Soup lines

Prepared Foods, Jan, 2003 by William A. Roberts

The goal of most product manufacturers is market penetration, but what can be done when the product is in almost every home? In the case of soups, companies have turned to innovative packaging, new ingredients and increased convenience.

A staple in most American households, soup appears to be a victim of its own popularity. According to Mintel International Group, Chicago, most consumers have at least one can of soup in their pantry and, in addition, have eaten soup at home within the last 30 days. Such statistics make increasing market penetration a daunting task.

However, while annual sales have been flat in recent years, certain areas of the $3.8 billion soup market show promise. Ready-to-serve (RTS) varieties have seen their sales flourish, increasing roughly 16% between 2000 and 2002, and overtaking condensed soup sales in the process. Furthermore, Mintel predicts RTS soups will expand at a higher rate than the general industry.

Campbell Soup, Camden, N.J., has enjoyed a resurgence in popularity, partially due to consumer desire for comfort foods. However, comfort is only one draw. With a weak economy, more consumers are eating at home, and they need a quick, convenient meal--two hallmarks of recent soup introductions.

Convenience is also important outside the home. Campbell, for example, has recently introduced Soup To Go, which allows consumers to microwave a single-size serving and eat it on the run. Another variety, Soup at Hand, is a microwaveable soup in a container shaped like a coffee cup, which fits in most automobile cup holders.

Packaging has been modified to include easier-opening formats, such as pull rings, and ready-to-use-and-serve plastic bowls for RTS soups. Portionable bottles with resealable lids also have garnered consumers attention.

Soup in jars was considered cutting-edge upon its introduction in the mid-1990s. It allowed purchasers to see the product they were buying and may have contributed to a perception of freshness. Increasingly, that perception is turning to soups in the refrigerated section. A mainstay in foodservice, refrigerated soups are relatively new to supermarkets. According to Mintel, "The quality of these products and the freshness of the ingredients will appeal to consumers, who are looking for a restaurant-style food experience in the comfort and convenience of their own home."

Gold in Bold

Taste is also a key consumer value, and manufacturers large and small follow general food and beverage industry trends by introducing bold new flavors. Among the newest varieties are roasted garlic, spiced butternut squash, and pan-dripped chicken. Mintel also finds that ethnic soup varieties are taking more shelf space, and that they have an appeal beyond just the specific ethnic group as mainstream consumers seek bolder, more unique flavors.

Consumers, however, are not content solely with taste and also seek nutritional benefits. These benefits are unlike those of the fat-free era.

One trend is the addition of vitamins or herbs. As Mintel notes, this health-conscious and nutritious rationale presents consumers with an extra incentive to make soup a part of a healthful diet. With obesity and other health-related issues coming to the fore, manufacturers are expected to position soup as a food item that fits well with the trends toward comfort and health. Quick and convenient, soups satisfy the desire for a hot meal, and with nutritional additives, will further their perception as a nutritious meal. Vitamin C is one nutrient expected to make its way into soup, and, except for regulatory issues, Echinacea would be another natural fit.

Such value-added benefits may be essential to capture the soup consumer's attention. Category leaders are aware that both private label and smaller manufacturers have made significant inroads to market share. While they occupy only a relatively small portion of overall shelf space, some smaller companies have managed to separate themselves from the pack by emphasizing the homemade quality. According to Mintel, particularly in the RTS category, market leaders have been forced to make advancements in quality to compete.

While the RTS segment enjoys the strongest growth, that may not benefit larger manufacturers as they face intense competition amongst themselves. RTS varieties have shown over 40% sales growth in real terms from 1997 to 2002, and the segment now comprises an estimated 44% of the soup market. The steady gains are due to a vast array of products designed to appeal to more discriminating tastes and the need for convenience. The introduction of Progresso (General Mills, Minneapolis, Minn.) in the mid-1990s led to an intense rivalry with Campbell's Chunky line.

Convincing consumers to try a new version of an old favorite is difficult, but the introductions of Progresso and Chunky opened the door to soup experimentation. Campbell's Soup To Go has been a boon for those seeking a portable soup, while the improved taste and more-exotic flavors of soups from smaller companies, such as Covent Garden, San Francisco, have brought additional attention to the segment.