Soup sales slow, innovation needed, says Mintel

By Lorraine Heller

- Last updated on GMT

Related tags: Soup, Brand, Mintel

Soup sales in the US have slowed over the past year, prompting
Mintel to suggest that manufacturers and marketers need to rethink
their level of innovation and their market strategies if they want
to grow sales over the next five years.

According to a Mintel report update issued yesterday, sales of soup in the US are estimated to reach around $5bn for 2007, a 25 percent increase in current terms and a nine percent increase in constant terms since 2002. However, the report identifies that much of this growth was due to a "one-year leap"​ in 2005, resulting from packaging innovations that started in 2004 and successes in soup sold by weight. But since 2005, sales have grown only slightly in current terms and declined in constant terms, said Mintel. Pressures on the market include competition from other categories such as frozen meals, refrigerated foods and foodservice. Brand loyalty for soups is low, and consumers are increasingly turning to private label as they seek out cheaper options. Mintel's Soup-US-September 2007​ suggests four major ways to help boost sales in the near future: get soup out of the cabinet; build brand loyalty; leverage the sales momentum of refrigerated soups; and explore new usage occasions. Among soup eaters that participated in a Mintel consumer survey, 45 percent said they often kept soup in their cupboards for weeks before it is consumed. In order to increase people's use of soup, and to get them to replenish their stocks more often, Mintel suggests that manufacturers work with supermarket bakeries to make baked goods that match certain soups. In addition Mintel says manufacturers need to find easy, fun or nutritious ways to customize soup to make it a meal, for example through the addition of hot sauces or garnishes. In terms of brand loyalty, only 13 percent of soup eaters say that the brand is the most important factor when selecting which soup to buy. According to Mintel, one way of addressing this challenge would be to develop more soups that offer health solutions, such as more vegetable variety to address the USDA's latest guidelines, soups with immunity system boosters, or detoxing soups. In addition, soup firms can explore ways to offer soup as more convenient snack or meal option, such as portable soup packaged with 'mix-ins', or microwaveable snack-size soups. Manufacturers should also "take a very active and visible stance in causes that are meaningful to soup consumers,"​ said Mintel. The report also says one way to grow sales would be to leverage the growing sales momentum of refrigerated soups. This could be accomplished by giving fresh soup buyers a greater selection in terms of low-sodium and low-fat versions, it said. New usage occasions for soup also need to be explored - although lunch is the most common time for soup consumption, it could be positioned as a snack, or maybe even breakfast, said the market researcher. In a consumer survey conducted by Mintel, 26 percent of soup eaters said they would eat a soup that was made to be eaten for breakfast. The new report divides the soup category into six segments. The largest segments are ready-to-serve soup and condensed soup, which together represent two-thirds of the market. However, the segments showing the most growth over the review period are refrigerated/fresh soup (up from $8m in 2002 to $101m in 2007) and ready-to-serve broth (up from $301m in 2002 to $446m in 2007). Refrigerated soups have benefited from the fresh image they have and the unique flavors being offered, said Mintel. Ready-to-serve broth has grown as a result of improved packaging (aseptic cartons) and product innovations, such as low-sodium, flavored or organic. According to Mintel, flavor is the number one factor that influences consumer choice, identified as more important than price, health or brand. More than half of people who eat soup said they like to try new flavors of soup. "Clearly aware of how important flavor innovation is in the category, soup manufacturers often release new flavors and varieties. However, it seems like a lot more can be done to generate interest and entice consumers' tastebuds. As one example, manufacturers could use - and even extend - the idea of Mexican Painted soup by offering soups that can be mixed in or on top of one another for flavor adventures,"​ said Mintel. The report forecasts that total sales of soup in the US will increase to roughly $6.3bn by 2012. This reflects an increase of 26 percent in current terms and 13 percent in constant terms. "Unforeseen innovations in soup that fulfil consumer needs could make sales higher than anticipated over the next five years. Soups that are positioned as being functional could encourage greater category usage among health-conscious consumers. In addition, the making and marketing of more premium, 'like-homemade' soups would like make sales higher than anticipated,"​ said the report.

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