Campbell Soup Hearty Survivor of Historic Wall Street Sell-Off

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Photo courtesy of Banalities

Investment advisers often give the advice to get defensive when times are tough.  Investors typically run to sectors like health care, defense, and consumer staples.  On September 29, 2008, they ran to only one stock on the S&P 500.  That’s right; every single member of the S&P 500 lost money that day, but one lone gainer.  Campbell Soup Company, the ultimate frugal culinary staple, actually increased shareholder value that day.  So what’s the lesson?

Frugal Living is Making a Comeback

Between increased sales of Spam and Campbell’s silver lining on an otherwise dark day, it appears frugal living is making a comeback.  The evidence is incontrovertible, but the jury is still out on the reason behind people’s new found affinity for all things frugal.  Is it because they don’t have a choice?  Perhaps.  In some cases I imagine people have little choice regarding spending decisions.   When we are in budget stretching mode around our household, soup and grilled cheese sandwiches are as popular as steaks and baked potatoes.  Even if people can afford to make more luxurious purchases the market turmoil has consumers running for the soup aisle because suddenly other money goals take a priority.

Of course we won’t know if sales of Campbell Soup are really higher during this period until quarterly reports are shared.  I think the soup-maker’s ability to rise to the top when the other 499 members of the S&P 500 were getting hammered is indicative of just how shaky things are, economically.  It is almost as if investors had given up on every other sector, every other company, and said, “The only thing that will survive this collapse is gool ol’ Campbell Soup.”  Just like that hearty cockroach behind the fridge (I know, bad analogy), Campbell was the only one strong enough to survive such a nuclear sell-off.

Does This Mean the End of Luxury?

Yes, probably in the short term.  Of course, there will always be an element of the population that can afford $1200 purses and $60,000 cars, but for the average person the option is no longer there to stretch for such conspicuous consumption on borrowed money.  Times of living the good life compliments of the Visa card are over.  While this will create some short-term pain in the market, particularly for high-end retailers, it is probably a good thing.  People have been financing too much of their lives in an effort to live way beyond their means.  It’s about time we got back to the basics–spend less than you earn, save for a rainy day (and a sunny one), and eat more Campbell Soup for dinner.  Anyone have a coupon?

Comments

  1. Interesting that one single company went up that day. Personally, I would do more investigating before purchasing this stock as a defensive measure since that might have been an anomaly.

    Now I’m thinking of having soup for lunch! :)

  2. Hopefully this whole mess will get more people on the up and up when it comes to their finances and investing. Instead of being scared away, let’s hope they take it as a time to actually learn how things work, why they went wrong, and what they can do to protect themselves. Frugality is a big part of that.

  3. This is great! I also noticed that General Mills stock has been (generally) doing well. My good ole Cheerios have staying power.

    I liked your line about “living the good life compliments of Visa” very much. The thing I like about this whole financial crisis is that maybe, just maybe, other people will finally feel the financial crunch we’ve been feeling for a while because we are living within our means. Finally, I’m not the only one who’s broke.

  4. My friend is convinced that if he starts practicing being a lumberjack today, he’ll be all set by the time the rest of us are suffering in this economic crisis.

    He’s a Music Major.

  5. I think you are right that people will be more frugal in the short term. Either out of fear or need. But, a lot of education is needed for long term results.

    Folks need to learn to take control of their own life.

    Learning to be content will relieve a lot of stress in times like this.

  6. My grocery budget for one person is $25 to $40 a month including garden supplies, so Campbell’s is out of my price range.

    The only time I buy condensed soup is if I’m using it for other than its intended purpose, such as in a sauce or casserole where it will go much farther. In a casserole, which I don’t do very often because it’s unhealthy, a can of soup can feed me eight or ten times, whereas otherwise it’s just one meal. Canned soup, even the low salt kind, is way too salty for me and I can’t taste anything.

    What I do when I want soup is… I make it from scratch. Cream of potato soup… corn chowder… split pea soup in the winter… bean soup… cabbage based soups… tomato soup with actual tomatoes from my garden… onion soup… dill pickle soup… soup-o-rama around my place all winter long. It costs next to nothing. Leftover vegetables get stored in plastic containers in the freezer, and they go into soup when there’s enough for a good batch. I put the soup on to cook while I’m doing other housework or practicing. So it doesn’t cost me extra time.

    That way I get a monster vat of soup for maybe $1 in ingredients. I bake my own bread too, it’s cost effective especially for specialty breads.

  7. I wonder if the makers of Ramen Noodles had the same luck. I used to love Campbell’s but I was diagnosed with a bunch of food allergies/sensitivities (Corn, Soy, Wheat, Beef) so with all the specialty shopping I have had to do, I’ve seen my grocery budget increase from $40 a week to almost $80 at times.

    But I tell you Trader Joes has been a life saver…you can really stretch your budget there and still find nutritious food.

  8. Now that cracks me up! I’m with squeaky, never touch the stuff — I stay VERY far away from high fructose corn syrup and all the additives they put in canned soup — and soup from scratch is soooo much better — but I love that the stock went up like that.

  9. I hope that not everyone stops buying non-necessities. I’d like to keep selling jewelry.

    One thing I’ve noticed is more trading going on between artists though. I just accepted a trade for a hand painted silk pillow for a pair of my earrings. We both win. And no cash changes hands. I’ll get a great gift to give my MIL at Christmas and she gets a pretty pair of earrings.

    I admit to not wanting to use our credit cards as much anymore. And we really are focusing on savings.

    And coupons are my friends. I saved over $100 at Albertsons a couple of weeks ago where I bought over 20 things of soup … plus some other basic staples like pasta and spent only around $50 plus earned 600 box tops for education. =) Go Campbells!

  10. In times of economic uncertainty, people turn to frugality… unfortunately the cycle always goes back. Once things get better, we’ll see flat screen TVs and unpaid credit card bills again. :(

  11. Is buying defensive stocks like Campbells symbolic of our return to the Stone Age that many “money men” are cautioning we’re heading towards if we don’t do the Paulson Plan?

    Or, is it just the right thing to buy stalwarts, like soup, nuts, bread?

    A friend of mine said, “If you can’t eat it, it’s not worth anything.” He may be onto something. I surely cannot eat my house…

  12. I was surprised, too, at the idea that frugality means buying Campbell’s. I guess I’ve been in the frugal trenches too long – for someone accustomed to buying frozen lasagnas, skillet meals, and going out to eat nearly every night, I suppose Campbells would be a step down. :) For us, there’s nothing better on a cold winter evening than to sit down to a bowl of homemade tomato soup made by simply pureeing tomatoes gleaned from a friend’s overproductive garden (since mine was not so productive!)

    But something makes me think that simple is better. :)

  13. Soup, whether Campbells or homemade, is a comfort food. In times of uncertainty, we all seek security and peace, and a warm, soothing bowl of soup is the ultimate balm. As Judith Martin (Miss Manners) said,”"Do you have a kinder, more adaptable friend in the food world than soup? Who soothes you when you are ill? Who refuses to leave you when you are impoverished and stretches its resources to give a hearty sustenance and cheer? Who warms you in the winter and cools you in the summer? Yet who also is capable of doing honor to your richest table and impressing your most demanding guests? Soup does its loyal best, no matter what undignified conditions are imposed upon it. You don’t catch steak hanging around when you’re poor and sick, do you?”

    I love it!

  14. Campbell’s is not in my frugal cupboard either!
    I’m with those above – it’s homemade from scratch with most items from my garden, plus leftover dibs and dabs.
    I freeze the surplus for later…. however, as my freezer is about full with the garden stuff, I think I am going to start canning my homemade soup in quarts. Might save the freezer space :)

  15. Thank you very much for your post. Absolutely excellent information and very useful for me. Great done and keep posted. Looking forward to reading more from you.

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