Manufacturers are looking to ethnic flavors, packaging enhancements and healthier offerings to invigorate soup sales.
By Craig Levitt
Soup sales are, to be blunt, in the soup.
With growing concerns about high sodium content, bickering between suppliers and more and more healthy alternatives, condensed and traditional canned soup sales have shown a decline over the past several years. According to research from Chicago-based SymphonyIRI Group, the condensed wet soup segment is showing a 4.5% drop in dollar sales and ready-to-serve soup dollar sales are declining by about 5% annually.
That is not good news for the grocery industry, which views soup as a staple of its overall merchandising strategy and has come to depend on the category for its steady presence in the store.
Now, many say, the canned soup category seems to be ready to go back on the offensive, powered by a new array of healthy alternatives of their own and a much more upbeat message to consumers. The real benefit for retailers could be higher price-points and greater margins from a category that traditionally has not been known for its high profitability.
The two major players in the field, Campbell’s and Progresso, part of the General Mills empire, are leading the charge, hoping that it is not too late to bring back those shoppers who used to shop the soup aisle but left due to a number of factors.
Camden, N.J.-based Campbell Soup Co., for example, features an advertising campaign that celebrates the versatility, taste and health benefits of its soups. Part of Campbell’s campaign includes making soup more family-friendly by introducing two varieties of Campbell’s Chunky soup, Creamy Chicken and Dumpling and Beef with Country Vegetables, in family-friendly 50-ounce cans.
“[These soups] can be poured over a starch, such as rice or potatoes, to create the perfect meal,” says Charles Vila, vice president, consumer and customer insights, Campbell North America.
Providing consumers with multiple soup options is clearly beneficial, as is working directly with retailers to enhance the category’s visibility within the store. Vila says that Campbell’s has an opportunity to be creative and clear about how their products can meet consumer needs and everyday life challenges.
“This means working with retailers to display soup beyond its traditional aisle and raising awareness with our consumers that pairing soup with fresh breads, salads and deli selections is a tasty, satisfying and economical meal solution,” says Vila.
While canned soup sales are on the decline, the refrigerated and frozen soup segments represent a growth opportunity. Though they only account for about 3% of category sales, observers say the ability to offer fresher ingredients and more distinctive flavors has made refrigerated and frozen soups popular with consumers. As these soups gain in popularity some observers have noticed that retailers are providing less and less space to canned soups—as a way to differentiate themselves.
“The Trader Joe’s model, how they have been able to embrace frozen, that has kind of carried over to conventional retailers as well,” says Levon Kurkjian, vice president of marketing for Kettle Cuisine, based in Chelsea, Mass. “Consumers also have the perception that other packaging formats are better for them and have high-quality products, so you are seeing even the big guys going to that aseptic package that almost looks like a milk carton.”
It is for that reason Kettle Cuisine chose to go the frozen route when offering its line of 10-ounce soups. Kurkjian says that the frozen format allows them to keep clean ingredients, without any artificial additives or preservatives. “Being frozen really gives us a point of difference,” he says. “We have a tomato soup with garden vegetables that when you taste it you bite into the vegetables.”
Just as important as taste and freshness, at least for retailers, is that adults in their 30s and younger as well as higher-income consumers are more apt than their older counterparts to choose frozen or refrigerated soups, according to consumer research conducted by Mintel, a Chicago based research firm. These are the same consumers who are also interested in more regional, cultural and eclectic taste profiles, which are in demand more than ever before.
Currently some of the more popular offerings are Southeast Asian, such as Thai and Vietnamese. Soup makers in particular are taking advantage of the popularity of these ethnic cuisines as many consumers view soup as a relatively inexpensive way to make an initial taste trial for these flavor profiles. However, observers stress that retailers need to be careful when stocking their shelves with exotic soup offerings.
“The one thing about ethnic profiles is that consumers want to experience flavors from those regions of the world, but they don’t really want authentic,” says Kurkjian. “They want a Thai soup but they don’t want it as spicy as real Thai soup or they want an Hispanic soup, but they don’t want one with cow intestines. Essentially they want Americanized versions of ethnic foods.”
To meet the demand, Kettle Cuisine recently launched a Thai Curry Chicken. Kurkjian says that while the soup has coconut milk and Thai spices “someone accustomed to Thai food may say it is not spicy enough. But it is spicy enough to appeal to the masses.”
The growing popularity of ethnic foods has inspired new flavors in Pacific Natural Foods hearty soup line as well. The line now includes Thai Sweet Potato, Poblano Pepper and Corn Chowder. The entire hearty soup line is available in BPA-free Tetra Recart packaging, which Jennifer Herrick, marketing communications manager for the Tualatin, Ore.-based company, says helps preserve the integrity of the soups ingredients. She adds that the cartons are shelf-stable for up to 24 months.
The popularity of ethnic foods has also led Pacific to launch a line of soup starters. “Increasingly, home chefs are looking for ingredients that offer shortcuts to their favorite restaurant dishes to reduce their anxieties about preparing ethnic meals at home,” says Herrick.
“For example, a traditional Pho base takes approximately eight hours to make, but our Pho Soup Starters offer delicately seasoned, slow cooked flavor in the amount of time it takes to heat up and add your own signature fresh ingredients.”
Also capitalizing on the South East Asian trend is ConAgra Foods with its Healthy Choice brand. Last month the Omaha, Neb.-based company began shipping its Thai Style Chicken with Brown Rice. The microwavable soup is a reduced-sodium offering (390 mg) in a 14-ounce bowl.
Mediterranean cuisine continues to gain favor in the U.S. as well. To meet that burgeoning segment ConAgra launched its Healthy Choice reduced-sodium Mediterranean Chicken with Orzo. General Mills, based in Minneapolis, is delivering the taste of the Mediterranean to consumers with two Progresso Traditional flavors, Roasted Chicken Primavera and Chicken & Orzo with Lemon. Progresso is also re-launching its entire Rich & Hearty line of soups.
“Over the past two years, the recipe of every [Rich & Hearty] soup has been carefully improved so that each soup tastes even better,” says Chad Johnson, marketing manager for Progresso. “In addition to the changes we’ve made to existing recipes, we are also launching four new Rich & Hearty soups that deliver delicious savory flavor and high quality ingredients.
Better-for-you soups are also a fast growing segment within the soup category. Becky Niiya, a spokesperson for ConAgra Foods, says sales of Healthy Choice reduced-sodium chicken noodle and chicken and rice are up 20% versus a year ago.
Last June Campbell’s began reducing sodium levels by 20% to 45% in more than 20 of its condensed soups. Company officials say the number of Campbell’s reduced-sodium soups now available is around 130. Among the varieties undergoing sodium reductions were, Chicken with Rice, Minestrone, Homestyle Chicken Noodle, 98% Fat Free Cream of Mushroom, 98% Fat Free Cream of Chicken and the five condensed Light soups originally introduced in 2009.
At the time of the reduction Lisa Walker, vice president Campbell’s condensed soup, broth and Campbell’s Kitchen said, “Reducing sodium in nearly half of our flagship condensed soups is a critical milestone in Campbell’s long-standing sodium reduction efforts. Beyond simply offering lower sodium product lines, we’ve also made significant sodium reductions in our original soups. We know from our decades of experience in sodium reduction that people want foods that are reduced in sodium and taste good, and we are confident that these soups deliver the great taste that people expect from Campbell.”
Kettle Cuisine is on the health and wellness bandwagon as well with the recent introduction of its Three Bean Chili. Kurkjian says the pinto bean, black bean and chili bean soup with onions, tomatoes, bell peppers, green chilies, and a blend of Southwestern spices is high in fiber, low in sodium and vegan.