Swire Pacific and Campbell Soup Company form JV in China

JV designed to accelerate growth of commercial soup market in the Mainland.

Swire Pacific Limited announced on Thursday that it has entered into an agreement to form a joint venture with Campbell Soup Company to develop the growing soup market in Mainland China. Called Campbell Swire, the new company will begin operations in early 2011. Swire Pacific will own 40% stake while Campbell will have a 60% ownership stake in the joint venture. Profit and losses will be shared in proportions consistent with each party’s ownership.

Mainland China is now the world’s second largest economy and has one of the highest rates of per capita soup consumption in the world. Approximately 355 billion servings of soup are consumed in Mainland China annually - nearly all of them homemade, according to a Swire Pacific report.

Swire Pacific Chairman Christopher Pratt said, “The consumption of soup is an integral part of Chinese dining culture and its commercialisation has exciting potential which we believe this new partnership can realise. Campbell as a global leader in the marketing and manufacturing of soup together with Swire Pacific’s long experience of sales and distribution in Mainland China will bring the right attributes to develop this market opportunity.”

Douglas R. Conant, Campbell’s President and CEO, said, “We continue to believe that developing a commercial soup market in Mainland China represents a tremendous business opportunity for our company. Realising the benefit of such an opportunity requires a long-term commitment and the right strategic partner. Swire has been an effective distribution partner for Campbell since we launched our business in Mainland China in 2007, and we look forward to the next phase of our relationship together.”

The joint venture will be based in Campbell’s current offices in Shanghai and will be responsible for manufacturing, packaging, branding, marketing, selling and distributing soup, broth and stock products in Mainland China. Campbell will retain ownership of Campbell brands and recipes and license those to the joint venture.

Campbell Swire will be led by Peter Foyston, 47, who joined Campbell in 2009 and is currently General Manager Campbell Soup Greater China.

Mark Alexander, President - Campbell International, said, “We’ve made great strides in understanding the market and refining our products to appeal to Chinese consumers. This partnership will help unlock the potential of the commercial soup market in Mainland China by pairing Campbell’s brands, recipes and consumer insights with Swire’s sales force, logistics capabilities and overall market knowledge.”

Campbell launched its business in Mainland China in October 2007 in Guangdong province and expanded to Shanghai in November 2008.