Will soups sustain a longer peak season?

September 10, 2010

As we head into the autumn and winter months where soup consumption indexes highest, it will become clear if the soup category can shake its sales lethargy.

As we head into the autumn and winter months where soup consumption indexes highest, it will become clear if the soup category can shake its sales lethargy. Campbell Soup, which saw U.S. dollar sales of its soups slip 5% in the latest quarter and four percent in the full fiscal year, is ready to launch a $100 million+ advertising campaign in an attempt to do just that and help grow the category.

If it gets consumers thinking again about soups as a simple meal solution, the category could more effectively stem competition from other low-cost meal alternatives such as frozen pizza and macaroni and cheese.

What Campbell experienced in its fiscal year largely parallels the performance of the total soup category in U.S. food stores. During the 52 weeks ended August 7, 2010, dollar sales of soup (prepackaged, UPC-coded products only) declined by 4.2% to $3.89 billion on a 2.4% equivalized unit volume dip (16 ounce basis), Nielsen reported.  

The canned soup segment still commands $3.06 billion of this category, even though the segment was down 5.5% during this period. Within canned soups, brands suffered a 6.7% dollar sales drop to $2.64 billion, while private label stretched its four-year run of gains to $414.9 million.

If consumers had wandering eyes, the instant meals segment within this category was one beneficiary. It too extended its four-year run of gains with a 7.0% dollar sales jump to $122.2 million on an 8.0% EUV boost, the Nielsen data showed.

But more sales likely migrated to other categories – and trends of the past two years suggest that chicken soup might be in order to help this category reinforce its classic position in consumers’ minds as a go-to quick, simple, value meal.

Still, there are two key positive trends shaping the soup category:
First, by examining four-week periods of Nielsen data over the past few years, F3 found that the peak soup season has expanded since before the recession hit. In that less-stressed pre-recession period, the highest purchase indexes reflected consumption between November 2007 and February 2008. However, it didn’t take long before peak indexes reflected a more drawn-out October 2008 to February 2009 consumption period. 

Second, sodium presence claims on soup packages appear to be making the category more acceptable to health-conscious consumers. How far manufacturers can go while keeping their signature product tastes remains to be seen, but F3 sees this as a potentially powerful springboard for sales, especially to Boomers and seniors who contend with more health conditions that necessarily affect their food purchases.

Look back four years and dollar sales of sodium presence claim soups jumped 45.1%; three years ago they rose 18.4%; two years ago, they were up 6.0%, in the latest 52 weeks a rise of 1.4%, according to Nielsen. These were achieved with generally similar EUV gains during this stretch.  This shows a continued popularity and perhaps a maturity of this segment as well.  Within every segment of the shelf-stable soup category, products bearing sodium presence claims were up in dollar sales these past 52 weeks—canned soup, up 1.3%; bouillon, up 1.1%; soup mixes, up 9.3%, instant meals, up 81.1%, Nielsen reported.