Campbell Soup juices up its Dixon tomato processing plant

Campbell Soup juices up its Dixon tomato processing plant
Expansion would increase processing season, add variety for its V8 juice line
Sacramento Business Journal - by Celia Lamb Staff writer
May 16, 2008

Campbell Soup Co. plans to expand its tomato processing plant in Dixon so it can run two months longer each year and also take carrots, celery and other vegetables.

The expansion would increase its tomato-processing capacity by 15 percent in the summer and allow the plant to process nine other vegetables for the company's V8 juice and other products in the spring and fall.

The company employs 180 people at the Dixon plant, its largest tomato processing facility. It does not plan to hire more workers, Campbell Soup spokesman Anthony Sanzio said.

"This isn't about new jobs," Sanzio said. "It's about extending the season. This will create 60 days more production (per year)."

The company plans to bring in new equipment and control systems for receiving vegetables, cooking them into concentrates and packaging.

Typically, tomato processing plants run full bore during harvest season and sit idle in the winter and spring. Campbell processes tomatoes at the Dixon plant from July to October. Next year, when the expansion is completed, the plant would start up two months earlier, in May.

The company anticipates expanding its contracts with growers in Solano, Yolo, Sacramento, Colusa, Contra Costa, Fresno, Kings, Monterey, San Joaquin, Sutter, Tulare and Ventura counties.

"We expect the benefits of the expansion to extend beyond Campbell and have a positive impact on local farmers, as well as many other businesses that support farmers, such as supply and transportation companies," said Michael Dunn, vice president of manufacturing for Campbell's Sacramento operations, in a news release.

Sacramento-area growers said the expansion will probably benefit the local farm economy because Campbell Soup usually contracts with farmers who are close to the plant to keep transportation costs low. But the company hasn't given farmers specifics yet.

"As growers, we have not received anything official as far as what the future holds," Dixon tomato grower Ron Timothy said. But he's optimistic.

"They treat their growers well," he said. "If you are a Campbell Soup grower, you are part of that family."

"This will obviously have a positive impact on Dixon's economy and also on other Solano County communities," said Michael Ammann, president of Solano Economic Development Corp.

The expansion also would enable the company to process a greater variety of organic vegetables for several Campbell brands, including Campbell's Organic Tomato juice, V8, Prego pasta sauce and Pace salsa, Sanzio said.

Campbell's beverage business was its best performing unit in fiscal 2007.

"The demand for healthy beverages continues to grow as more people try to find easier ways to incorporate vegetables into their daily diet," Irene Britt, vice president and general manager of sauces and beverages at Campbell USA, said in a news release. "We expect the expansion of our Dixon facility to help us meet the increased consumer demand for Campbell beverages."

Campbell Soup earned $544 million, or $1.41 per share, in the six months ended Jan. 27. That was a 0.9 percent increase from $539 million, or $1.44 per share, in the first half of fiscal 2007. It reported sales of $4.4 billion in the six months ended Jan. 27, a 7 percent increase from the same period of fiscal 2007.

The first-half results included a $13 million gain from the resolution of a state tax matter and $14 million from the sale of an idle Pepperidge Farm plant. The company also plans to sell its Godiva business as part of a strategy to focus on its soup, baked snacks and vegetable juice businesses.

High food-ingredient and energy prices have hurt the company's bottom line this year.

But strong sales have helped. Sales of V8 V-Fusion and V8 vegetable juice, ready-to-serve soups, reduced-sodium soups, broths in aseptic packages and Pace Mexican sauces increased during the past quarter.

Campbell Soup Co.
Ticker symbol:

NYSE: CPB

Headquarters: Camden, N.J.

Annual earnings: $854 million, or $2.16 per diluted share, in the year ended July 31, 2007; $766 million, or $1.85 per diluted share, in fiscal 2006

Annual sales:

$7.9 billion in fiscal 2007; $7.3 billion in fiscal 2006

clamb@bizjournals.com | 916-558-7866