size company, with a ranking of four-and-a-half stars out of five, as were Pilgrim’s Pride and Mountaire Farms. In the Food & Beverage Producers category, Peco Foods, Smithfield Foods Inc., Simmons Foods and Campbell Soup Co. were also listed.

“Companies recognize that a diverse workforce contributes significantly to organizational success,” wrote Nancy Cooper, Newsweek global editor in chief in the methodology explanation of the list. “Diverse workforces cultivate creativity and innovation that stem from a mix of perspectives, experiences and backgrounds, fostering a dynamic environment where new ideas come to life.”

“We believe a diverse workforce cultivates an environment filled with unique perspectives that drive innovation and enable us to create a better, more inclusive workplace,” said Katie Larson, senior vice president of human resources at Hormel. “Our 20,000 inspired team members are dedicated to fostering a culture of inclusion, respect, collaboration and belonging. This recognition is a testament to these efforts.”

Antoine Destin, director of diversity, equity and inclusion at Hormel echoed Larson’s sentiments.

“We are very proud to be recognized for our efforts to foster an inclusive and diverse workforce and everything that celebrates the power of bringing together the talents of our unique team members across the world,” he said.

CHARLOTTE, NC. — Shipping disruptions, brought on by militia attacks in the Red Sea and drought problems in the Panama Canal, will impact American food and beverage companies negatively in both exports and imports, according to a Jan. 31 industry overview report from BofA Global Research.

Companies sourcing from Asia facing the greatest risks from shipping disruptions include Keurig Dr Pepper for brewers from Asia and McCormick & Co. for spices from India and Indonesia, the report said. Protein companies, including Tyson Foods Inc., Hormel Foods Corp., and Pilgrim’s Pride Corp., who export to Asia, may be impacted adversely, too, as could Latin American protein companies such as JBS, Marfrig and Minerva Foods.  

Sovos Brands, which the Campbell Soup Co. is in the process of acquiring, also may see shipping delays since it imports its Rao’s Homemade sauce products from Italy through the Mediterranean Sea to the United States, according to the report.

After Houthi militia began attacking commercial ships in the Red Sea last November, some vessels started taking longer, more costly routes around the southern tip of Africa at the Cape of Good Hope, according to a US Energy Information Administration (EIA) report published Feb. 1.

Some oil and natural gas companies are avoiding the Red Sea, according to the EIA. However, a typical voyage from the Persian Gulf to the Amsterdam-Rotterdam-Antwerp petroleum trading hub via the Suez Canal takes 19 days while the Cape of Good Hope route takes nearly 35 days.

The shipping issue in the Red Sea differs from the issue during COVID-19 in which a demand problem led to a scarcity of containers, according to BofA Global Research. There are enough containers now, but they are moving slower. Ships and containers appear to be more detoured than canceled.

The problem will adversely impact the first quarter of the fiscal year for Amsterdam-based Corbion, Olivier Rigaud, chief executive officer, said in a Jan. 31 capital market update.

“In fact, we have some traffic over the Red Sea, and suddenly you have a surcharge on the containers that go through the Red Sea,” he said.

Ships carrying products from the US Gulf Coast to Asia typically pass through the Panama Canal on a trip that lasts nearly a month, according to the EIA. Now, more Very Large Gas Carriers, which primarily carry propane and butane, are going around the Cape of Good Hope, which adds about 21 days.

CAMDEN, NJ. — Campbell Soup Co. expects to complete its acquisition of Sovos Brands Inc. in March, which bodes well for future quarterly financial results.

In the second quarter ended Jan. 28, Campbell Soup had net earnings of $203 million, equal to 68¢ per share on the common stock, which marked a 12% decrease from $232 million, or 78¢ per share, in the previous year’s second quarter.

Net sales fell 1% to $2.46 billion from $2.49 billion. Organic sales also were down 1%. Volume/mix decreased 2%, which offset a net price realization benefit of 1%.

“While it is true that category trends have slowed over the last year, I’m encouraged by a variety of stabilizing consumer indicators like consumer sentiment, household penetration and average categories purchased,” said Mark A. Clouse, president and chief executive officer, in a March 6 earnings call. “However, we are also continuing to see economic pressure impacting select categories and certain consumer demographics. While we expect these trends to improve over time, we’re certainly not there yet.”

 Campbell Soup reaffirmed its full-year outlook of net sales in a range of down 0.5% to up 1.5% when compared to fiscal 2023. The outlook did not include the pending acquisition of Sovos Brands.

“We are eagerly anticipating the closing of the Sovos Brands acquisition in the coming week, adding the best volume-driven growth story in food to our portfolio,” Clouse said.

Plans were announced in August 2023 to acquire Sovos Brands, which manufactures sauces, yogurts and frozen prepared foods marketed under brands such as Rao’s, noosa and Michael Angelo’s. The US Federal Trade Commission in late October sent a second letter to Campbell Soup Co. asking for additional information on the transaction. Both companies have complied with the second request, Clouse said March 6.

Within the company’s Meals & Beverages business, second-quarter sales of $1.38 billion were down 2% from $1.41 billion. Gains in Canada and foodservice partially offset declines in US retail products, primarily in US soup, beverages and Pace Mexican sauces.

Sovos Brands would become part of the Meals & Beverages business.

“When paired with our Meals & Beverages iconic category-leading brands and our distinctive fast-growing Pacific Foods brand, the Sovos Brands portfolio will strengthen the division for years to come,” Clouse said. “In fact, although not an apples-to-apples comparison, if we were to simply overlay Sovos results in the last quarter with our Meals & Beverages results, we would have gained approximately four points of organic top-line growth.”

Within Snacks, sales of $1.07 billion were flat compared to $1.08 billion in the previous year’s second quarter. Excluding the impact from the divestiture of the Emerald nuts business, organic net sales rose 1%, driven by increases in cookies and crackers, primarily Goldfish crackers and Lance sandwich crackers, and in salty snacks. Within salty snacks, sales increases in Kettle Brand and Cape Cod potato chips more than offset declines in Pop Secret popcorn and Late July snacks.

In the six months ended Jan. 28 companywide, net earnings of $437 million, or $1.47 per share on the common stock, were down 17% from $529 million, or $1.77 per share, in the same time of the previous year. Net sales declined 2% to $4.97 billion from $5.06 billion.