D'AGOSTINO TO EXPAND ITS ALLIANCE WITH DAILY SOUP

ROSEANNE HARPER

LARCHMONT, N.Y. -- D'Agostino Supermarkets here is heating up its association with Daily Soup, a supplier of fresh, gourmet soups that has made a New York name for itself with eight freestanding Manhattan retail locations.

Currently running Daily Soup-branded hot-soup programs in four of its stores, D'Agostino plans to put Daily Soup in 13 more by the end of the year, said a source close to the 25-unit chain.

Next to get Daily Soup is the larger-format D'Agostino store in Rye Brook, N.Y., a suburb north of New York City. That store, which serves as a fresh-foods merchandising showcase for the chain, will add Daily Soup to its meals repertoire next month.

And in a new wrinkle in the program, at the Rye Brook unit Daily Soup products will be served from a branded kiosk at the front of the store, situated among other prepared-food kiosks that are grouped together in the store's Marketta food court. At D'Agostino's other units, the soup is ladled from branded stations in the deli departments.

The supermarket chain's linkup with Daily Soup -- which is one of the first of several trendy gourmet soup shops to spring up in Manhattan over the past three years -- began to take shape late last fall.

After initial sales success at one store in midtown Manhattan, D'Agostino added the branded hot-soup program in the service delis of three more Manhattan locations. The Rye Brook location, however, opens up new possibilities for the soup program.

"We'll be able to offer more varieties there than we do in the Manhattan stores, because we'll have more space," said Carla Ruben, co-owner of Daily Soup, and head of the company's recently launched wholesale division.

"We'll offer at least eight varieties at Rye Brook. The number of varieties we offer is one of the keys to success; it reinforces our message that soup is a meal," Ruben told SN.

While Manhattanites know the name Daily Soup, some education may be necessary out in the suburbs, and Ruben is ready for that.

"A lot of people who live in Rye Brook work in the city, so they know of us. And there have been articles in the paper about us. But we'll have fliers and copies of the articles available," she said.

The first D'Agostino store in midtown Manhattan did so well, selling four to six varieties of Daily Soup hot from the service deli counter, that it brought the program into a second store just three weeks later.

Customer acceptance was quick, Ruben said. "These are not your ordinary soups. Our soups are chunky and hearty, and all the varieties are interesting."

Some examples are: chicken and seafood jambalaya, Tuscan shrimp with white bean, chicken pot pie, gazpacho with grilled chicken, and lentil with ham.

Daily Soup and D'Agostino are aiming to keep customers' interest piqued, too, by rotating the menu everyday. From a repertoire of 150 varieties offered to D'Agostino, four to six varieties are served up each day in the deli.

Daily Soup lets its retail customers know a week ahead what varieties it will be producing the following week. Then the retailer makes up its daily menu from that list.

The fresh soups are delivered to retail locations every day in one-gallon and two-gallon containers; wholesale prices start at $15 a gallon.

D'Agostino is retailing its soups for the same price that Daily Soup's freestanding locations do: from $3.95 to $7.95 for a 12-ounce container, depending on the variety. However, a piece of fruit, a hunk of fresh-baked bread and a cookie are served with the soup for that price.

At this point, the soups in D'Agostino are served by store associates. The product is not offered self-service.

"We're just concentrating on developing D'Agostino's whole soup market right now. Our name brings a lot of recognition, but we need to get people to realize they can get our soup, that they can get a meal, at D'Agostino's," Ruben said.

She conceded that the take-out meal trend has created a great environment for Daily Soup's expansion into supermarkets and specialty stores.

The demand for Daily Soup's product has been so strong that it spurred the company to launch a wholesale division to sell its products via supermarkets and specialty stores, as well as at its own retail shops.

"People were asking where else they could get our soup.