What changed in this filing

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Item 1. Business

2023-09-21 compared with 2022-09-22 · 34 added, 35 removed, 100 unchanged (41% of the section changed)

4 unchanged sentences

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

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.”

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.

These businesses were historically included in the Snacks reportable segment.

The results of the European chips business through the date of sale were reflected in continuing operations within the Snacks reportable segment.

In the fourth quarter of 2021, we completed the sale of our Plum baby food and snacks business.

The results of the Plum baby food and snacks business through the date of sale were reflected in continuing operations within the Meals & Beverages reportable segment.

See Note 3 to the Consolidated Financial Statements for additional information on our divestitures.

Our operations, including reportable segments are described below.

Our locations, including manufacturing facilities, within each reporting segment are described in Item 2.

On August 7, 2023, we entered into an agreement to acquire Sovos Brands, Inc.

(Sovos Brands) for $23.00 per share in cash, representing a total enterprise value of approximately $2.7 billion.

The closing of the transaction is subject to customary closing conditions and termination rights, including the approval of Sovos Brands’ shareholders and regulatory approvals.

We plan to finance the acquisition through the issuance of new debt.

For additional information on this pending acquisition, see our Form 8-K filed with the U.S.

Securities and Exchange Commission on August 7, 2023, and Note 19 to the Consolidated Financial Statements.

Reportable Segments

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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.

We refer to the * brands a s our "power brands." The segment includes the retail business in Latin America.

The segment included the results of our Emerald nuts business, which was sold on May 30, 2023.

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.

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.

During 2023, we continued to experience 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.

illness (such as the COVID-19 pandemic), geopolitical conflicts (including the ongoing conflict between Russia and Ukraine), environmental and other sustainability regulations 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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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 2024.

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

As 2023 progressed, we experienced some moderation in input cost inflation, and we expect modestly elevated levels of inflation to continue into 2024.

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

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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 five largest customers accounted for approximately 47 % of our consolidated net sales in 2023 and 2022 and 46% in 2021.

Our largest customer, Wal-Mart Stores, Inc.

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

and its affiliates, accounted for approximately 22 % of our consolidated net sales in 2023 and 2022 and 21 % in 2021.

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

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Trademark registrations generally can be renewed indefinitely as long as the trademarks are in use.

We believe that our principal brands, including Campbell's , Cape Cod , Chunky , Emerald , Goldfish , Kettle Brand , Lance , Late July , Milano , Pace , Pacific Foods , Pepperidge Farm , Pop Secret , Prego , Snack Factory , Snyder's of Hanover , Spaghettios , Swanson , and V8 , are protected by trademark law in the major markets where they are used.

We believe that our principal brands, including Campbell's , Cape Cod , Chunky , Goldfish , Kettle Brand , Lance , Late July , Milano , Pace , Pacific Foods , Pepperidge Farm , Pop Secret , Prego , Snack Factory , Snyder's of Hanover , Spaghettios , Swanson , and V8 , are protected by trademark law in the major markets where they are used.

Although we own a number of valuable patents, we do not regard any segment of our business as being dependent upon any single patent or group of related patents.

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We expect to spend approximately $440 million for capital projects in 2024.

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.

Major capital projects based on planned spend in 2024 include capacity expansions and a new production line for our Snacks business, network optimization for our Meals & Beverages business, upgrades of assets across both segments of the business, and enhancements to our headquarters in Camden, New Jersey relating to our Snacks office consolidation.

Government Regulation

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Human Capital Management

A core pillar of our strategic plan is to build a winning team and culture.

One of the core pillars of our strategic plan is to build a winning team and culture.

To do this, we are committed to building a company where everyone can be real, and feel safe, valued and supported to do their best work.

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Connecting people through food they love .

In 2023, we approved a plan to bring together all of our corporate team members from our Snacks offices in Charlotte, North Carolina and Norwalk, Connecticut to our headquarters in Camden, New Jersey.

This move is intended to foster closer collaboration and enhance decision-making, thereby improving our ability to execute our business strategy.

We have also recently introduced a new Employee Value Proposition, Make history with Campbell’s, to enhance our focus on building a winning team and culture.

On July 30, 2023, we had approximately 14,500 employees.

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Our education programs allow employees to focus on timely and topical development areas including leadership, management excellence, functional capabilities and inclusion and diversity.

We communicate frequently and transparently with our employees through regular company-wide and business unit check-ins, and we conduct employee engagement surveys that provide our employees with an opportunity to share anonymous feedback with management in a variety of areas including confidence in leadership, growth and career opportunities, available resources, compensation and overall engagement.

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

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.

Our Campbell Employee Experience 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

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• 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.

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

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.

Throughout 2023 the board of directors received regular updates from management on our inclusion and diversity efforts.

Wellness and Safety

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

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.

We promote a strong culture of safety and prioritize keeping all our employees, contractors and visitors safe.

To accomplish this, we employ comprehensive health, safety and environment management policies and standards throughout the organization.

In addition, we strive to continuously improve our work processes, tools and metrics to reduce workplace injuries and enhance safety.

We provide a workplace that develops, supports and motivates our people.

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.

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

Total Rewards

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Performance discussions for salaried employees are conducted throughout the year to assess contributions and inform individual development plans.

We have enhanced our focus on the employee experience by highlighting key moments in the employment life-cycle and providing enhanced communications about our comprehensive offerings.

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

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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