In The NewsSoup is Hot! - February 1, 2007Soup is Hot! Refrigerated & Frozen Foods Retailer
That pushed sales over $96 million for the year, with private label responsible for 86.1% of the volume. But don’t count the brands out just yet – private label’s share dipped by 2.6% last year, losing a cup here and there to Marie Callender’s and Boston Market, the No. 2 and No. 3 players, respectively.
The branded gains come despite significantly stronger promotional support for private label. Some 61.8% of private label sales came with some form of merchandising support in 2006. That compares with levels of only 32.9% for Marie Callender’s and 44.5% for Boston Market. Keep in mind that most other brands had significantly less support than that.
Some of the growth in fresh soups may be coming from the frozen soup category, which saw sales dollars and units decline 6.1 and 13.6% respectively over the same period. Canned soup is also taking a hit, based in part on consumer perceptions about additives such as salt.
But the perception of refrigerated soup’s healthfulness, and new convenient packaging, are helping the category grow. Today’s refrigerated soups are generally healthier than their shelf-stable counterparts, with more vendors focusing on healthier, all-natural and organic ingredients. As just one example, Brockton, Mass.-based Fairfield Farms Kitchens makes all its soups now with reduced-sodium sea salt. On the convenience side, Hope & Tim’s soups (from Lantana, Fla.-based Atlantis Foods) come with their own Starbucks-type sleeve so they’re easy to hold even when hot.
It’s worth noting that consumers are often trading up with their soup purchases. There are two big reasons why this is good for grocers – Wal-Mart does not compete well in the fresh soup category and, of course, margins are healthier on the perimeter of the store vs. the center categories.
Meal occasions are typically lunch or dinner, but soup can play several different roles. According to Bruce Burke, senior vp/brand marketing for the Original Soupman, New York, N.Y., “Soup is either a complementary part of the meal or it can be the entire meal in itself. The typical consumer of superpremium soups is an adult who is fairly affluent.” Jim Smith, vp of retail sales for the company, observes that shoppers may be buying for the family, for a gathering of friends or just for themselves. He concludes that “Superpremium soups are appealing to these shoppers on several facets. They view the very heavy, thick soups – the ones that are more like a stew – as a special value, too.”
Cross merchandising refrigerated soups in the cold case of the produce section near bagged salads and cut vegetables can pay off. So can placing family-size portions of chilled or ready-to-eat hot seafood soups and chowders in the seafood section, according to Kettle Cuisine, Chelsea, Mass.
Manufacturers urge retailers to use signage to suggest soup as a part of meal planning, and to steer shoppers to the area. Having a hot soup program that includes some of your refrigerated items can also generate sales, as can “soup and sandwich” promos.
To keep the category interesting, consider stocking a core assortment of eight to 10 varieties throughout the year and then supplementing it with items that have either regional strength or seasonality, suggests Harry’s Fresh Foods, Portland, Ore.
Seasonal touches
During warm months, for example, you might want to load up on lighter broth-based soups, or even chilled or fruit-based varieties. Then, during cooler months, you can bring in heavier, cream-based soups as well as holiday favorites like butternut squash.
Demos help build interest in refrigerated soups, showing shoppers just how much better they are than canned product. Manufacturers also say the category is severely underspaced, which hinders its potential.
Smith and Burke look at Starbucks as a model for their company. Both product offerings command a premium price, which consumers across multiple demographics are willing to pay because of the total value of these high-end brands. One big difference between soup and coffee, however, is the nutritional aspect of the products.
Smith also notes that soup has a certain “feel good” aspect to it. Whether associated with helping a sick person get well – chicken soup for a cold – or a cold person get warm, the “feel good” aspect is deeply entrenched in U.S. consumers’ psyche.
“Today’s consumer is looking for healthier alternatives, observes Bob Sewall, vp/sales and marketing, Blount Seafood Corporation, Fall River, Mass. For example, his company produces soups that are lower in sodium and lower in carbohydrates, as well as vegetarian and vegan varieties.
Where should soup be merchandised? The frozen products have a logical home near the entrees or side dishes. The fresh products have more options, including the salad bar, olive bar, hot food-to-go, chilled food-to-go and the service deli.
Regarding cross-merchandising, Blount’s Sewall says “Most stores display soups with rustic breads, bread boule’s, salads and sandwiches to show different and hearty meal combinations.”
Options vary
The best option depends on the individual retailer’s overall approach to up-scaling. While the trend to dress up the corner grocery store moves across the country in the shadows of the big box stores, superpremium soups are helping convey the message.
Like other categories, new product developers for soup are looking at the growing influence of the Hispanic community on America’s taste palate. Look for new flavors that are bold and spicy and have Southwestern ingredients such as chicken tortilla or roasted Pablano peppers.
Although The Original Soupman folks are concentrating on their home turf in the Northeast, as they look to the South and West, they expect varieties like turkey chili to be regional hits. Other recipes are in the works that promise a Southwestern or Hispanic aura.
According to Blount’s Sewall, the hottest growth areas to watch include “organics, all natural products and new, original flavors. The gourmet revolution on television today stimulates the consumer to try new and different things. For example, lobster bisque can be used as a sauce over white fish, or mixed with shrimp and scallops over linguine to make a Rockport Marinara.”
Dan Raftery is president of Raftery Resource Network. He can be reached at Dan@RafteryNet.com
• DOLLARS Up 25.2% to $96,534,520. • UNITS Up 23.3% to 22,566,080. • MERCHANDISING Percent of dollar sales with any merchandising, 57.1%, off by 6.1% from year-ago. Display only, 28.8%; feature & display, 4.4%; feature only, 9.2%; price reduction only, 14.6%. • ITEMS PER STORE* Up 2.0% to 5.8. *Items per store: This measure estimates the average weekly number of different UPCs of a selected product available in each store carrying the product aggregate.
‘Eat more soup!’
In her first column of the New Year, Wall Street Journal health writer Tara Parker-Pope proposed six resolutions for people interested in cutting calories and living healthier lives. One recommendation: “Eat more soup. Years of talking to nutritionists have convinced me that soup is one of the most underrated health foods,” she wrote in her column on January 2, 2007. She referenced The Volumetrics Eating Plan by Barbara Rolls of Pennsylvania State University, State College, Penn.
Rolls’ nutrition book explains how soup and other foods satiate hunger on fewer calories than foods with less volume. The book may also contain useful nuggets of information for retailers to post near their fresh soup offerings to help shoppers decide to buy these products. (The report is available at www.volumetricseatingplan.com and www.amazon.com). |