Campbell Soup Company's businesses will be organized in three new divisions structured mainly by product categories rather than by geographies or brand groups.
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Each division will have meaningful scale, a clearly defined role in the company's portfolio, and appropriate targets for growth.
Americas Simple Meals and Beverages, the largest division, will include Campbell's current U.S. Retail and foodservice businesses, Plum Organics, and the company's simple meals and shelf-stable beverage businesses in Canada, Mexico and Latin America.
With aggregate net sales of approximately $4.5 billion, the businesses that will comprise this new division represented 55% of total company sales and generated about 70% of total operating earnings in fiscal 2014.
Global Biscuits and Snacks will unify the Pepperidge Farm, Arnott's and Kelsen businesses into a fully integrated global biscuits and snacks portfolio.
The company's simple meals and beverage businesses in Asia Pacific and Asia, including its soup and broth business in Hong Kong and China, and Pepperidge Farm's U.S. bakery business, will also be operated within this division. With approximately $2.8 billion in net sales, the businesses that will be part of this new division generated about 33% of company sales and 25% of operating earnings in fiscal 2014.
Packaged Fresh will focus on building scale and accelerating growth in rapidly expanding packaged fresh categories across the retail perimeter. It will include Bolthouse Farms' portfolio of fresh carrots, super-premium beverages and salad dressings, as well as Campbell's retail refrigerated soup business.
These businesses accounted for approximately $1 billion of net sales – about 11% of company sales – and generated 5% of company operating earnings in fiscal 2014.
The division operating earnings above exclude unallocated corporate expenses and items impacting comparability, and are based on historical expense allocations.
As part of its planning for the new enterprise structure, Campbell has also been rigorously re-examining its cost structure and organization design.
Based on this analysis, the company believes it has identified opportunities to reduce its annual overhead expenses over time by at least $200 million, or 2-3% of its annual sales, over and above the savings delivered through its longstanding annual productivity program. ■