Soup

Premier Foods' acquisition of Campbell Soup Company's UK and Irish operations has been surrounded by speculation, especially about what will happen to the iconic soup brand.

Premier has a good record of breathing new life into flagging brands such as Campbell's soup, which was recently delisted by Sainsbury's, but it is using this opportunity to improve economies of scale and it is no secret that it may dissolve the brand while migrating certain recipes to Batchelors.

Numis Securities analyst Andrew Saunders says: "The Campbell's deal was about two things: capacity utilisation in Premier's factories and acquiring brands with which it can do something. The deal included Oxo, Homepride, Batchelors and Fray Bentos. Canning is capital-intensive so it will rationalise by selling some factories and running longer canning lines in others to take on the extra brands."

Campbell's has been in trouble for some time; it recently lost market share to Baxters. However, neither Heinz nor Baxters are likely to benefit much from the brand's demise.

Baxters brand controller Kerr Arthur says: ­"Campbell's soups are mainly used as sauces, so we don't anticipate major changes to the structure of the canned soups market."

Canned soup in general has suffered since the arrival of premium chilled offerings, but it has still managed to maintain respectable growth of 2.4% year-on-year, according to TNS.

Heinz Soups marketing manager Jane Jeffreys says: "Chilled soup is growing quickly, but the consumer profile is different so it hasn't affected the market as much as you would expect. Canned soup has a much broader appeal."

Premium soup has experienced significant growth as consumers trade up. Seasonal ranges, such as Heinz's new Autumn Vegetable & Lentil Soup, have helped grow the canned soup category.

Both Heinz and Baxters have incorporated premium soups into their ranges, with Heinz launching Specials and Big Chunky, which are competing with Baxters Luxury and Healthy Helpings products. But this strategy has not been entirely successful.

Waitrose's buyer for soups and vegetables James Hodgson says: "The perception is that Heinz makes a good standard soup but it hasn't been very successful in the premium market so these products are the target of retailers' price cuts and are actually taking value out of the market."

The other major growth area is in pouches, with ­Baxters being the most recent company to use the format. n



Merchandising Aisles struggle to find the X factor



Shoppers are unlikely to see much theatre in the canned goods aisle. At most, retailers use shelf-barkers to promote their price policy and, at least, shoppers are faced with rows of stacked cans - or half-empty trays.

Premier Foods tried to lift the atmosphere in the aisle when it launched tower packs for Crosse & Blackwell character-licensed pasta in 2003 and again last year with the launch of hourglass cans for Waistline beans, pasta and soup. Both are said to have performed well, yet rumour has it that tower packs are on their way out. Budgens trading manager for staple goods Shaun Quinton says: "I was told that Premier Foods was withdrawing its shelf-ready stack packs in favour of the original shrinkwrapped card format, so something wasn't right. I imagine the decision is more to do with the cost than the performance of the packs themselves, though."

Waistline, on the other hand, is meeting its targets, according to Premier Foods general manager Martin Hall. "The hourglass packaging has encouraged new users to shop the ambient aisle and injected enthusiasm into the category," he says.

"The move from pouches into cans has driven down the price of the Waistline range. The packaging has created strong impact on shelf in a category that is currently quite dull and lacking in innovation."

Canned good are also heavily promoted by retailers and manufacturers to draw attention to the aisle. Hall says: "Innovations or new formats are crucial to growth, but so are mechanisms such as promotions."

In the absence of any truly inspiring merchandising, retailers are developing product placement to entice shoppers. Waitrose, for example, completely reorganised its canned aisle in July.

The store's buyer for soups and vegetables James Hodgson explains: ­"Waitrose is different from other major multiples - we have less shelf space.

"Where Tesco, Sainsbury's and Asda dedicate four-foot blocks to Heinz Baked Beanz, for example, we only have capacity to use two shelves.

"We've put canned tomatoes at one end of the aisle in a six-foot block and baked beans at the other end. In between are pasta, vegetables, gourmet vegetables and pulses. We've created signposting and a reasonable flow mechanism for consumers. It seems to work very well."

Musgrave Budgens-Londis is also developing techniques along the same lines. Trading manager for staple goods Shaun Quinton says it is undertaking range reviews and conducting a lot of work on design and layout across MBL. n