Go for the gusto

The languid soup sector is in need of revitalization. Category revenues, which totaled an estimated $6.8 billion in 2016, are forecast to grow by just 0.8 percent by 2021, states Mintel, a global market research firm, in its June “Soup — US” report.

Dragging down the market is the poor performance of ready-to-serve wet and condensed soups, which have undergone a sales decline over the last year, Mintel notes.

Despite an overall gloomy sales scenario, there are signs of improvement. Sales of broth and refrigerated and frozen soups are rising. Mintel reports that the majority of refrigerated soup revenues are from private label selections, and the category has low brand loyalty.

A continual launch of new soup options also is likely to trigger greater activity, notes Euromonitor International Inc., a London-based market research firm, in its December 2015 “Soup in the US” report.

Because soup remains most popular with consumers between the ages of 55 and 74, retailers must offer unique alternatives if they are to generate more business from other demographic groups, Euromonitor notes.

“This overall difference in age and ethnicity preference is the catalyst behind much of the new innovation from manufacturers, which hope to better establish themselves outside the group of older consumers, hence the introduction of flavors targeted at younger consumers with more adventurous palates,” Euromonitor states.

But chicken noodle remains the most popular because of its familiarity and use as a folk remedy for colds and flu, Euromonitor notes. Next is meat and vegetable, an option that appeals to consumers who desire a filling one-course meal, while mushroom also ranks high because it is the base for many recipes.

Target the young

Retailers could generate greater interest in store brand soup by earmarking specific varieties, including products with exciting flavors and healthier ingredients, for the large base of millennials, says Ashley Kanary, vice president of sales for Baxters Canada Inc., a Saint-Hyacinthe, Quebec-based soup supplier.

“More people want gluten-free products and items with a natural and clean ingredient deck,” she states. “They want to be able to pronounce everything they are eating. In addition, younger shoppers want flavors that are cool and unique.”

Because of the increasing shopper focus on nutrition, lifestyle options and allergens, soups that appeal to vegetarians and vegans, and that are also organic and gluten- and dairy-free, are resonating with consumers, adds Julie Clements, senior director of product development for Kettle Cuisine LLC, a Lynn, Mass.-based soup supplier.

“The soup category is very much about clean labels and healthy ingredients,” agrees Bob Sewall, executive vice president of sales and marketing for Blount Fine Foods Corp., a Fall River, Mass.-based soup supplier. “A big focus for attracting millennials and baby boomers is having simple ingredients.”

Highlight features on-pack

Packaging, meanwhile, is an effective vehicle for spotlighting soup content and quality, Sewell notes. Transparent containers, for instance, enable shoppers to view ingredients, which is important for the selections that are aimed at health-conscious shoppers and sell in the fresh food sections of supermarkets.

While containers also should have distinctive labels and colors to standout on shelves, the labels must be small enough to enable shoppers to still view the ingredients, he states.

In addition, it is important for labels and graphics to be high in quality, Kanary says.

“Consumers are very visual, and they will not be drawn to packages that lack excitement,” she states. “Messaging on packages also must be easy to read.”

Indeed, Kanary notes that it is crucial for shoppers to be able to decipher copy on containers from a distance of 4 feet.

“Consumers walking down the aisle typically have just two seconds to make a buying decision,” she says. “They will keep moving if they do not quickly understand what they are looking at.”

Messaging, meanwhile, should be relevant to the targeted shopper segments, she notes. Such messaging includes health claims (such as a soup being low in sodium and/or fat-free or gluten-free) and convenience features such as having easy-to-open lids.

“Clear, bold callouts highlighting key ingredients and dietary claims are resonating with consumers and driving them to purchase,” adds Sandy Rega, Kettle Cuisine’s senior director of commercialization. “Consumers are also interested in knowing that the proteins they are eating are from animals raised on a vegetarian diet and never administered antibiotics or growth hormones.” Package design also can influence activity, as many shoppers — particularly younger consumers — are seeking selections that are convenient and simple to use, Mintel states.

“iGens and millennials want packaging that is portable and easy to eat from,” Mintel notes. “Innovative packaging may help position soup as an appealing snack option.”

Merchandising is essential

A major obstacle for sellers of private brand soups, however, is leveraging merchandising techniques that can match the marketing impact of the deep-pocketed national brands.

Cost-effective tactics could include situating displays of store brand items in the high-traffic store perimeter, while also placing lower-priced national brand equivalents next to the national brands on shelves, Kanary says.

“It is easier for shoppers to do comparisons when the products are next to each other,” she states. “They don’t want to walk up and down an aisle to scrutinize items.”

In addition, store brands should occupy prime shelf space for easy viewing — typically between the shoppers’ knees and chins — and be spotlighted with aisle signage, she says.

While retailers also could prosper by forging strategic partnerships with key soup suppliers, they need to first develop mission statements that list the types of consumers they want to attract, and then define the flavors, packages sizes and price points that will appeal to the segments, Sewall says.

In addition, retailers that partner with suppliers that also serve the restaurant sector could be early adopters of emerging flavor trends and opportunities, Clement notes.

And because food trends are changing quickly, it is important that manufacturers and retailers keep the soup section “item rationalized” to ensure consumers are seeing the latest and greatest in what’s out there,” adds Mike Seeger, Kettle Cuisine’s vice president of retail sales.