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Campbell Soup aims at China, Russia

July 10, 2007|From Reuters

Campbell Soup Co. laid out plans Monday to start selling its iconic soups in Russia and China, the world's largest soup consuming markets and two of its fastest-growing economies.

Camden, N.J.-based Campbell, which pared back its international business in recent years to focus on boosting sales in North America, said soup servings in Russia and China far exceeded those of the United States, representing a big opportunity for the company to increase revenue.

In the U.S., about 14 billion servings of soup are consumed each year, Campbell said, compared with about 32 billion in Russia and about 320 billion in China.

But, nearly all of the soup consumed in Russia and China is homemade, and some analysts are skeptical about how well premade soups from an American company will sell.

Campbell said it ran into suspicion in Russia while testing some of its premade products.

"Consumers would tell us they could taste the metal of the machine that made the product, or that it was most likely just a reconstituted bouillon cube," said Chris Delaney, Campbell's president of emerging markets, in an investor presentation broadcast on the Internet. He added that Russian consumers had said ready-to-serve soups "had no soul."

As a result, Campbell plans to enter Russia and China beginning in October with products such as broths and soup bases that aim to make old-fashioned homemade soup preparation easier.

The company's entrance into both markets comes as income levels are rising and consumers look for convenience, Chief Executive Douglas Conant said.

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