President and Chief Executive Officer at Campbell Soup
Thanks, Rebecca. Good morning and thank you for joining us today. On behalf of Campbell's leadership, I want to begin by thanking the teams for all their hard work this year, by maintaining focus on the factors we can control, we delivered solid fourth quarter and full year results, while advancing our strategic plan to deliver sustainable profitable growth. The teams executed with excellence across the company. We improved supply chain performance and implemented effective revenue management to counter inflation, all while demand for our portfolio of brands remained elevated.
Importantly, we did what we said we were going to do. We delivered on the high end of our original full year fiscal 2022 adjusted EPS guidance. We accomplished this despite the volatile environment we're in and with the momentum we built throughout the year, we're confident in our ability to continue to deliver in fiscal 2023. Let me start with the fourth quarter.
We delivered strong growth across all three key metrics net sales, adjusted EBIT and adjusted EPS, driven by continued improvement in our supply chain execution, sustained consumer demand and our successful efforts to mitigate inflation. Organic net sales increased 6% versus the prior year due to net price realization, continued elevated consumer demand and significantly improved supply. Adjusted EBIT and adjusted EPS both returned to growth due to successful inflation mitigation and cost management.
For the full-year, organic net sales grew 2% and we delivered adjusted EPS of $2.85. As expected, adjusted EBIT decreased due to challenging inflationary pressures and our commitment to protect critical brand investments. Our financial results reflect the strong in-market performance of our brands. Fourth quarter consumption was up 8% versus the prior year and up 21% compared to three years ago. For the full year, consumption was up 4% versus the prior year and up 14% versus three years ago. The sustained strength of our portfolio continues to signal great growth potential for the future.
On Slide 8, I'd like to talk about a few of the reasons why Campbell's is well positioned for the consumer and economic environment as we head into fiscal 2023.-First, our brands are in categories that excel during challenging economic times. Consumers tend to seek out the better value our Meals and Beverages portfolio delivers, while the resiliency of snacking has been consistent in prior economic downturns. Also we're not solely dependent on pricing to manage inflation, we've already delivered $850 million of multi-year cost savings and we're tracking to $1 billion by fiscal 2025.
Our supply chain transformation continues as well, as we address both short term and longer-term challenges and are performing substantially better than even earlier in the year. In fact, service levels in the fourth quarter improved by approximately 15 points compared to the first half of fiscal 2022. We've delivered strong innovation with a focus on relevant, differentiated and value-driven platforms. We saw a 2% contribution from innovation in fiscal 2022 and have our most robust pipeline yet for fiscal 2023.
For our US soup business, innovation contributed 3% of net sales in fiscal 2022, demonstrating the opportunity for innovation in this strengthening category. Let me now turn to another strong proof point of our progress which are the share results for our brands, as we emerge from the last three years of the pandemic influence. We are pleased with the fact that share for most of our key brands across our portfolio continue to remain at or above fiscal 2019 levels. While as we expected in the fourth quarter, we have experienced some select share pressure, this sustained share growth versus pre-pandemic levels is a positive sign that we're emerging with a stronger portfolio of brands as we head into 2023.
Turning to our Meals and Beverage division on Slide 10. I continue to be pleased by the performance of our brands. Organic net sales in the division increased 7% versus the prior year, with growth coming across all major meal segments. Consumption grew 8% over the prior year and 22% compared to three years ago, reflecting the underlying health of our portfolio and the strengthening position we've built with new consumers through the pandemic, especially with new millennial consumers.
Turning to Slide 11, as expected during tougher economic times, Shelf Stable Simple Meals grew an importance, evidenced by the growth of volume share of total food. The strong value and convenience of categories like Pasta sauce and ready-to-serve soup have driven this segment outperformance versus both refrigerated and frozen Simple Meals. This consumer behavior importantly among younger households gives us confidence in the continued relevance of our categories heading into fiscal 2023.
Throughout the thoughtful planning and execution of pricing actions in fiscal 2022, we anticipated an appropriately planned for the share pressure we are experiencing from private label, particularly in parts of the portfolio like condensed soup and broth. What is important to remember is the context of the strength of our share positions. Although never happy with share loss in a category where we have a significant share leadership position, the strength of the category translates to compelling growth on a very important part of our portfolio.
Further, we've been very focused on which consumers are trading down within soup and they tend to be our baby boomer consumers, who historically are a bit more sensitive to price gaps and also very likely to trade back over time. The good news is, is most of our new millennial consumers in soup have been highly brand loyal.
Turning to Slide 13, we also are encouraged by our performance on select brands within our soup category that we see as the most imperative to defend our share. Our condensed icons continued to perform well this quarter with share up 4.1 points and consumption up 29.6% versus the prior year. On a three-year basis, our condensed icons are up nearly 6 points in dollar share, while also growing units approximately 9%, reflecting our focus on ensuring we are winning on the most strategic parts of our condensed portfolio.
In the ready-to-serve business, Chunky continues to be a star, with dollar share up 1.3 points and consumption up 20.3% versus the prior year. Compared to three years ago, Chunky gained over 2 points of dollar share, increased units nearly 27% and we've added over one million new buyers into the brand. We are revitalizing the Chunky brand for new generations of consumers, leveraging our 25th season as an NFL sponsor and broadening our relationship with gaming icon, EA Madden featuring the Campbell's Chunky Stadium.
Innovation will also continue to help fuel our within soup strategy in fiscal 2023. As consumers trade into shelf stable meals like ready to serve soup, we're bringing new relevant innovation targeting better for you and flavor profiles that will add variety as frequency in these categories go up. Building off of the success of our creamy Pacific Foods soups, we're adding to our portfolio of organic ready-to-serve soups and plant based Chili's, which launched in the fourth quarter of fiscal 2022. We're also expanding our new Chunky Spicy lineup following the insight that nearly 2/3 of consumers agree that savory foods taste better with spice. Finally, we are providing a full restage of packaging and graphics to continue to fuel the relaunch of our Well Yes! better for you soup line. Broth is a category where as expected private label pressure has been greater. As a result, we continue to further differentiate our Swanson brand. In fiscal 2023, we will be modernizing our packaging and improving our ingredients to drive the taste superiority, quality and value of our Swanson brand. We will also be launching Swanson quick cups which is a convenient one cup serving a broth, which fits the majority of broth recipe usage occasions. The smaller size offering delivers convenience for smaller households and further delivers value by reducing waste.
Through improved quality and a robust lineup of offerings for our consumers, our focus will be on winning this holiday season. Turning to sauces. We continue to make progress against our goal of building a $1 billion sauces business, with quick scratch cooking increasing in relevance as consumers continue to eat more at home to save money, we are well positioned to capture market share and growth. In fact our Prego brand remain the number one share leader in the Italian category for the 39th consecutive months and delivered consumption growth of 12.4% compared to the prior year.
In addition, repeat rates were up 4 points in the quarter compared to three years ago. We are also building on this success by expanding Prego's lineup as consumers are seeking new elevated flavors and ways to enhance their meals as they cook more at-home. Prego's new varieties offer bold and vibrant ingredients to meet the growing need to bring more choices to the in-home Italian sauce experience. Pace continue to build momentum in the fourth quarter as we recovered from material shortages that pressured supply earlier in the year, leading directly to share gains in the category.
Compared to the prior year quarter, Pace gained 0.4 points of dollar share and grew consumption 14.5%, while repeat rates increased 5.9 points versus three years ago.
Turning to Slide 17. As I mentioned earlier, convenience and value are key drivers, especially when paired with the continued strength of quick scratch cooking. In support of these key consumer dynamics, we're fueling that behavior through innovation with the launch of Campbell's FlavorUp! concentrated sauces and with the relaunch of Campbell's cooking sauces. Both will expand options and flexibility for dinner variety especially as consumers look to find ways to incorporate more interesting flavors at home.
For example, with Campbell's FlavorUp!, cooks can control flavor and portions, plus given its concentrated form, a home cook can flavor 15 meals in every $5 package, making it an excellent value that help stretch consumers grocery dollars. We will launch this through focused retailer partnerships to methodically build momentum as we create this new exciting way to cook. We are pleased with our results and our innovation and we remain poised to deliver our goals of achieving a $1 billion sauce portfolio.
Turning to our Snacks division on Slide 18. The division also had a strong quarter, with organic net sales up 6% over the prior year quarter, driven by our Power brands. In market performance was strong growing consumption 8% versus prior year and 20% compared to three years ago, fueled also by the performance of our Power brands. We have also now successfully delivered our value capture from the integration. And although we recognize that margins do reflect some of the short-term pressure from inflation in COVID-19, we remain very confident in our plans for further margin expansion in the future. Perhaps even more encouraging is the continued strength of our growing highly relevant and unique portfolio of power brands.
Taking a closer look at these brands, in-market consumption grew a 11% versus the prior year and on a three-year basis, consumption grew 26% with double-digit growth across all our Power brands versus three years ago. With respect to share, our Power Brands held dollar share in the quarter versus the prior year, with share gains on Kettle Brand and Cape Cod, Snack Factory Pretzel Crisp and Pepperidge Farm cookies.
On slide 20, as we indicated last quarter, our improvement in supply chain execution would enable us to invest in our brands through promotional activity in the fourth quarter. We were encouraged to see that our increased support help drive positive results. We also are continuing to watch unit share very closely on snacking as we know share of stomach in these categories are very important and provide insight into the longer-term growth potential.
The great news is, we saw unit share improvement across all our Power brands in the fourth quarter versus the third quarter, a particularly competitive segment is total salty snacks, where we were the only major player who grew unit share in the fourth quarter, as we worked hard to keep price and promotion balanced as supply recovered. Goldfish continues to deliver exceptional results also driven by relevant innovation and award winning marketing. We continue to shake things up with our limited time only strategy, building on successful collaborations and flavors with Frank's RedHot and Jalapeno Popper, as well as with Bold and Suite partnerships with Old Bay and our recently announced Goldfish Dunkin Pumpkin Spice grams.
Since their launch, Frank's RedHot and Jalapeno Popper Goldfish have driven incremental sales of 60% for the Goldfish brand. These two innovations along with Old Bay's season Goldfish were ranked number one in velocity for the cracker category innovations during the launch. We're engaging consumers in a unique way, coupling our ability to create delicious flavor driven Snacks with strong partnerships and world-class marketing.
This is expanding our consumer reach and usage. The latest accolade is that Goldfish was named one of America's hottest brands of 2022 by Ad Age. So in closing Campbells' enters fiscal year 2023 with strengthened fundamentals, a powerful brand portfolio and advantage categories and the proven track record of navigating the continued volatile environment. We remain focused on what we can control and most importantly continue to deliver our commitments.
With that let me turn it over to Mick to discuss our fourth quarter and full year results and present more details on the fiscal 2023 outlook we provided in our press release this morning.