Campbell Soup Co. is paying $700 million in cash for an organic broth and soup company, part of its ongoing effort to expand into fast-growing sectors of the food business.
The Camden-based food company said in a news release Thursday that it has entered into an agreement to buy Oregon-based Pacific Foods, which makes organic broth and soup, as well as plant-based beverages and other products.
“This acquisition is consistent with our purpose, ‘Real food that matters for life’s moments,’” Campbell’s CEO and President Denise Morrison said in a prepared statement. “Pacific is an authentic brand with a loyal consumer following. The acquisition allows us to expand into faster-growing spaces such as organic and functional food. Moreover, Pacific Foods is an excellent fit with Campbell — strategically, culturally and philosophically. It advances our strategic imperatives around real food, transparency, sustainability and health and well-being.”
Campbell said the acquisition will help accelerate its efforts to meet consumers’ changing tastes, as well as further its efforts to drive innovation in health and well-being, giving it more access to customers in the $11 billion-plus U.S. natural and organic foods sector.
“Culturally, Campbell and Pacific Foods share similar values and a commitment to a purpose-driven approach,” Morrison said. “Philosophically, both companies believe in making food that we are proud to serve at our own tables using simple, recognizable ingredients.”
Campbell also said it intends to invest in Pacific Foods, including expanding distribution and boosting marketing and research and development. The company will become part of Campbell’s Americas Simple Meals and Beverages division, led by President Mark Alexander. That division includes such brands as Campbell’s, V8, Prego and Plum Organics.
Tulatin-based Pacific Foods, founded in 1987, posted about $218 million in net sales over the 12 months ended May 31. The company will remain based in the Oregon municipality, with co-founder and CEO Chuck Eggert continuing as a supplier of ingredients through his family farms.
“Looking ahead, a future with Campbell means we can maintain what we value while accelerating growth of the brand in a way that we couldn’t do alone, reaching more people while increasing our impact on sustainable agriculture,” Eggert said in a statement.
This is Campbell’s fifth major acquisition in five years, following Bolthouse Farms in 2012, Plum and Kelsen in 2013 and Garden Fresh Gourmet in 2015.
The transaction is subject to customary approvals and conditions.
Pepper Hamilton LLP and Jones Day served as Campbell’s legal counsels, while Pacific Foods was advised by the Rondout Group, with Tonkon Torp LLP as its legal counsel.