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Originally published May 23, 2013 at 2:13 PM | Page modified May 23, 2013 at 3:29 PM

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Campbell buying Plum Organics baby food maker

Campbell Soup said it's buying Plum Organics, which makes food for babies and kids, for an undisclosed amount as it looks to move into faster-growing categories.

AP Food Industry Writer

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NEW YORK —

Campbell Soup said it's buying Plum Organics, which makes food for babies and kids, for an undisclosed amount as it looks to move into faster-growing categories.

The company, which also makes Prego pasta sauces and Pepperidge Farm cookies, had been struggling to grow sales of its canned soups in recent years as people increasingly look for foods with a fresher feel. To diversity its stable of products, Campbell also recently purchased Bolthouse Farms, which makes premium juices, salad dressings and bagged carrots.

Campbell Soup Co. said Thursday the premium and organic baby food market has been growing at an annual rate of 43 percent. Baby food is a $2 billion category in the U.S., with Plum holding the No. 4 position in the market, according to the company.

In an interview, CEO Denise Morrison said Campbell planned to keep Plum as a distinct brand. For example, the packaging will not be changed to reflect the new ownership. To keep from alienating loyal fans, preserving a distance with the parent company is not unusual when large corporations buy smaller names. Even after PepsiCo Inc. bought Stacy's pita chips, for example, customers didn't see any real changes in the packaging.

Still, Morrison noted that Plum could benefit from Campbell's distribution and selling experience.

Plum, which was founded in 2007 and is based in Emeryville, Calif., generated $93 million in sales last year. Its products include baby food in squeezable pouches and a line of puffed snacks called Super Puffs. Its addition will bring Campbell's portfolio of kid-focused foods and drinks to $1 billion in annual sales.

Campbell, based in Camden, N.J., said Plum's operations will remain in Emeryville. The company says the acquisition will not affect its financial outlook for 2013. The deal is being funded with Campbell's available credit, with the closing expected in the fourth quarter.

Shares of Campbell were down 4 cents at $45.72 in after-hours trading. During regular trading, the stock fell 15 cents to $45.76.

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