Rosalind Evans
Campbell Soup has announced plans to purchase Sovos Brands, the company behind Rao’s renowned pasta sauces.
Both companies disclosed they had agreed that Campbell’s would secure Sovos at a rate of $23 per share in cash. This agreement approximates the total value at around $2.7 billion.
Campbell’s CEO and President Mark Clouse expressed that this acquisition is a strategic move to fortify and diversify their Meals & Beverages division. “Coupled with our burgeoning Snacks division, Sovos’ portfolio solidifies Campbell as a top-tier, growth-centric name in the food sector,” Clouse noted.
Campbell Soup, beyond its iconic soups, also produces the likes of Prego sauce and Goldfish crackers.
Sovos’ product range, beyond Rao’s sauces, includes dry pasta, soups, frozen dishes, and yogurt. Some of its known brands are Michael Angelo’s and Noosa. A recent press release gathered that Rao’s stands out as Sovos’ flagship brand, accounting for almost 69% of its $837 million adjusted net sales in the preceding year.
Todd Lachman, the brainchild and CEO of Sovos Brands, shared his sentiment on the acquisition. “We’ve established a unique, rapidly-growing food enterprise centred on taste-driven products via a suite of high-end brands, prominently led by the Rao’s brand,” he said. Lachman voiced his trust in Campbell’s prowess to expand their product reach and maintain their growth trajectory. He also emphasized the deal’s lucrative nature for shareholders, noting the buying price is almost twice the $12 Sovos Brands had for its IPO in September 2021.
The announcement on Monday indicated Campbell’s intention to resort to new debt to facilitate the purchase. The acquisition, contingent on Sovos stockholder and regulatory green lights, among other conditions, is foreseen to be concluded in December.
However, this announcement was met with some online resistance, particularly from ardent fans of Rao’s. There’s a palpable anxiety regarding potential alterations to the beloved sauce’s flavour or composition. Currently, Rao’s markets its Homemade sauces as devoid of added sugars, water, tomato paste, or colours.
Addressing these concerns, a statement was relayed from Clouse via a Campbell representative referencing his remarks on CNBC. Clouse emphasized, “We won’t alter it. Anyone speculating we might change the sauce is mistaken.”
Rao’s, boasting a rich heritage, traces its origins to 1896. Italian immigrant Charles Rao took ownership of a petite tavern in New York City. The family’s management saw the establishment evolve into a famed restaurant, serving authentic southern Italian meals. By 1992, their acclaimed sauce started being bottled and retailed, reaching grocery shelves as we recognize it today.
As two culinary giants merge, fans worldwide await the next chapter in Rao’s storied history. While changes in business dynamics are inevitable, the legacy of Rao’s sauces, rooted in over a century of tradition, remains a testament to timeless taste and quality. With Campbell’s stewardship, the hope is for this heritage to be preserved and amplified for future generations.
