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    GROCERY: Soup: Bowled over

    Premium soups are helping the category find its place in the evolution of the healthy meal.

    By Bob Phillips

    In the hands of increasingly savvy marketers, soup, that historic first-course appetizer, is now turning the center plate into a bowl. The sometime medicinal cure-all has been undergoing a dramatic transformation, energized by products available in a wide variety of shapes, sizes, flavors, and price points, many of which are tapping into the demand for healthier, convenient meal options.

    The days of soup as merely a canned commodity business are over. Marketers and retailers have given the category a whole new platform: premium soups that are a factor in both canned and refrigerated formats. This trend not only has the potential for brightening things up in the center aisles, but also for leaving its mark on the periphery via the chilled case, deli, and foodservice.

    Once upon a time, soup conjured up images of either tomato or chicken, primarily in red-and-white cans. Baby boomers grew up with those comforting images -- but nostalgia only goes so far.

    "We were so intimately connected to kids through our sponsorship of [shows] like Lassie, going back to the '50s and '60s," says Campbell Soup Co. spokesman John Faulkner. "But we didn't really have that kind of connection with kids in the last 10 to 20 years. So over the past few years, we've gone back to talking to kids. We really felt like we lost a generation or two of kids."

    Camden, N.J.-based Campbell has been ratcheting up its marketing to children recently, by airing animated, music-driven commercials on Saturday morning kids' programs, as well as the Cartoon Network. "[The ads are] fun," says Faulkner. "They talk to kids in a way that they connect to."

    But the soup category has grown beyond rugrats, and Campbell knows it.

    "You ask who the soup consumer is: young, old, single, empty nesters, young families...the short answer is 'yes,'" notes Faulkner. "Our soup is in 90 percent of homes somewhere over the course of the year, and probably 100 percent of homes eat soup in one form or another."

    But as far as John Bello, president and c.e.o. of the Original SoupMan in New York, is concerned, there is a commonality. "The soup consumer today is health-conscious," says Bello, who heads up the new premium refrigerated brand that was introduced last year.

    Retailers agree that while it may be difficult to identify the "prototypical soup consumer," all segments therein are interested in the healthy consumption profile the category offers.

    "Health concerns play a big role in the soup category," says Jeff Lowrance, spokesman for Food Lion, a Salisbury, N.C.-based subsidiary of Delhaize America with over 1,200 units in the Southeast and Mid-Atlantic states. "This year, soup companies have focused on lowering sodium content of their soups. Lower fat and calories had been targeted in previous years."

    "Generally speaking, compared to other things, soups are low-fat, low-calorie, high-volume properties," notes Faulkner. "Obviously, the Achilles heel for us has been sodium."

    According to Faulkner, his company has been proactive in offering lower-sodium alternatives, mindful of the fact that high sodium can be detrimental to overweight people, consumers with high blood pressure, and those susceptible to strokes and heart attacks.

    "Campbell was one of the first companies to label for sodium, going back to the '70s," he says. "At that time, we came out with low-sodium [red-and-white] soup as well as the Healthy Request line, so we had low- and lower-sodium offerings."

    Now Campbell is embarking on a new lower-sodium execution. "We've certainly acted on the pressures against the food industry to reduce sodium," says Faulkner.

    "[We carry] low-sodium soup offerings from both Campbell's and General Mills [Progresso]," observes Duane Proulx, v.p. of grocery procurement for Bashas' Supermarkets, a 150-unit chain based in Chandler, Ariz.

    Still, according to Faulkner, low-sodium products have historically been a relatively small segment of the overall category. The reason is obvious: compromise in taste.

    The Original SoupMan's Bello sums it up succintly: "Soup is high in sodium because it's a savory food. That's what gives it body and flavor.

    "But soup is real food," he stresses. "[It] has great ingredients for the most part -- meat, chicken, vegetables -- nothing artificial."

    Real meal deal

    Perhaps the most exciting thing going on in the category today is soup's repositioning from an afterthought to the focal point of a meal. One dividend is the appearance of a new segment of superpremium soups in supermarkets.

    Cambpell's version of the move toward soup as a meal has been ongoing for several years. The company has positioned Chunky as a meal for men, for example, usually offered at a premium price point. The message has also lately penetrated beyond guys.

    "That's going to be our message this year, the 'mealness' of Chunky, if you will," says Faulkner. "We're really talking to guys who want a hearty, fills-you-up kind of soup. But the reality is that 40 percent of Chunky soup is consumed by women."

    Meanwhile other brands are seizing the day by expanding the category beyond its center store positioning. As such, refrigerated superpremium soups have become hot products in many supermarkets.

    According to ACNielsen, dollar sales for the overall soup category were up 37 percent for the 52-week period ending July 15, 2006 in supermarkets with at least $2 million in annual sales (excluding supercenters). Over that same period, unit volume was down 4.3 percent -- a good indication of high-end growth in the category.

    "We're positioning soup as the centerpiece of a meal," says the Original SoupMan's Bello. "People are beginning to understand that they don't need to eat as much as they do, and that this is a healthy way to eat."

    Another refrigerated brand, Chelsea, Mass.-based Kettle Cuisine, sees its competition more in the deli section rather than the center aisles.

    "Our soups, like other items in the prepared foods/deli case, are ready for consumers to use immediately or within a week," says Brian McGinnis, Kettle Cuisine's retail business manager. "The occasion for canned, dry, and frozen soup is usually very different. Those items are typically stored for some time before consumption. The fresh soup consumer is typically shopping for lunch or dinner the day of the shopping trip, or the next."

    "[The superpremium segment] has been fostered by the rise in popularity of salad bars with soup stations that offer consumers fresh gourmet soup," explains SoupMan's Bello. "The consumer pays a premium for it, and it's been popular with both retailers and consumers."

    "In terms of cost, relative to the other fast-food options, I think premium soup is as good a value as it gets," adds Campbell's Faulkner, who notes that that the company thinks "the upside of premium soups is enormous."

    "Campbell's introduced an aseptic pack last year under the Select brand, and positioned it as very high-quality," says Bashas' soups buyer, Steve VanderPloeg. "It's showing some growth, and is purely incremental to the category."

    "We're looking to expand the refrigerated soup idea at retail," observes Faulkner. "Not just in the deli, but also the refrigerated case. We're also working with our partners to sell the Campbell's proposition in the deli section. Instead of just 'Chicken Chowder,' it's 'Campbell's Stock Pot Chicken Chowder,' like Wegmans is selling."

    Merchandised properly, soup can simultaneously drive traffic and increase revenue -- a perfecta in the supermarket arena.

    "We have identified soup as a high consumer penetration category," says Bashas' Proulx. "Therefore, it performs well as a traffic feature during the cooler months. We merchandise soup with displays as a meal solution. It's an opportunity to increase sales with tie-ins."

    By Bob Phillips
    • About Bob Phillips

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