In the Soup

JULIE GALLAGHER

As a shopper enters the condensed soup segment of a grocery store, her internal clock begins to tick. Just 50 seconds later it's time to move on.

Although seemingly insignificant to the average consumer, Campbell Soup Co. takes this window very seriously. So much so that it spent two years scrutinizing the moment of truth, analyzing everything from shoppers' pupil diameters, respiration and pulse rates with help from a cultural anthropologist, to more traditional research methods. It discovered room for improvement.

“Today a lot of those 50 seconds are being used to find what they came in for, and they will only use what's left over to explore other [soup] options,” Phil McGee, director of insights and category management at Campbell, told SN.

During the next year, the soup maker will work with retailers to reconfigure 24,000 iQ-Shelf Maximizer systems for improved condensed soup navigation with color coding and a new layout. The move comes nearly a decade after the soup maker revitalized condensed soup sales with the initial introduction of the gravity-fed shelving system in 2002. At a time of slipping sales, the iQ-Shelf Maximizer could once again imbue the category with new life.

Sales of condensed wet soup were down 0.74% during the 52 weeks ending Jan. 24 in the food channel, according to Information Resources Inc., Chicago. The segment's largest volume line, Campbell's condensed soup, took a more significant turn, down 3.5%, while private-label options drove an 8.3% sales increase, but on a much smaller base. This comes on the heels of years of less than stellar sales, noted David Browne, senior analyst at Mintel and author of its recent soup report.

“Condensed soup accounts for roughly 30% share of the soup market, but it has not performed well since 2004,” he said. “It's very flat and probably inflation is the only reason why we've seen any type of growth.”

Ready-to-serve wet soups had an even poorer showing with sales falling 9.1% during the year ending Jan. 24. No. 1 brand Progresso's RTS wet soup sales were down 11.5%, followed by Campbell's Chunky Soup, down 12.6%, and Progresso Light RTS soups, up 6.8%.

Soup seems like it would do well during recessionary times given its reputation as a relatively healthy and inexpensive meal option, but it's facing increased competition.

“From management's perspective, the recent sales volatility reflects both changing consumer buying patterns and competitive activity across the broader ‘simple meals’ universe,” said Edward Aaron, an analyst with RBC Capital Markets, in a report compiled after a visit to Campbell headquarters. “Consumers are buying more on deal, visiting more stores and making fewer stock-up trips.”

All the more reason to make the most of that moment of truth.

“There is still a navigational opportunity to get them to the items they came in for, faster,” acknowledged McGee.

The idea with the iQ-Shelf Maximizer improvement plan is to help shoppers more quickly locate the soups on their list. If that takes just 20 seconds, soup makers have an additional 30 seconds to present shoppers with additional varieties, and the best opportunity to drive incremental sales.

Condensed soups in particular were chosen for the overhaul because, although there is also an RTS version of the shelf maximizer, only about 5,000 such units exist in the marketplace. The iQ-Shelf Maximizer is for all brands, but condensed configurations typically only include Campbell's soups and the retailer's store brand, according to McGee.

“If this does what our research tells us it will do, people will engage more fully with the shelf and consider flavors they never have before,” he said.

Campbell plans to organize condensed soups in four color-coded and benefit-based categories including Classic Favorites, or trusted varieties with high penetration; Taste Sensations, soups with adventurous flavor profiles; Healthy & Delicious, items touting overt health claims; and Healthy Kids, for nutritious soups geared toward children.

This will be a departure from the current set-up, which organizes condensed soups by attributes such as chicken or beef vegetable.

“We found that this wasn't providing the information that shoppers really wanted,” said McGee.

Campbell's goal is not just to sell more of the same varieties, but to incite trial with new types of soup. Research shows that a range of flavor profiles in the cupboard drives more frequent consumption at home. On average, consumers have 9.5 soup products in their house, according to Mintel.

“If someone has a pantry full of chicken noodle soup, they're only going to eat chicken noodle so often,” said McGee.

He's hopeful that a Baby Boomer, for instance, with her more mature palate will be willing to add some Taste Sensations soups to the mix.

Part of the appeal might be lower sodium, especially since Mintel's research indicates that women tend to buy better-for-you soup that is low in sodium and provides a serving of vegetables, while men look for soup products that are high in protein to satisfy their hunger.

With new product reformulations, Campbell is addressing both. It plans to reduce the sodium content in 23 condensed soups by up to 45%, so that nearly half of its condensed soups will have 480 milligrams of sodium or less per serving — considered healthy by the government. It also plans to enhance the taste of its offerings with a specially roasted chicken meat.

The changes are just some of several affecting soup in Center Store.

Food Lion, Salisbury, N.C., is rolling a pilot out to additional stores whereby microwaveable soups are grouped with other ultra-convenience meals, rather than condensed soups. The changes are based on Hormel's Quick and Easy Meal Solutions aisle reorganization plan.

“We are currently working to extend this test, as well as expand the test to additional stores,” said Marty Miller, category manager of general merchandise for Food Lion.

Implementations range from phase one, which just includes ultra-convenient meals, or those shelf-stable offerings prepared in five minutes or less that require no clean-up, to phase three — an entire aisle reorganized in a convenience continuum.

In the latter sequence, ultra-convenient meals like microwaveable soups are grouped in the aisle area nearest the checkout, followed by canned chili and stew that take less than 10 minutes to prepare. Next come boxed dinners that require a protein and take less than 20 minutes to make. These items are positioned in the back of the aisle, closest to the meat section. Condensed soups have a place within the convenience aisle, but they are segregated from microwavable soups.

“By putting microwaveable soup with other ultra-convenient options, it gave the ultra-convenient shopper the opportunity to find many different solutions for different days,” said Bob Samples, director of category planning and support for Hormel, Austin, Minn. “They aren't just looking to solve for one day, but for an entire week.”

Just as Campbell aims to stimulate trial of different varieties of condensed soups, Hormel has found that when presented with a number of quick and easy microwavable options, consumers will purchase more than they would have if these products were merchandised alongside their category parent.

“By creating variety across the meal occasion it drove more volume,” Samples said.

In the old scenario, where a canned chili was positioned alongside a microwavable version, even convenience-seekers would opt for the canned version since it was less expensive.

“Sometimes they'll migrate to the canned solution just because they see value as trumping convenience,” Samples said.

This doesn't happen when the canned and microwaveable versions are separated, he added.

Take, for instance, results from a test Hormel conducted with a retailer who experienced a 15% decline in sales of microwavable soups.

“When they put microwave soup in with the other microwave items, they picked up 10 percentage points [in microwaveable soup sales] vs. the same match panel stores where they did not do that,” Samples said.

It remains to be seen whether Food Lion will experience similar results.

Although she would not elaborate, Miller reports that while RTS soup sales are down, condensed soup is a strong performer at its stores.

“We believe this is because more consumers are cooking at home, and it provides an inexpensive meal solution,” she said.

As the economy improves, Food Lion anticipates that consumers will spend more money in the RTS soup segment.

“We expect to see continued strength in the category,” she said.