Campbell's Will Boost Earnings Per Share And International Sales With Plum Organics Acquisition

May 27, 2013 1:33 AM ETCampbell Soup Company (CPB)
Chris Katje profile picture
Chris Katje

Less than a month after Hain Celestial (HAIN) scooped up baby food maker Ella's Kitchen, Campbell Soup Company (NYSE:CPB) has made a similar acquisition. Campbell's scooped up popular organic food brand Plum Organics. The new acquisition will boost Campbell's presence in the children's food segment and will help grow revenue and earnings per share going forward.

Plum Organics, founded in 2007, is the number two brand of organic baby food in the United States. Overall, Plum is the number four baby food overall in the United States. Plum Organics offers food and snacks in the baby and toddler sector. According to the press release, baby food is a $2 billion market. The category has grown 43% annually over the 2010-2012 period.

Campbell's currently owns brands in the soup, beverage, and snack categories aimed at children. Denise Morrison, president and chief executive officer of Campbell's, had this to say of the acquisition, "Plum Organics' nutritious, on-trend products are a great addition to our North American portfolio of leading brands. It represents another step toward our long-term goal of shifting Campbell's center of gravity."

One area of growth for Campbell's through the acquisition will be international expansion. Plum Organics offers over 150 products, but only sells in the United States and United Kingdom. Impressively enough, Plum Organics has sold 200 million products since its founding. Campbell will now shift to getting Plum Organics on shelves overseas alongside its own children's brands like V8 juice and Goldfish crackers.

In 2012, Plum Organics had $93 million in sales. Campbell's said Plum Organics would not affect 2013 sales, but I am curious to hear how it will impact earnings in 2014. Hain Celestial estimated a positive impact of $0.05 to $0.08 per share in earnings from Ella's Kitchen. That came from a company that generated $70 million in 2012 sales. The deal is expected to

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Chris Katje profile picture
Chris Katje is an investor from Grand Rapids, Michigan. Chris is on Twitter @chriskatje Facebook Page:

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