Campbell Soup Company Confirms It Won't Alter Rao's Recipe Following Purchase

Earlier this week, Campbell's purchased Rao's for nearly $3 billion. The beloved store-bought pasta sauce brand wasn't the only product acquired in the purchase, either. Campbell's is buying parent company Sovos Brands, Inc., which also owns Noosa Yoghurt and Michael Angelo's frozen meals.

At $23 per share, the deal will be done in cash, Campbell's announced via a joint press release on Monday. Including Sovos' debt, the total deal is valued at $2.7 billion. It is set to officially close sometime in December, and should it be terminated for any reason, Sovos has required Campbell's to pay $145 million. It's exciting news for Campbell's, but some fans weren't so stoked to hear the news.

A viral Reddit thread on the Costco subreddit mock-eulogized, "RIP Rao's — we loved you while you were good." Fans lamented the acquisition, theorizing that Campbell's would change the pasta sauce recipe. "Once that brand is 'value engineered' down to nothingness, and the price doubled, I doubt we'll speak well of it." (Costco Redditors also generated some major food world controversy with a phony PB&J menu item last week.)

But, rest assured, Campbell's has jumped in to put fans' minds at ease. In a statement to Eat This, Not That!, Campbell's CEO Mark Clouse assured, "We're not touching it! Anyone who thinks we're going to touch the sauce, no." As Clouse shared via The Business Journals, the original Rao's recipe is "part of what the magic is here."

Recipe change or not, this deal opens up a larger conversation about big conglomerate companies buying out smaller competitors. As the top Reddit comment on the viral thread (which received nearly 1,000 upvotes) points out, "Mmm Mmm good! 'You'll love it because it's your only choice' — Campbell's Soup Co." Campbell Soup Company totes a wide brand portfolio of such iconic grocery store characters as Cape Cod, Pepperidge Farms, Goldfish, Pacific boxed soups, Prego, Swanson, V8, Pace salsa, Snyder's pretzels, and more. Last month, Unilever bought Yasso frozen yogurt and Mars Inc bought Kevin's Natural Foods.

Still, even though Rao's originally started in the kitchen of Italian immigrant Charles Rao back in 1896, and remains produced in small batches with ingredients sourced from Italy, the brand has become something of a large name in its own right. Rao's has consistently generated an average of 38% year-over-year growth since 2017. The pasta sauce single-handedly accounted for 69% of Sovos Brands' total adjusted net sales in 2022. Total company sales hit $837 million, which is representative of 34.9% year-on-year growth. The new Campbell's acquisition is killer news for shareholders, too. According to Tod Lachman, Sovos founder, president, and CEO, the value of current Sovos Brands shares is expected to increase by 92%.