What changed in this filing

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Item 1. Business

2022-09-22 compared with 2021-09-23 · 33 added, 44 removed, 102 unchanged (43% of the section changed)

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Our principal executive offices are in Camden, New Jersey 08103-1799.

Business Acquisitions and Divestitures

In 2018, we acquired Pacific Foods of Oregon, LLC and Snyder's-Lance, Inc.

(Snyder's-Lance).

In 2019, we announced our plan to divest our Campbell Fresh operating segment and our international biscuits and snacks operating segment.

In 2019, we sold our U.S.

refrigerated soup business, our Garden Fresh Gourmet business and our Bolthouse Farms business.

Within our international biscuits and snacks operating segment, we completed the sale of our Kelsen business on September 23, 2019.

Business Divestitures

We completed the sale of our Kelsen business on September 23, 2019.

On December 23, 2019, we completed the sale of our Arnott’s business and certain other international operations, including the simple meals and shelf-stable beverages businesses in Australia and Asia Pacific (the Arnott’s and other international operations).

In addition, on October 11, 2019, we completed the sale of our European chips business.

We used the net proceeds from the sales to reduce debt as described below in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.” To support our more focused portfolio, we are pursuing multi-year cost savings initiatives with targeted annualized cost savings of $850 million from continuing operations by the end of 2022, which includes $295 million in synergies and run-rate cost savings from our acquisition of Snyder's-Lance.

See "Management's Discussion and Analysis of Financial Condition and Results of Operations" for additional information regarding our cost savings initiatives.

refrigerated soup business, our Garden Fresh Gourmet business and our Bolthouse Farms business were historically included in the Campbell Fresh segment.

Beginning in the third quarter of 2019, we have reflected the results of operations of these businesses as discontinued operations in the Consolidated Statements of Earnings for all periods presented.

Beginning in the fourth quarter of 2019, we have reflected the results of operations of our Kelsen business and the Arnott’s and other international operations (collectively referred to as Campbell International) as discontinued operations in the Consolidated Statements of Earnings for all periods presented.

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Our reportable segments are:

• Meals & Beverages, which includes the retail and foodservice businesses in the U.S.

• Meals & Beverages, which consists of our soup, simple meals and beverages products in retail and foodservice in the U.S.

The segment includes the following products:

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Pace Mexican sauces;

Campbell’s gravies, pasta,

beans and dinner sauces;

Campbell’s gravies, pasta, beans and dinner sauces;

Swanson canned poultry;

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and Campbell’s tomato juice.

The segment also included the results of our Plum baby food and snacks business, which was sold on May 3, 2021;

• Snacks, which consists of Pepperidge Farm cookies, crackers, fresh bakery and frozen products in U.S.

retail, including Pepperidge Farm Farmhouse* cookies and bakery products, Milano* cookies and Goldfish* crackers;

and Snyder’s of Hanover* pretzels, Lance* sandwich crackers, Cape Cod* and Kettle Brand* potato chips, Late July* snacks, Snack Factory pretzel crisps ,* Pop Secret popcorn, Emerald nuts, and other snacking products in retail and foodservice in the U.S.

The segment includes the retail business in Latin America.

This segment also included the results of our European chips business, which was sold on October 11, 2019.

We refer to the * trademarks a s our "power brands."

Beginning in 2022, the foodservice and Canadian portion of Snacks will be managed as part of Meals & Beverages .

See Note 6 to the Consolidated Financial Statements and "Management's Discussion and Analysis of Financial Condition and Results of Operations" for additional information regarding our reportable segments.

The segment also includes snacking products in foodservice and Canada.

The segment included the results of our Plum baby food and snacks business, which was sold on May 3, 2021;

• Snacks, which consists of Pepperidge Farm cookies*, crackers, fresh bakery and frozen products, including Goldfish crackers*, Snyder’s of Hanover pretzels*, Lance sandwich crackers*, Cape Cod potato chips *, Kettle Brand potato chips * , Late July snacks*, Snack Factory pretzel crisps* , Pop Secret popcorn, Emerald nuts, and other snacking products in retail in the U.S.

Beginning in 2022, we refer to the * brands a s our "power brands." The segment includes the retail business in Latin America.

The segment also included the results of our European chips business, which was sold on October 11, 2019.

Beginning in 2022, the foodservice and Canadian business formerly included in our Snacks segment is now managed as part of the Meals & Beverages segment .

Segment results have been adjusted retrospectively to reflect this change.

See Note 6 to

the Consolidated Financial Statements and "Management's Discussion and Analysis of Financial Condition and Results of Operations" for additional information regarding our reportable segments.

Ingredients and Packaging

The ingredients and packaging materials required for the manufacture of our food and beverage products are purchased from various suppliers, substantially all of which are located in North America.

In the later part of 2021 and the early part of 2022, the costs of labor, raw materials, energy, fuel, packaging materials and other inputs necessary for the production and distribution of our products have rapidly increased.

In addition, many of these items are subject to price fluctuations from a number of factors, including but not limited to climate change, changes in crop size, cattle cycles, herd and flock disease, crop disease, crop pests, product scarcity, demand for raw materials, commodity market speculation, energy costs, currency fluctuations, supplier capacities, government-sponsored agricultural programs and other government policy, import and export requirements (including tariffs), drought and excessive rain, temperature extremes and other adverse weather events, water scarcity, scarcity of suitable agricultural land, scarcity of organic ingredients, pandemic illness (such as the COVID-19 pandemic) and other factors that may be beyond our control during the growing and harvesting seasons.

During 2022, we experienced significantly elevated commodity and supply chain costs including the costs of labor, raw materials, energy, fuel, packaging materials and other inputs necessary for the production and distribution of our products.

In addition, many of these items are subject to price fluctuations from a number of factors, including but not limited to climate change, changes in crop size, cattle cycles, herd and flock disease, crop disease, crop pests, product scarcity, demand for raw materials, commodity market speculation, energy costs, currency fluctuations, supplier capacities, government-sponsored agricultural programs and other government policy, import and export requirements (including tariffs), drought and excessive rain, temperature extremes and other adverse weather events, water scarcity, scarcity of suitable agricultural land, scarcity of organic ingredients, pandemic illness (such as the COVID-19 pandemic), armed hostilities (including the ongoing conflict between Russia and Ukraine) and other factors that may be beyond our control.

To help reduce some of this price volatility, we use a combination of purchase orders, short- and long-term contracts, inventory management practices and various commodity risk management tools for most of our ingredients and packaging.

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Since many ingredients of suitable quality are available in sufficient quantities only during certain seasons, we make commitments for the purchase of such ingredients in their respective seasons.

In addition, certain of the materials required for the manufacture of our products, including steel and aluminum, have been or may be impacted by tariffs.

Although we are unable to predict the impact of our ability to source these ingredients and packaging materials in the future, we expect these supply pressures to continue throughout 2023.

We also expect the pressures of input cost inflation to continue into 2023.

For information on the impact of inflation, see "Management’s Discussion and Analysis of Financial Condition and Results of Operations."

In most of our markets, sales and merchandising activities are conducted through our own sales force and/or third-party brokers and distribution partners.

Our products are generally resold to consumers through retail food chains, mass discounters, mass merchandisers, club stores, convenience stores, drug stores, dollar stores, e-commerce and other retail, commercial and non-commercial establishments.

Each of Pepperidge Farm and Snyder's-Lance also has a direct-store-delivery distribution model that uses independent contractor distributors.

We make shipments promptly after acceptance of orders.

Our Snacks segment has a direct-store-delivery distribution model that uses independent contractor distributors.

Our five largest customers accounted for approximately 47 % of our consolidated net sales from continuing operations in 2022, 46% in 2021 and 44% in 2020.

Our largest customer, Wal-Mart Stores, Inc.

and its affiliates, accounted for approximately 21 % of our consolidated net sales from continuing operations in 2021 and 2020 and 20 % 2019.

and its affiliates, accounted for approximately 22 % of our consolidated net sales from continuing operations in 2022 and 21 % in 2021 and 2020.

Both of our reportable segments sold products to Wal-Mart Stores, Inc.

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We expect to spend approximately $325 million for capital projects in 2023.

Major capital projects based on planned spend in 2022 include a chips and cracker capacity expansion for our Snacks business and a new manufacturing line for our Meals & Beverages business.

Major capital projects based on planned spend in 2023 include a cracker capacity expansion for our Snacks business and a new manufacturing line for our Meals & Beverages business.

Government Regulation

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Our business is also regulated by similar agencies outside of the U.S.

We believe that we are in compliance with such laws and regulations in all material respects and do not expect that continued compliance with such laws and regulations will have a material effect on capital expenditures, earnings or our competitive position.

Additionally, we are subject to data privacy and security regulations, tax and securities regulations, accounting and reporting standards, and other financial laws and regulations.

We believe that we are in compliance with current laws and regulations in all material respects and do not expect that continued compliance with such laws and regulations will have a material effect on capital expenditures, earnings or our competitive position.

Environmental Matters

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Connecting people through food they love .

On August 1, 2021, we had approximately 14,100 employees.

On July 31, 2022, we had approximately 14,700 employees.

Training, Development and Engagement

We invest in our employees through training and development programs.

We have partnered with leading online content experts and have recently increased internal learning development to expand our catalog of courses.

We have partnered with leading online content experts and have recently increased internal learning development to expand our catalog of courses and support our culture of continuous learning.

A suite of training and education programs are available to employees ranging from role-specific training to education on soft skills to assist them with enhancing their careers through continuous learning.

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These surveys allow our leaders to develop action plans for their business units as well as the broader organization.

In 2021, we created the Campbell Employee Experience Framework to enhance the foundational moments that are key to an employee's career at our company - from the candidate experience and onboarding through career advancement - with a focus on ways of working and improving culture and inclusivity.

Our Campbell Employee Experience Framework enhances the foundational moments that are key to an employee's career at our company - from the candidate experience and onboarding through career advancement - to help our employees thrive at work, with the goal of building an inclusive, engaging and high-performing culture.

Inclusion and Diversity

We believe that having an inclusive and diverse culture strengthens our ability to recruit talent and allows all employees to thrive and succeed.

Diversity of input and perspectives is an essential part of our strategic plan to build a winning team and culture and we are committed to recruiting, retaining and developing a workforce that reflects the diversity of the consumers we serve.

In 2021, we accelerated our inclusion and diversity efforts and elevated work in these areas on an enterprise-wise level.

We continued to build out the actionable and holistic inclusion and diversity strategy we introduced in 2020 by focusing our refined strategy on three guiding pillars:

• Capabilities - providing resources and tools to employees to build capabilities to build a winning team a culture and to drive systemic change;

We believe that having an inclusive and diverse culture strengthens our ability to recruit and develop talent and allows all employees to thrive and succeed.

Diversity of input and perspectives is an essential part of our strategic plan to build a winning team and culture, and we believe one key to success is attracting and retaining a diverse workforce that reflects our consumers of today and tomorrow.

Our commitment to inclusion and diversity ("I&D") is based on three guiding pillars:

• Capabilities - providing resources and tools to employees to build capabilities to build a winning team and culture and to drive systemic change;

• Advocacy - strengthening ally networks by supporting our employees, our partners and the communities where we live and work;

• Accountability - having individual, management and organizational accountability and transparency about our progress on building an inclusive culture.

We also continue to provide inclusion and diversity training for employees to highlight issues that impact underrepresented communities.

We also continue to provide I&D learning experiences and foster employee resource groups to highlight issues that impact underrepresented communities.

Throughout 2022 the board of directors (Board) received regular updates from management on our inclusion and diversity efforts.

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Our employees' health, safety and well-being are our top priorities.

In response to the emergence of COVID-19, we implemented an enterprise-wise response to ensure safety.

We enacted safety and sanitation measures to help ensure employees' health and well-being, embraced remote work for those who were able, and introduced enhanced sanitation, mask use, temperature checks and other protective equipment protocols and social distancing measures for our front-line employees.

We have maintained an unwavering commitment to supporting the health and well-being of our employees during the COVID-19 pandemic and we implemented an enterprise-wise response to ensure safety.

We have implemented safety and sanitation measures to help ensure employees' health and well-being, embraced remote work for those who were able, and introduced enhanced sanitation, mask use and other protective equipment protocols and social distancing measures for our front-line employees.

In addition, our Resources for Living program provides information, education tools and resources to help support our employees' physical, financial, social and emotional well-being.

As part of this focus on well-being, we emphasize the need for our employees to embrace healthy lifestyles and we offer a variety of wellness education opportunities for our employees.

We continue to modernize our workspaces and in 2022 announced a hybrid work policy to allow office-based employees to work remotely several days per week.

Total Rewards

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Our primary corporate website can be found at www.campbellsoupcompany.com .

We make available free of charge at the Investor portion of this website (under the "About Us—Investors—Financials—SEC Filings" caption) all of our reports (including amendments) filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, including our annual report on Form 10-K, our quarterly reports on Form 10-Q and our current reports on Form 8-K.

We make available free of charge at the Investor portion of this website (under the "About Us—Investors—Financials—SEC Filings" caption) all of our reports (including amendments) filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, including our annual reports on Form 10-K, our quarterly reports on Form 10-Q and our current reports on Form 8-K.

These reports are made available on the website as soon as reasonably practicable after their filing with, or furnishing to, the Securities and Exchange Commission.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business