Heat up soup sales
Soup sales have yet to fully recover from a dip that began at the start of the U.S. recession in 2008. While sales climbed to $6.7 billion in 2012, that figure was still below the pre-recessionary $6.8 billion, according to an April report from global market research firm Mintel.
To heat up soup sales on the private label side, retailers will need to make some changes – such as using convenient packaging, creating appealing flavors and offering healthful choices, industry experts say. Meanwhile, fresh ready-to-serve soups will continue to be hot picks.
Use convenient packaging
Retailers might want to kick the can to the curb when choosing soup containers. According to the Mintel report, shoppers want cartons and bottles with resealable closures, single-serving varieties and products that can be cooked or heated in their containers, with little preparation necessary.
\"The solution is offering true innovation faster than the national brands, such as converting from a can to a carton,\" says Brent Lunn, vice president for business development, Protenergy Foods, Toronto.
Lunn says cartons have grown total broth sales dramatically over the past eight years.
\"Aseptic cartons have existed for years, but the new technology is Tetra Recart – which allows for the inclusion of particulated and chunky soups,\" he says.\" Tetra Recart has been available in North America since 2009, but the latest technology [high-speed line with quality improvements] has only been available since summer 2012.\"
In addition to alternatives to the traditional can, shoppers want appealing packaging. Bobby Ray, vice president of retail for Select Store Brands, Ontario, Calif., says high-quality soups need to look high in quality on the shelf.
\"Cup manufacturers have done a great job in developing different shapes of cups,\" he says. \"If you have something special inside, make it special on the outside. Cups with in-mold labels look wonderful – they make soups simply pop.\"
André Martin, director of sales for Berthelet Food Products, Laval, Quebec, adds that more consumers today are concerned about the environment; therefore, they prefer a product that is not over-packaged.
Do
think outside just the can when it comes to soup packaging.
Dont
ignore on-trend flavor profiles.
Create new flavors
Rob Wagner, vice president of U.S. sales for Mondiv Foods, a Boisbriand, Quebec-based division of Lassonde Specialties Inc., says trendy flavors are also a hot selling point for soups. He suggests that flavor profiles that are similar to Campbells new Go soup program – such as creamy red pepper with smoked Gouda and spicy chorizo and pulled pork with black beans, as well as ethnic-type varieties such as Moroccan-style chicken with chickpeas – will appeal to consumers.
His sentiments are echoed in the Mintel report, which states that expanding to ethnic-inspired flavors could be a way to grow sales, since close to half of consumers indicated an interest in such products.
Ashley Kanary, vice president of sales for Baxters Canada Inc. in Mississauga, Ontario, says a key focus should be on Indian, Hispanic and Asian options.
\"We need to keep pace with immigration,\" he adds.
Offer healthful choices
Todays consumers are more health-conscious than ever when purchasing food – and soup is no exception. They want fresh ingredients, sourced locally whenever possible, and a clean label. Of course, the soup still has to taste good, too.
\"When our customers worked with us to lower the sodium in their private label products, we saw a tangible uptick in volume for those SKUs,\" notes Bob Sewall, executive vice president of sales and marketing for Blount Fine Foods, Fall River, Mass., \"The same can be said for gluten-free, vegetarian/vegan and organic soups.\"
Although shoppers are seeking more healthful choices, sales in traditional cream-based favorites have not declined.
\"We see consumers accepting a few more calories and even more sodium if they see that a soup or chowder is made with wholesome ingredients,\" Sewall says. \"What consumers are consistently showing is that they dont want a long ingredient label that reads like a chemistry test.\"
Berthelet Food Products recently introduced broth and soup mixes for private labeling that contain only 480 milligrams of sodium per cup. In addition, they are gluten-free and have no artificial flavor enhancers.
\"I believe store brands have overlooked part of the population that needs a good-tasting product that is reduced in sodium, gluten-free and [has] a clean label,\" Martin says.
Make it fresh – and easy
Freshness – or the perception of freshness – matters, too, to todays consumers. When relying on cartons, retailers can up the freshness quotient by using natural and organic ingredients and formulating products for use with mix-ins such as fresh vegetables and proteins, Mintel says. Sewall suggests having diverse and healthful offerings in the deli/prepared foods section, as well as hot-to-go items at the salad bar.
\"Store branded [prepared] products carry the perception of freshness and of being homemade, whether or not they are actually made on-site,\" the Mintel report states. \"[By] capitalizing on consumer interest in convenience, stores benefit from packaging their own deli offerings for grab-and-go sales. This is one soup segment where private label has stronger positioning power than branded products.\"
For his part, Ray believes the popularity of refrigerated soups will continue to grow.
\"So many families are busy. Store brand soup must be easy and fast,\" he says. \"A refrigerated soup that can be heated easily should see long-term growth.\"
Do
invest in product tweaks that increase the perception of freshness.
Dont
underprice premium own-brand soups.
Avoid mistakes
Sprucing up the store brand soup assortments packaging, flavors and healthfulness are all good endeavors, but retailers shouldnt make the mistake of putting a private label offering in isolation.
\"When one of our customers merchandises their private label offering right beside our high-end soups and chowders sold under a brand name, they consistently sell more of both the private label and branded offerings,\" Sewall says.
Regarding new concepts, Lunn says it would be a mistake to simply follow the national brands.
\"In order to have a significant share in any category, a retailer needs to think and act like a brand owner and offer some innovation,\" he says. \"This includes quality, packaging, variety and so forth.\"
Retailers have the ability to collaborate with private brand manufacturers and move more quickly than larger national brands. Several are beginning to do so, Lunn notes, and are leading innovation with their brands.
\"I believe that the soup category is a great place for retailers to be aggressive in their approach to leading instead of following, perhaps due to [the categorys] large size and low private brand share,\" he adds.
Look ahead
Whats next? Kim Hannaford, director of marketing for Morgan Foods Inc., Austin, Ind., believes retailers have an opportunity to draw younger consumers such as millennials. This group comprises 86 million people in the United States, a number that is 7 percent larger than the baby boomer generation.
\"New flavors, freshness and convenience will play a role in attracting these shoppers,\" he says.
Unique ingredients such as quinoa, almond and soy milk, curry spice, chickpeas, avocados and faro also will appeal to this segment, Hannaford adds.
In addition to making product and packaging tweaks, retailers also will want to apply some marketing muscle to their own-brand soups.
\"Offer a better-quality product, merchandise it near your deli or prepared foods area – alongside respected and loved restaurant brands – and cross-promote it with other products that simplify life for the shopper, and youll have the winning recipe,\" Sewall says.
He also advises retailers to make sure premium soups command a premium price.
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| Look whats new |
| New from Pleasanton, Calif.-based Safeway Inc. is Safeway Kitchens 50% Reduced Sodium Cream of Chicken Condensed Soup, which contains half the sodium of Safeways regular cream of chicken soup. The product is microwavable and retails in a 10.5-oz. can. |
| Bremer Selects Tomato Florentine Soup from ALDI Inc., Batavia, Ill., is said to be a fresh-tasting, restaurant-quality premium soup. The frozen microwavable soup combines cheese-filled tortellini, white meat chicken, spinach and tomatoes in a tomato bisque. It retails in a 24-oz. bag. |
| Source: Mintels Global New Products Database |