Of all the changes announced in the past few weeks by the Campbell Soup Co., the most revealing one is this: the company has hired a former Amazon executive to lead a new e-commerce division.
Yes, Campbell, the 148-year-old soup company, wants to sell more food over the internet. And it’s relying on Shakeel Farooque, who held a range of roles at Amazon before taking jobs at eBay and Kohl’s, to help it figure out how.
The strategy will almost certainly include taking advantage of Campbell’s $10 million investment in meal-kit company Chef’d and its $32 million investment in Habit, a high-tech meal kit company that designs customers’ diets by analyzing their blood. It also will involve building a network of new distribution centers—the first ones will be in California and Texas—dedicated to online orders, the company said at the investor conference.
“One need not look any further than Amazon’s proposed acquisition of Whole Foods, the expansion of Aldi and Lidl, or the Blue Apron IPO for evidence of the changing retailer landscape,” Campbell’s CEO, Denise Morrison, said at a July 19 investor meeting. “In this environment, companies and brands must differentiate themselves or risk extinction.”
One of the companies that has been the best at this, of course, is Amazon, which upended the books business before moving onto categories like fashion and groceries—leaving a trail of has-beens in its wake but also inspiring a new generation of companies to move in with disruptive ideas of their own. The technology-enabled revolution isn’t lost even on soup-company executives.
“It happened in entertainment, it happened in apparel and now, it’s happening in food,” said Campbell’s US president Mark Alexander.
The percentage of food sold online today is in the low single digits, but by 2021 it’s expected to be a $66 billion business on its own. That’s why Campbell’s new distribution centers will be operated differently than its existing warehouses, which are used to fill orders for supermarkets. Instead, the new warehouses will focus on e-commerce entirely, focusing on ways to customize the way it packages its products for different channels, be it in a meal kit or an online grocery order.
Sound familiar? Amazon founder and CEO Jeff Bezos has long been obsessed with revolutionizing how quickly customer orders get to their front doors. That has included building out a sprawling empire of high-tech, robot-heavy warehouses for fast delivery. Campbell’s hopes that similar strategizing will help it stay ahead of the e-commerce curve, transforming the business of soup into a lot more than a warm meal on a cold day.