Campbell Soup is still struggling to sell ... soup.
The company says soup sales fell 7% last quarter in the United States compared with last year.
CEO Denise Morrison blamed a "key customer issue" - code for an ongoing dispute with Walmart. The Wall Street Journal reported in August that the two couldn't agree on pricing and shelf space promotion. Morrison said Friday that Campbell was "making progress" on an agreement.
But Campbell hasn't grown revenue over the past three years. The stock has slumped. And the problem is deeper than shelf space.
Campbell is still the biggest name in the American soup industry, with about 40% market share, according to Euromonitor data. Yet it has struggled, along with competitors like General Mills' Progresso and Unilever's Lipton, to get people to buy processed soup.
The $4.5 billion U.S. canned soup industry has been flat since 2012.
"Canned soup is the epitome of a processed food product," said Jared Koerten, an analyst at Euromonitor.
Consumers are moving away from center-store aisles to the perimeter, where they can find fresher options with less salt, Koerten explained. Microwavable meals are under similar pressure, Koerten noted.
Campbell's drinks didn't fare much better. V8 demand was weak and Bolthouse Farms coffee, fruit and veggie juice lagged.
The good news for Campbell: Organic soups and broths are hot right now. Sales for the Pacific and Amy's brands have each grown more than 60% over the past five years, Euromonitor said. Campbell bought Pacific Foods for $700 million last year.
The company also has a profitable snack business, and it's building a strategy around "faster growing spaces of health and well-being and snacking," Morrison said on an analyst call.
Late last year, Campbell announced a $4.9 billion deal for Snyder's-Lance, which makes Snyder's of Hanover pretzels, Cape Cod and Kettle potato chips and Pop Secret popcorn. It was the biggest purchase in the company's 149-year history.
After the deal closes later this year, snacks will make up nearly half of sales, up from around a third today.
Koerten doesn't expect Campbell to abandon the soup business, but its "trying to pivot to become a more on-the-go snack company."