Cheap, comforting, and with a hint of retro chic, 2009 should have been a bumper year for canned soup. And if not canned, then pouches, which are working well in other categories thanks to a modern, microwaveable and lightweight profile.
But, in this recession especially, the British consumer is proving anything but predictable, and leaving the previous year's 4.5% growth a distant memory volume sales of canned soup plunged by 5% [TNS 52w/e 9 August 2009]. Even worse was the performance of the pouch, with sales down almost 35% (see p50). And who would have guessed it would be fresh soups that bucked the overall trend, with volume sales up 7.6%?
Last year the economic downturn prompted shoppers to buy cans in droves in a bid to save money. So why is the chiller cabinet now the place to be?
For one thing, fresh soup has been more heavily promoted. New Covent Garden, the biggest branded player, increased the number of promotions by 34% and accounted for 29.5% of all promotions in the category, according to analysts Assosia although, intriguingly, the average saving fell by 42p per promotion, from 43.8% to 36.1%.
The new strategy worked wonders, with value sales of NCG up 8.3% to £62m [Nielsen 52w/e 8 August 2009], though summer sales were boosted by the introduction of two new varieties in May, watercress & crème fraîche and carrot & coconut, which can be eaten hot or cold. The company has also geared up for the autumn and winter with six new varieties.
Own-label NPD activity in chilled also continued. Greencore launched a new three-bean soup for Sainsbury's and three spicy varieties for Asda chilli bean, chicken curry and Moroccan vegetable. And M&S made its chilled packaging microwaveable, bringing it in line with the market.
The quality offered by fresh soup has been a big draw, says New Covent Garden group marketing manager Andrew Ovens, with shoppers foregoing restaurants and takeaways and "replacing them with meals offering the same premium cues at home". Not that the chilled category was without its setbacks. Heinz axed its chilled Farmers' Market range in January, 18 months after launch, with marketing manager Matthew Cullum blaming commercial and supply disagreements with the licensee, Bakkavör. "Sales performed relatively well particularly on promotion and we brought new consumers into the category, but we didn't get the depth and breadth of distribution we would have liked." Cullum adds that Heinz retained the canned version of the brand.
It was left to instant soups to provide the category's most obvious sop to recession, with sales rising 7.4% [TNS] as office workers sought a convenient, cheap lunch.
"Dried soups are well placed given their more convenient and portable format versus canned soups and the trend in packed lunches," argues Nick Wheeler, head of account management at creative agency Miles Calcraft Briginshaw Duffy.
Symington's was quick to embrace the trend launching a six-strong Ainsley Harriott cup soup range in March while seeking to bring younger consumers into the category by offering flavours such as Southern Cajun Gumbo and Aromatic Thai Chicken & Lemongrass.
"Consumers thought instant soup was very 1970s, appealing to an older age group, with flavours such as chicken, mushroom and tomato. But we picked up several learnings from chilled and canned to bring innovation to the category," says Symington's category controller Torquil McCombe. Its efforts seem to have paid off, with the brand growing 18.7% to £5.9m [Nielsen].
Batchelors Cup a Soup has also fared well, posting 14.2% growth to £39m [Nielsen]. It too sought out younger consumers to instant, with its Cup-a-Soup Moments campaign suggesting new occasions for eating soup.
Such successes show consumers are still seeking value and the recession remains real so what's been the problem with cans this year?
One issue is the soaring cost of commodities such as tin plate. Value sales of canned soups are up 7.9% to £305m, despite the drop in volume, as cost increases have been passed on to the consumer. The average price of a 400g can of Heinz Cream of Tomato soup increased by 20.1% to 82p in the big four during the last year, according to The Grocer's G33 pricing survey.
Another contributing factor has been a drop in promotional activity. Canned's share of promotions fell from 72.1% to 69.5%, according to promotional consultancy Assosia, with category leader Heinz cutting both the volume of promotions (down 33%) and the depth of savings (from 40% to 30%). Following unusually strong sales during the wet summer of 2008, just 28% of Heinz soup volume was on promotion last winter compared with 48% towards the end of 2007.
This year's warmer summer also meant soup had the usual summer slump, meaning sales were down year-on-year, adds Asda soup buyer Sarah Dunhill.
Heinz also took the decision to phase out its Soups of the World range after sales fell by 22.2% to £2.1m [Nielsen], with Cullum claiming the range's exotic flavours were a step too far for the category. The two best sellers, Italian Meatball & Tomato and Mexican Chilli Beef & Bean, will live on in Heinz's Big Soup range.
Big Soup and the Farmers' Market canned range are performing well in the larger 515g format, Cullum adds. Value sales of Big Soup are up 12.7% and Farmers' Market 18.7% [Nielsen]. "People are eating soup much more for an evening meal, so these large cans are providing people with a more substantial offering."
One brand that has kept faith in the canned format is Baxters, arguing the can has helped rather than hindered its growth of 16.6% to £29.6m [Nielsen].
"Using cans locks in the flavour of our soups better than other formats," says Baxters brand manager Elaine Tewnion, explaining the decision to scrap pouches (see right). The company added 11 new recipes and revamped its packaging in time for the autumn push.
The other casualty was Campbell's condensed soup following the expiry of a licensing deal in 2008, and market share dipped from 3.9% to 3.6% [Nielsen] as it was rebranded under the Bachelors brand. But Premier reports itself comfortable with the decline, claiming it is typical in a transition period. Whether Heinz is happy with condensed can sales is another matter.
Focus On Soup
But, in this recession especially, the British consumer is proving anything but predictable, and leaving the previous year's 4.5% growth a distant memory volume sales of canned soup plunged by 5% [TNS 52w/e 9 August 2009]. Even worse was the performance of the pouch, with sales down almost 35% (see p50). And who would have guessed it would be fresh soups that bucked the overall trend, with volume sales up 7.6%?
Last year the economic downturn prompted shoppers to buy cans in droves in a bid to save money. So why is the chiller cabinet now the place to be?
For one thing, fresh soup has been more heavily promoted. New Covent Garden, the biggest branded player, increased the number of promotions by 34% and accounted for 29.5% of all promotions in the category, according to analysts Assosia although, intriguingly, the average saving fell by 42p per promotion, from 43.8% to 36.1%.
The new strategy worked wonders, with value sales of NCG up 8.3% to £62m [Nielsen 52w/e 8 August 2009], though summer sales were boosted by the introduction of two new varieties in May, watercress & crème fraîche and carrot & coconut, which can be eaten hot or cold. The company has also geared up for the autumn and winter with six new varieties.
Own-label NPD activity in chilled also continued. Greencore launched a new three-bean soup for Sainsbury's and three spicy varieties for Asda chilli bean, chicken curry and Moroccan vegetable. And M&S made its chilled packaging microwaveable, bringing it in line with the market.
The quality offered by fresh soup has been a big draw, says New Covent Garden group marketing manager Andrew Ovens, with shoppers foregoing restaurants and takeaways and "replacing them with meals offering the same premium cues at home". Not that the chilled category was without its setbacks. Heinz axed its chilled Farmers' Market range in January, 18 months after launch, with marketing manager Matthew Cullum blaming commercial and supply disagreements with the licensee, Bakkavör. "Sales performed relatively well particularly on promotion and we brought new consumers into the category, but we didn't get the depth and breadth of distribution we would have liked." Cullum adds that Heinz retained the canned version of the brand.
It was left to instant soups to provide the category's most obvious sop to recession, with sales rising 7.4% [TNS] as office workers sought a convenient, cheap lunch.
"Dried soups are well placed given their more convenient and portable format versus canned soups and the trend in packed lunches," argues Nick Wheeler, head of account management at creative agency Miles Calcraft Briginshaw Duffy.
Symington's was quick to embrace the trend launching a six-strong Ainsley Harriott cup soup range in March while seeking to bring younger consumers into the category by offering flavours such as Southern Cajun Gumbo and Aromatic Thai Chicken & Lemongrass.
"Consumers thought instant soup was very 1970s, appealing to an older age group, with flavours such as chicken, mushroom and tomato. But we picked up several learnings from chilled and canned to bring innovation to the category," says Symington's category controller Torquil McCombe. Its efforts seem to have paid off, with the brand growing 18.7% to £5.9m [Nielsen].
Batchelors Cup a Soup has also fared well, posting 14.2% growth to £39m [Nielsen]. It too sought out younger consumers to instant, with its Cup-a-Soup Moments campaign suggesting new occasions for eating soup.
Such successes show consumers are still seeking value and the recession remains real so what's been the problem with cans this year?
One issue is the soaring cost of commodities such as tin plate. Value sales of canned soups are up 7.9% to £305m, despite the drop in volume, as cost increases have been passed on to the consumer. The average price of a 400g can of Heinz Cream of Tomato soup increased by 20.1% to 82p in the big four during the last year, according to The Grocer's G33 pricing survey.
Another contributing factor has been a drop in promotional activity. Canned's share of promotions fell from 72.1% to 69.5%, according to promotional consultancy Assosia, with category leader Heinz cutting both the volume of promotions (down 33%) and the depth of savings (from 40% to 30%). Following unusually strong sales during the wet summer of 2008, just 28% of Heinz soup volume was on promotion last winter compared with 48% towards the end of 2007.
This year's warmer summer also meant soup had the usual summer slump, meaning sales were down year-on-year, adds Asda soup buyer Sarah Dunhill.
Heinz also took the decision to phase out its Soups of the World range after sales fell by 22.2% to £2.1m [Nielsen], with Cullum claiming the range's exotic flavours were a step too far for the category. The two best sellers, Italian Meatball & Tomato and Mexican Chilli Beef & Bean, will live on in Heinz's Big Soup range.
Big Soup and the Farmers' Market canned range are performing well in the larger 515g format, Cullum adds. Value sales of Big Soup are up 12.7% and Farmers' Market 18.7% [Nielsen]. "People are eating soup much more for an evening meal, so these large cans are providing people with a more substantial offering."
One brand that has kept faith in the canned format is Baxters, arguing the can has helped rather than hindered its growth of 16.6% to £29.6m [Nielsen].
"Using cans locks in the flavour of our soups better than other formats," says Baxters brand manager Elaine Tewnion, explaining the decision to scrap pouches (see right). The company added 11 new recipes and revamped its packaging in time for the autumn push.
The other casualty was Campbell's condensed soup following the expiry of a licensing deal in 2008, and market share dipped from 3.9% to 3.6% [Nielsen] as it was rebranded under the Bachelors brand. But Premier reports itself comfortable with the decline, claiming it is typical in a transition period. Whether Heinz is happy with condensed can sales is another matter.
Focus On Soup
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