New Campbell Chief Says Divestitures ‘Inevitable’

Campbell Soup Co.’s new chief executive, David Johnson, took the helm Monday, saying that big changes are in store for the embattled soup maker.

Johnson, 57, who comes to Campbell after two years as chief executive of Gerber Products Co., said at a news conference at Campbell headquarters that “there will inevitably be divestitures, there will inevitably be redundancies” as he battles to boost Campbell’s laggard returns and keep the 120-year-old company independent.

Commenting on suggestions in an internal Campbell publication that it would be business as usual under his command, Johnson said: “I don’t think with David Johnson around there’s a hope in hell of that being the way that the future will unfold.”

He declined to identify specific plans but said improving Campbell’s results was the best means of ensuring its independence.

Johnson, a highly regarded food industry executive and corporate turnaround specialist, is the first outsider to lead Campbell. He was appointed Jan. 3.

The outgoing Australian-born executive must contend with a faction of Campbell’s controlling Dorrance family that seeks to sell its 17% share in the world’s largest soup maker and encourage the company’s sale.

Another Dorrance faction, holding a 33.5% stake, wants to keep Campbell under family control. Altogether, the Dorrances control 58% of Campbell.

Johnson said he had not yet met with most of the dissident Dorrance shareholders but added: “I want the opportunity to talk with them, to share with them and above all I want to listen.

“What I’d like to see is the possibility of time to see how we can really change the results and performance of the company,” Johnson said.

Members of the dissident Dorrance family group have said Johnson’s appointment did not alter their wish to sell their stake. Family members were unavailable for comment on Johnson’s remarks Monday.

Turnaround efforts at Campbell could start becoming apparent in a year, Johnson said, but he added that placating unhappy shareholders will require long-term profit improvement.

At Gerber, Johnson sold unprofitable businesses and re-emphasized the company’s core baby food business. In his two years at the Fremont, Mich., company, earnings tripled and the stock price doubled.

Analysts have said Johnson may move to sell Campbell’s relatively lackluster Mrs. Paul’s Kitchens frozen fish unit and some international operations.

Johnson said acquisitions were also possible, but not merely for the sake of increasing Campbell revenue.

Asked if he would consider a friendly merger with another major food company, he said he saw such a move only if “Campbell remained an independent entity and in charge of its future.”