Price increases drive gains in soup sales

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With strong consumer demand for at-home meal solutions, and rising inflation pressuring pocketbooks, conditions are ripe for sales growth in shelf-stable soups.

The category faces challenges, however — ranging from supply chain issues to a shift in demand toward better-for-you and fresh options, according to retailers interviewed by SN.

Sales gains in shelf-stable soups “are being pushed by inflation/cost of goods and retail [price] increases,” said Grant Meisner, director of grocery for Portland, Ore.-based Zupan’s Markets. “We have not been seeing an increase in volume in the soup category.”

Zupan’s customers have been shifting their purchases away from shelf-stable soups and are instead buying fresh, refrigerated varieties, he said.

Data from NielsenIQ indicate that, while dollar sales of soup across all retail channels rose 8% in the 52-weeks through July 30, compared with the year-ago period, unit sales declined 2.1%, indicating the impact that retail price increases have had on driving up dollar sales despite softening demand.

Related:Soup is once again hot in supermarket delis

Meisner lamented a lack of innovation in the category, noting that consumers are seeking lighter and better-for-you varieties.

“I continue to look for new soup brands, and exciting or trendy flavor profiles that will interest our customers,” he said. “I’m looking for items that will set us apart from the large conventional stores and national brands.”

Growth in Asian dry soup mixes

Meanwhile, Jim Beckett, international buyer at Jungle Jim’s International Market in Fairfield, Ohio, said his soup business “is thriving right now,” despite some supply chain challenges.

“Many of our customers were replacing their restaurant meals with grocery substitutions,” he said. “This trend drove many customers into our ethnic food sections.”

Much of the growth at Jungle Jim’s has been in dry soups, he said, citing brands such as Cugino’s Soups, Shore Lunch, and Asian soups such as Nongshim.

“Ramen and Asian soups are definitely where my action is,” said Beckett.

However, supply levels in the soup category overall have been spotty at best, he said, citing significant delays and increased freight costs.

“We are experiencing severe out of stock items and product deletions in this category,” he said. “We have several issues, such as container shortages, manufacturer labor issues, and vendors going out of business.”

Related:With deli soups on the rise, packaged soup fights back

Beckett said he has had to be flexible in order to maintain a good soup assortment. He’s juggled multiple vendors, brands and sizes, and has been buying some items directly from manufacturers to ensure supply.

“Unfortunately, the outlook is not much better,” he said. “I am writing future orders maybe as much as a year out.”

Meisner of Zupan’s said he has noticed some improvements in the soup supply chain in recent months, however, as of September, the retailer’s soup and broth shelves were full. He said he previously had been warned of potential broth shortages in the fourth quarter, but has since been told all of orders will be filled.

Convenience, versatility boost appeal of soups

Chad Evenson, produce business manager at Providence, R.I.-based distributor United Natural Foods Inc., said he was optimistic about the soup category, as consumers continue to eat more meals at home.

“Soup remains a value and convenience for consumers looking to incorporate variety into their dishes or to eat as a stand-alone meal,” he said.

Soups, especially broths, also resonate with some consumers seeking foods that promote health and wellness, Evenson said.

Ready-to-serve and cream-based soups remain popular options in the category because of their ease of preparation and their prevalence in recipes, he said. Format innovations such as microwavable soup cups are also meeting consumer demand for convenience, he added.

In terms of flavor innovation, Evenson touted UNFI’s own newly introduced Essential Everyday Cream of Jalapeño Soup. The versatile new variety can be incorporated into a variety of recipes, added to a dip, or poured atop a baked potato, he said.