By Beth Kowitt
November 21, 2017

Want to know what went wrong during Campbell Soup’s most recent quarter?

Look to the carrots.

The root vegetable was mentioned 29 times on the consumer packaged food company’s earnings call Tuesday as it reported that revenue and earnings declined for the period, missing analyst estimates. Campbell also lowered its profit forecast for the year.

Carrots made their first appearance on the call when, only a few minutes in, CEO Denise Morrison noted that “unfavorable weather negatively impacted carrot crop yields and led to supply constraints and higher-than-expected costs.”

The vegetable became key to Campbell after it acquired Bolthouse Farms and its bagged carrot business in 2012 in order to expand its position in what the company calls “packaged fresh”—a growing category meant to answer growing consumer demand for less processed fare. Shoppers’ shift away from packaged goods toward fresh foods has negatively impacting Campbell and its Big Food brethren, who have responded by acquiring natural food startups and reformulating their ingredient lists.

The Bolthouse deal turned Campbell into “an organic carrot farmer,” as Morrison likes to say, and with it has pressured the company with the kind of volatility that packaged foods industry was designed to prevent.

This is not the first time Campbell has blamed carrots for poor results. In September 2016, the company said it harvested carrots prematurely, which resulted in smaller carrots and dissatisfied customers.

On today’s call Morrison said that the company learned its lesson from that episode and allocated each customer a certain number of carrots rather than “compromise the quality.”

One analyst asked Morrison about the “board’s thoughts on the carrot business at this point” because it “has underperformed expectation” and is “unpredictable from an investor perspective.” Morrison acknowledged the carrot businesses had been volatile due to extreme rain and heat in California.

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