* CEO Conant to step down on July 31, 2011
* Denise Morrison named COO, is expected to become CEO
* Campbell stock down slightly in after hours
(Adds comments from CEO, analyst; byline)
By Martinne Geller
NEW YORK, Sept 28 Campbell Soup Co (CPB.N) said
on Tuesday that Chief Executive Douglas Conant would step down
next summer after more than a decade leading the world's
largest soup maker.
Conant, 59, plans to leave on July 31, 2011, the end of the
company's current fiscal year. He became CEO in January 2001.
Denise Morrison, president of Campbell's' North American
soup, sauces and beverages business, was named executive vice
president and chief operating officer, effective October 1, and
she is expected to succeed Conant as chief executive at the
start of fiscal 2012, the company said.
Campbell shares fell 0.6 percent to $36.20 in light trading
The timing of the announcement was surprising given that
the weather is turning colder, marking the start of soup's key
selling season, and the company is in the middle of a battle to
revitalize its North American soup business, analysts said.
But Morrison, 56, had been expected to succeed Conant
eventually, said Jack Russo, an analyst at Edward Jones.
"If you look at her track record, she has had a ton of
experience in the industry," Russo said, noting her stints at
Kraft Foods Inc KFT.N, PepsiCo Inc (PEP.N) and Procter &
Gamble Co (PG.N).
Morrison, who first joined Campbell in 2003 as chief
customer officer, has helped boost sales in products like V8
But the North American soup business has struggled amid
tough competition from the makers of frozen foods and other
simple meals. Campbell has reduced sodium in its soups and
overhauled its Chunky soup line, but sales remain challenged.
"There was some frustration with the economy slowing and
people getting more thrifty and eating at home that the
category didn't do better," Russo said.
Campbell shares fell 3 percent earlier this month after it
posted lower-than-expected quarterly sales and gave a
disappointing sales outlook for the new year, after U.S. soup
sales fell 5 percent in the quarter ended Aug. 1.
Since January 2001 when Conant, then-president of Nabisco
Foods, was named CEO, Campbell's shares have gained nearly 11
percent. By contrast, the Standard & Poor's 500 Index .SPX is
down 16 percent.
In an interview, Conant said that when he took over,
Campbell was "the poorest performing food company of the 19
largest food companies in the world."
"I was hired to renew the company and rebuild it. And ten
years later I can look back and say I've done my job," he said.
"It's a good time to move on."
Conant suffered broken ribs in a car accident in July 2009.
He had surgery and continued to lead the company.
He said he will focus on the upcoming soup season and
making a smooth transition. He declined to specify his future
plans, and only said: "I'm finished being a CEO, but I'll never
Under Conant, Campbell sold the Godiva chocolate business
and focused more on soup, drinks and sauces and baked goods.
Despite new marketing and healthier soup reformulations,
analysts have said Campbell was slow to stabilize declines in
its iconic red-and-white labeled condensed soups, as consumers
opted for the convenience of ready-to-eat soups before the
Conant said Morrison -- whom he has known for some 15
years, having recruited her to Nabisco and to Campbell -- is
"the perfect candidate" for the top job.
"If I was to describe Denise in a nutshell, I'd say she's
tough-minded on standards of performance and tender-hearted
with people," he said. "It's a real unique blend."
COMPANY AT A CROSSROADS
Given the recent poor performance of soup, Morrison is a
surprising choice for CEO, said Janney Montgomery Scott analyst
Jonathan Feeney. He also cited the operational difficulties of
replacing a manager on the brink of the busiest season.
"Perhaps maintaining current operational leadership was the
prudent choice," Feeney said in a research note. However, he
said the timing could indicate a greater sense of urgency.
Ken Harris, chief executive of consulting firm Kantar
Retail Americas, said the big question now was what Campbell
will look like "in the next generation".
Campbell, based in Camden, New Jersey, was weighing a bid
for Britain's United Biscuits, a source familiar with the
situation told Reuters last month. [ID:nN23201437]
"They are at an inflection point," said Harris, whose firm
works with food makers and sellers. He said there may be
opportunities for Campbell to buy another firm or be bought.
"There's a lot of M&A activity right now. They're
well-positioned," Harris said. "For them, sitting on the
sidelines is not a good option."
(Additional reporting by Brad Dorfman in Chicago and Lisa
Baertlein in Los Angeles; Editing by Steve Orlofsky, Bernard