Soup Category Still Has a Healthy Pulse

The “Force” has hit center store, and it is an indication of where the soup category is headed.
In late fall, Campbell Soup Co., in collaboration with Disney and Lucasfilm, debuted “Star Wars”-themed soup labels for the company’s limited-edition “Star Wars” licensed soups. The Camden, N.J.-based center store stalwart backed the rollout with another clever TV spot in its “Made for Real, Real Life” campaign, which was part of the promotional push for its condensed soups line launched to coincide with the mid-December release of “Star Wars: The Last Jedi.”

The new LTO, one of several moves by industry leaders, shows that the soup category—though admittedly experiencing a slump—still has a healthy pulse.

In fact, grocers who stock center store with the right mix of shelf-stable soups and broths can attract consumers who continue to embrace soups (40.5 million Americans used eight cans or more of canned or packaged soup, broth and stock within a week in the United States in 2016, Statista reports). They can also capture shoppers looking for new soup options in a category Euromonitor predicts will hit $5.2 billion in sales in 2021.

Down, up, holding steady: All are adjectives that describe what’s happening in the soups and broths category. Overall, soup experienced a volume decline of 2%, according to Soup in the U.S., a March 2017 Euromonitor report that tracked the market using retail sales data from 2012-2016.More recent data from Chicago-based market research firm IRI shows that condensed wet soups have taken the biggest dive, dipping 1.19% in dollar sales and 3.04% in unit sales for the 52 weeks ending Nov. 5, 2017.

But there are bright spots. Broth/stock topped the soup category in dollar and unit sales growth, besting bouillon, condensed wet soup, dry soup, ramen and RTS wet soup, IRI reports. According to IRI, dry broth/stock had sales of $75.6 million dollar sales growth of 4.90% and 4.63% unit sales growth for the 52 weeks ending Nov. 5, 2017. Wet broth/stock sales totaled nearly $1.1 billion, representing 4.65% growth in dollar sales and 3.93% growth in unit sales for the same period, IRI reports. 

Bone broth has experienced an especially strong run. U.S. retail sales of shelf-stable bone broth more than tripled in the past year, to $19.7 million, with the quality and convenience of shelf-stable leading the market above frozen and chilled, according to SPINS MULO (multioutlet) Natural channel and Specialty Gourmet channel for the 52 weeks ending Jan 22, 2017.

Shelf-stable soups have earned a reputation as old-fashioned because they’ve been disproportionately popular among consumers ages 55 to 74. That perception has made them particularly unpopular with millennials, who “are increasingly health-conscious and have avoided the high sodium and artificial ingredients contained in many soup products,” Euromonitor says.
The plus side: Savvy manufacturers are innovating to help the category recover.

Campbell’s is one example. “Over the past 10 to 15 years, consumer tastes and preferences have undergone a major revolution as people have become more aware and mindful of where their food comes from and how it’s made—simply put, consumers want fresh, wholesome, natural ingredients,” says David Kraus, marketing manager for Campbell Soup Co. 

“At Campbell, we are continually investing in and developing products that reflect these consumer demands, and believe that brands that can address this desire for minimally processed and healthful ingredients will ultimately succeed in the aisle.”

But those products are not the kind of canned soups that warmed baby boomers’ childhoods. Many are better-for-you products with no artificial ingredients and lower sodium content—features intended to appeal to millennials. 

“To stay on the pulse of consumer taste and food trends, our R&D and culinary teams regularly use research and talks to consumers about what new foods they are interested in. It was this type of research, plus internal passion for the idea, that inspired our new line of Well Yes soup, which debuted last year,” Kraus says. “The line of soups—which now come in 14 varieties—features purposefully chosen, nutritious ingredients like farro, kale and wild rice, and notably includes non-GMO ingredients with no artificial colors or flavors.”

Natural and organic soups are elevating the category overall. Leah Dunmore, VP of marketing for Hain Celestial Group Inc., says the segments “are quite healthy and driving most of the category growth. Organic broth and bouillon are particularly strong as millennials embrace cooking at home and look for ways to boost the flavor of their dishes.” 

Much of what’s happening at retail today is being driven by what’s happening in foodservice. The soup category is no exception.

While soup consumption in foodservice has held steady over the past couple of years, operators in the soup category “will have to re-establish the healthfulness of soup while innovating to incite cravings and appeal to consumers’ desire for new and unique flavors,” per Technomic’s 2016 Soup & Salad Consumer Trend Report.

The entry of celebrity chef and restaurant brands into the retail arena is helping bridge the worlds of foodservice and retail where soups and broths are concerned.

Two examples: Wolfgang Puck’s line of signature USDA-certified organic soups, and super-premium Good, Really Good Chicken Broth from Zoup Fresh Soup Co., which operates 103 restaurants in the U.S. and Canada.

“We’ve had soup restaurants since 1998, and serve soup to approximately 1 million people every one to two weeks—so we are face to face with our customers,” says Eric Ersher, founder of Zoup. “I didn’t think the market really needed more types of chicken broth, but I kept hearing, ‘Why doesn’t chicken broth sold at grocery stores taste as good as what’s served at restaurants?’ It seemed there was an opportunity in the superpremium category and our customers said there wasn’t anything available, so we stepped in to fill the void.”

Based on sales, it was a void begging to be filled. Sales of Good, Really Good chicken broth, bone broth and veggie broth—packaged in glass jars and priced at $5 per jar—have doubled over each previous year. The company is on track to triple 2016 sales, and 2017 sales have exceeded quarterly projections by 150%, the company reports. And in keeping with culinary trends, the broths are low-calorie, no-carb and paleo-friendly, as well as hormone-, gluten-, GMO- and fat-free.

Understanding soup trends as they relate to center store is important, but how can retailers turn those trends into sales? Pros on the front lines of product development have some advice.

“The natural and organic category is where both the growth and the margins are,” Dunmore says. “So as consumers continue to look for better-for-you options, you’ll do well by making it easy for them [to find those kinds of products].”   

Ersher recommends carrying “differentiated products with recognizable brand names” and “looking for niches where there is pent-up demand.” 

A new business model just might be one answer to the downturn in soup sales. According to a Dec. 1 story from Bloomberg, Campbell Soup Co. plans to launch a pilot program in January testing an online service that will deliver premium, heat-at-home soups to customers’ doors.

The company also is working on “crafted” soup made with local ingredients and packaged in glass jars.

“As a company, our goal is to reinvent the center of the store—which includes soup, but it’s much more,” Mike Paul, a Campbell’s VP tasked with leading “disruptive innovation,” told Bloomberg.

“My team is really interested in challenging the conventional CPG model and experimenting with how products are developed, how brands are born and how we go to market.”