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    Supermarket GROCERY Business: Pedal to the kettle

    Ready-to-serve canned soups have shifted into high gear, propelled by a high-octane mix of new consumer choices.

    By Richard Turcsik

    A revolution's underway over at the soup set. Whether it's due to the richer, heartier ingredients, bold new flavors, catchy commercials, packaging that has made "canned" soup microwavable, or because people are simply too "time-pressed" to add a can of water to the pot, sales of ready-to-serve soups are revving up like never before.

    According to ACNielsen, canned ready-to-serve soups have surpassed their condensed cousins for the first time, accounting for 52 percent of the $2.7 billion category. Information Resources, Inc. says that when taken as a whole, Campbell's condensed soups are still the leaders with over 25 percent of the market, but an increasing amount of sales—and shelf space—is going over to the ready-to-serve.

    "We've been growing dramatically in the ready-to-serve area over the past few years with our Chunky lead brand, and also our Campbell's Select and Campbell's Ready-to-Serve," says John Faulkner, director of brand communications at Campbell Soup Co. in Camden, N.J.

    Private label ready-to-serves are also becoming more popular. "Our success in providing private label, General Mills' acquisition and marketing of Progresso, and the underlying consumer interest in a quick, reasonably priced meal are driving interest and growth," says Joe Roxstrom, managing director, soups & infant feeding, at Del Monte Foods in Pittsburgh.

    "When you look at the trends in the marketplace, in terms of what's going on in restaurants with bolder flavors and heartier types of food, ready-to-serve soup really outperforms condensed," says David Clark, marketing manager, Progresso Soups, at Minneapolis-based General Mills. "It can serve as more of a meal, as opposed to a complementary side dish of soup and sandwich," he says. "Soup has really moved more center of plate."

    That's no surprise. With manufacturers rolling out new varieties like chicken pot pie, chicken with dumplings, and steak and roasted russet potatoes, a can of soup can rival anything on the menu of the local restaurant chain.

    "It's important to come out with new flavors," says Mike McGrath, president and c.e.o. of Country Gourmet Foods, the Pittsburgh manufacturer of the Wolfgang Puck's line. "It's kind of like going into a restaurant and having some new offerings on your menu. You still have the old faithfuls that always do well, but you need to have a little something new brought to the table every now and then." That's why Country Gourmet is adding Wolfgang Puck's Chicken Tortilla, Chicken Dumpling, and Honey Roasted Chicken with Penne to its lineup.

    New varieties abound

    This fall Country Gourmet is also coming out with a new line of Wolfgang Puck's Organic canned soups. "They are similar to our other Wolfgang Puck's products, and really take off on some of the things we've done well with, like vegetable, chicken noodle, and chicken rice," says McGrath. "There is a butternut squash soup that is one of Wolfgang's new recipes that he uses in his restaurants that is really terrific. We'll have several vegetarian dishes, which is important for that group of consumers."

    Expansion is also underway at industry leader Campbell's. "We recently announced our convenience platform—the M'm! M'm! Good To Go Platform—where we're having a big expansion of our Soup At Hand lineup, and expanding Select and Chunky into microwavable bowls," says Faulkner. By late summer, consumers will have 11 Soup At Hand, four Microwavable Select, and six Microwavable Chunky varieties to pick from.

    Progresso currently has 54 varieties in its lineup and is heating up the aisle even more with a new eight-SKU line of Rich & Hearty soups that will begin shipping in July. The line, targeted to consumers who prefer beef and chowder soups, consists of Beef Pot Roast with Country Vegetables, Creamy Chicken and Wild Rice, Sirloin Steak & Vegetables, Chicken and Homestyle Noodles, Steak & Roasted Russet Potatoes, Slow Roasted Vegetable Beef, Three Cheese Baked Potato with Bacon, and Chicken Pot Pie. "These fall right in line with what Progresso is known for, which are distinctive ingredients and adult taste," Clark says. "These include lean beef, pearl onions, and Italian flat beans all in thick, very flavorful, rich broths. They are the thickest and chunkiest soups ever from Progresso."

    On top of that, Progresso is adding three more SKUs to its main line: Minestrone with Chicken, Southwestern Style Chicken with a tortilla-flavored broth, and Chicken & Herb Dumpling. "We have found that as our variety increases we are adding incremental sales to the category," says Clark. "We've never really seen that we've topped out on the number of flavors that we can offer. Consumers in this category buy a lot of units and they buy often. They look for variety and flavor and are always interested in trying new things." Nonetheless, at least at Progresso, chicken noodle remains No. 1, followed by clam chowder, minestrone, and lentil.

    The Andersen's line of soups has found success sticking to the basics. The brand is available nationally, but it's a household name in California. There, Andersen's Pea Soup Restaurants once dotted the San Joaquin Valley landscape, and two locations, unrelated to the canning company, still exist. Andersen's markets ready-to-serve Split Pea, Split Pea with Bacon, and Tomato soups packed in 15-ounce steel cans. However, unlike Campbell and Progresso soups that are canned using the traditional retort method, Andersen's soups are aseptic.

    "Retort super cooks the product, and in many cases overcooks the product and obliterates the flavor," says Howard Covenko, v.p., co-pack sales/marketing, at AFP Advanced Food Products in New Holland, Pa. "Aseptic takes and superheats the product to make it sterile. It is then put into a sterile container and sealed in a sterile atmosphere, so that there is no post-packaging cooking. When you are dealing with something that has delicate flavor and color, aseptic is the way to go."

    Shelf space squeeze

    But Covenko concedes that aseptic canning isn't practical for soups with "particulate," or big chunks, which is why his items are pureed. Andersen's is looking to broaden its product line, and its www.andersens.us Web site lets visitors vote on lentil, bean, or squash varieties, or "write in" another candidate.

    While Andersen's doesn't have trouble getting shelf space in California, where it often outsells the industry leaders, it is an uphill battle in other states where the brand isn't as well known.

    As a smaller player, Wolfgang Puck's also sometimes has trouble getting adequate shelf space to showcase its full product assortment. "It is very competitive out there," says McGrath. "Both Campbell's and Progresso are always competitive, so that makes it a little more difficult for the little guy like ourselves. But we're still holding our own. I think retailers appreciate that we're always in there supporting the brand."

    Smaller players, like Wolfgang Puck's and Andersen's, also have to contend with private label. Cit- ing ACNielsen, Del Monte says its private label business is up 7.1 percent on a volume basis for the 52 weeks through March 22, while the total category declined 0.5 percent. Private label condensed soups were flat, while the total category declined 5.3 percent. Del Monte's ready-to-serve items jumped a phenomenal 47.8 percent.

    "We are under-shelved in private label by virtue of having above average performing SKUs in the category," says Roxstrom. "Our branded competitors have long SKU distribution counts that largely do not reflect consumer trends or fair share of shelf. We continually work with the trade to help identify the greatest opportunities. We offer an independent view filled with honest overall assessments."

    That includes new product development. "When we develop new products, collaboration is the adjective in defining the effort," says Roxstrom. "We identify trends and opportunities. The trade also has ideas, whether from branded competitors, mothers-in-law, or the deli down the street. The great ideas come from many sources, and we certainly do our part to lead that effort with a great consumer and technical effort."

    That means even more varieties of canned ready-to-serve soups will be hitting store shelves soon. It's going to be a hot, delicious winter.

    By Richard Turcsik
    • About Richard Turcsik

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