Sector Insight: Soups

Covent garden soups
Covent garden soups

LONDON - An inexpensive, satisfying meal whatever the economic climate, soups look well-placed to thrive during the downturn.

From chicken soup's reputed health-boosting properties in Jewish culture to Andy Warhol's iconic Campbell's Soup prints, soup is a dish with near-universal appeal.
For many, it is the ideal simple, comfort food. It has been prey to shifting fashions, but with shoppers now seeking out convenient, healthy and affordable options, it has under-gone a resurgence in popularity.
There has been renewed interest in the sector from manufacturers, who have been extending their ranges as well as developing a focus on more hearty 'meal' soups.
While tins of soup have long been a store-cupboard staple - Heinz alone sells 289m a year in the UK - the introduction of fresh variants has extended this category and added value to it. This premium end of the market often focuses on the proven-ance or seasonality of its ingredients.
More than eight out of 10 adults have eaten soup in the past 12 months, according to TGI, but penetration is falling. It is most likely to be eaten at lunch rather than in the evening.
In 2007 the soup market was worth £462m, according to Mintel, a rise of 4% on 2006. Ambient soup accounts for the biggest section of the market - about 60% - but the chilled varieties have experienced the strongest growth, rising 7% to a value of £111m.
While the increase of upmarket chilled varieties has attracted shoppers not normally drawn to this sector, the shift in preference has hit sales of dried soup. Cup a Soup may have championed the concept of a fast meal for one, but dried-soup sales are in long-term decline, achieving a value of only about £76m last year.
The healthiness of soup naturally depends on the ingredients used, and the rise of GDAs and traffic-light food-labelling systems has brought salt content into sharp focus. The high levels found in some brands have pushed what should otherwise be a healthy choice into the danger zone.
Much of the category's NPD, however, has focused on recipes with lower salt, sugar and fat content, as well as avoiding artificial colours, flavours and preservatives. Baxters relaunched its Healthy Choice range last year with reduced salt and invested in an ad campaign to promote the change.
Heinz leads the sector with a 32% share and dominates ambient sales, but it has expanded its presence, with the launch of the Farmers' Market, Soup of the World and Taste of Home brands last year. Farmers' Market covers both tinned and fresh variants, and the move into the latter category means Heinz is now challenging the dominant New Covent Garden Soup Co, while undercutting its pricing.
Premier Foods has ditched the Campbell's brand in the UK, shifting the focus of its soup activity onto Batchelors. It also owns the Loyd Grossman brand, which includes a range of soup sold in pouches. It extended this format with the launch of chunky ready-to-eat Batchelors Soupfulls last year.
Brands operating in the healthy and diet segments have been doing well. Sales of Weight Watchers from Heinz have risen, and it added four frozen chunky soup meals last October. This year it advertised the range with the strapline 'Lose weight, not taste'.
Soup in the UK is a colder-weather staple and shoppers remain unconvinced of the merits of lighter or cold-serve soups such as gazpacho; 70%
of volume sales are made between September and March.
This market is expected to continue to grow steadily for the next five years, to reach a value of £569m by 2013, according to Mintel. This represents a 3% growth in real terms.

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