What changed in this filing

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Item 1. Business

2024-09-19 compared with 2023-09-21 · 50 added, 42 removed, 92 unchanged (50% of the section changed)

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

On March 12, 2024, we completed the acquisition of Sovos Brands, Inc.

(Sovos Brands) for total purchase consideration of $2.899 billion.

For additional information on this acquisition, see Note 3 to the Consolidated Financial Statements.

On August 26, 2024, we completed the sale of our Pop Secret popcorn business.

For additional information on the divestiture, see Note 21 to the Consolidated Financial Statements.

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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V8 juices and beverages;

and Campbell’s tomato juice.

Campbell’s tomato juice;

and as of March 12, 2024, Rao's pasta sauces, dry pasta, frozen entrées, frozen pizza and soups;

Michael Angelo's frozen entrées and pasta sauces;

and noosa yogurts.

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, and other snacking products in retail in the U.S.

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.

The segment included the results of our Emerald nuts business, which was sold on May 30, 2023 and our Pop Secret popcorn business, which was sold on August 26, 2024.

See Note 7 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.

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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 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.

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), geopolitical conflicts (including the ongoing conflict between Russia and Ukraine), environmental and other sustainability regulations and other factors that may be beyond our control.

During 2024, we experienced moderately 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.

events, water scarcity, scarcity of suitable agricultural land, scarcity of organic ingredients, pandemics or other local or global health issues, geopolitical conflicts, 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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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.

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.

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

We are unable to predict the impact of our ability to source these ingredients and packaging materials in the future, and certain supply pressures may continue throughout 2025.

We expect input cost inflation in 2025 to remain at similar levels as 2024, as we continue to see improvement across certain ingredients and packaging materials;

however, we could experience unexpectedly high input cost inflation in various categories.

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 in 2023 and 2022 and 46% in 2021.

Our five largest customers accounted for approximately 47 % of our consolidated net sales in 2024, 2023, and 2022.

Our largest customer, Wal-Mart Stores, Inc.

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

and its affiliates, accounted for approximately 22 % of our consolidated net sales in 2024, 2023, and 2022.

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

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We believe our trademarks are of material importance to our business.

Although the laws vary by jurisdiction, trademarks generally are valid as long as they are in use and/or their registrations are properly maintained and have not been found to have become generic.

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 , 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 the laws vary by jurisdiction, trademarks generally remain valid and can be renewed indefinitely as long as they are in use and/or their registrations are properly maintained, and they have not become generic.

We believe that our principal brands, including Campbell's , Cape Cod , Chunky , Goldfish , Kettle Brand , Lance , Late July , Milano , Pace , Pacific Foods , Pepperidge Farm , Prego , Rao's, 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 $530 million for capital projects in 2025.

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.

Major capital projects based on planned spend in 2025 include network optimization for our Meals & Beverages business, finalization of capacity projects for our Snacks business, enhancements to our headquarters in Camden, New Jersey, implementation of our existing SAP enterprise-resource planning system for Sovos Brands and network wastewater initiatives.

We estimate that approximately $25 million of the capital expenditures anticipated during 2025 will be for the initial phase of upgrades to our Napoleon, Ohio wastewater treatment facility, with another $20 million for other network wastewater initiatives.

Government Regulation

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

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.

Additionally, we are subject to packaging and labeling regulations, data privacy and security regulations, tax and securities regulations, import 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

We have requirements for the operation and design of our facilities that meet or exceed applicable environmental rules and regulations.

Of our $517 million in capital expenditures made during 2024, approximately $15 million were for compliance with environmental laws and regulations in the U.S.

We further estimate that approximately $20 million of the capital expenditures anticipated during 2024 will be for compliance with U.S.

environmental laws and regulations.

We further estimate that approximately $25 million of the capital expenditures anticipated during 2025 will be for upgrades to our Napoleon, Ohio wastewater treatment facility, with another approximately $20 million for other network wastewater initiatives.

Additionally, we anticipate spending approximately $10 million for compliance with U.S.

environmental laws and regulations during 2025.

We believe that the continued compliance with existing environmental laws and regulations (both within the U.S.

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While the impact of these laws and regulations cannot be predicted with certainty, we do not believe that compliance with these laws and regulations will have a material effect on capital expenditures, earnings or our competitive position.

See Note 18 to the Consolidated Financial Statements for additional information regarding certain environmental matters.

Demand for soup products is seasonal, with the fall and winter months usually accounting for the highest sales volume.

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Human Capital Management

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

One of the five areas of our strategic framework is to build a Top Team.

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.

We have recently completed our 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 has helped to foster closer collaboration and enhance decision-making, thereby improving our ability to execute our business strategy.

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

On July 28, 2024, we had approximately 14,400 full-time and part-time 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 and support our culture of continuous learning.

We have partnered with leading online content experts and 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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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 and overall engagement.

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

In addition, in 2024, we launched a new initiative, Campbell’s Way of Leadership , to help our employees develop leadership skills and drive the growth of our business.

As of July 28, 2024, we have trained approximately 50% of our supervisory and management population in Campbell’s Way of Leadership programs.

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

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;

A key to our success is our ability to attract and retain top talent in all areas of our business.

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

Our inclusion and diversity (I&D) efforts are focused around three pillars:

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

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

Each pillar has focus areas and initiatives designed to further its objectives.

Together, these activities create a holistic approach to I&D across the company.

To support these pillars, we have developed strategies focused on building a pipeline of diverse talent through expanded recruitment efforts, I&D learning opportunities, internal talent development and leveraging our employee resource groups.

Throughout 2024 the board of directors received regular updates from management on our I&D efforts.

Wellness and Safety

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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 have established a hybrid work policy to allow office-based employees to work remotely several days per week.

We continue to modernize our workspaces and have 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 reports 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 Investors portion of this website (under the "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