SOUP'S ON 2002

ROSEANNE HARPER

From coast to coast, summer and winter, soup is ringing up sales for supermarket delis like never before.

Quality that keeps getting better and variety that keeps getting bigger have pushed soup to the center of the plate. Indeed, it makes a convenient, nutritious meal when paired with a sandwich or just a hunk of artisan bread.

The consumer's perception of soup has changed drastically over the last few years, thanks in part to advertising campaigns by national brand manufacturers that have portrayed soup in a new light.

"That advertising has done a lot to get people to see that they can make a meal out of it. They're gearing more toward upscale and hearty soups. It's not just chicken noodle anymore and you don't just eat it when you're sick," said one Midwest retailer.

Concepts like St. Louis Bread Co., Panera Bread Co., Corner Bakery and Cosi Sandwich Bar, too, have successfully put good bread, soup and salad together to change soup's image -- and have given retailers valuable cross-merchandising ideas.

Profitability on soup is excellent. Industry observers and retailers estimate that net profit on a top-quality soup could routinely be 30% higher than net profit on a top-quality, fresh-made sandwich, because there's so much less labor involved. And that's why more and more retailers are looking to launch soup programs in their delis.

Trend-setting chains like Wegmans Food Markets, Rochester, N.Y., are doing their part to send the message that soup is a meal. Last spring, the company began merchandising soup, artisan bread and salad together in its chilled cases. Pints and quarts of soup in see-through containers sit next to large clamshell packs of fresh salad at the chain's flagship Pittsford, N.Y., store. A rolling rack heaped with loaves of tempting bread stands right there, too. Not only that, but a glossy photo in a stand on top of the island case shows a bowl of steaming soup, a side dish of salad and crusty bread with butter, just to reinforce the meal idea.

A colorful banner that hangs over the whole display says, "Great Meals Made Easy."

The deli-type containers Wegmans' soups are in carry conspicuously simple-looking labels, thus giving customers the perception that the soups are packed -- and maybe even made -- in-store.

Some retailers are making their own soups from closely guarded recipes or are having outside manufacturers make a menu of soups to their specifications. A top-quality, fresh soup itself serves to set a retailer apart in some marketplaces, but a signature item makes the differentiation just that much clearer, retailers told SN.

"We make our gumbo from an old Cajun recipe, and we do it right in the deli. We start with onions and then make a roux. Every day we offer two kinds -- a seafood gumbo and a chicken/sausage gumbo. It sells very well all year round. Of course, it sells even better during the 30 days we call winter down here," said Vincent Cannata, president, Cannata's Food World, Bayou Vista, La.

Churchill's Market in Toledo, Ohio, set out to make a niche for itself with a repertoire of soups made in-store by chef Lori Nickoli, and it worked.

"Our soups are definitely a destination. Our chef makes a lot of wonderful and unique soups and they all sell well, but my personal favorite is Thai peanut meatball," said Bill Stimmel, owner of the single-unit, upscale company.

For Churchill's, soup is decidedly not a winter-only item, either.

"We have soup seven days a week, 365 days a year, even on 95-degree days. Our chef has been on staff over a year now and she's built a very loyal clientele who knows and expects her homemade soups day after day. When you look around -- at least in the Toledo metro area -- there are very few, if any, retail stores, not counting restaurants, selling homemade soup. Our soups sell themselves. At $4.49 a pound, they're probably too cheap," Stimmel said.

One variety a day is offered and customers help themselves from a kettle in the deli, ladling the soup into a choice of different-sized containers. The containers are weighed at checkout. On a busy day, Churchill's goes through 10 gallons of soup.

"There are days we'll sell out by noon, but we usually have a standby ready. On soup-making days, our chef makes three or four varieties, and we store some of them [in the cooler]. So we'll have some available even on a Sunday morning," Stimmel said.

He added that sales have built steadily since the soup program was launched in 2001, and he expects that pattern to continue.

"There's a soup revival going on around the country. Other retailers I talk to -- even the ones that are using a frozen product -- say their sales have been brisk in the last year. One reason, I think, is that soup is the ultimate comfort food and after Sept. 11 last year and everything else that's going on, soup is great."

While some retailers in the South haven't had much success in the past with soup, they blame the climate. They say it's too hot for soup.

But that's not so in Lebanon, Ky., where Higdon's Foodtown, like Cannata's in Louisiana, has a soupy, regional favorite that racks up terrific sales even on sultry August days. It's homemade pinto beans and cornbread, and rocketing temperatures don't even put a dent in sales, said Jimmy Higdon, co-owner.

"Our customers love that. We sell out of pinto beans and cornbread every day, all year. Then in winter, we'll add another soup, too. Those things do very well for us."

Up North, where it's not a surprise that soup is a best seller year-round, Quillin's in LaCrosse, Wis., took a good thing and made it better.

"We've increased our soup sales by at least 50% easily, and I give credit to making it self-service and to the program itself," said Tony Doering, senior deli manager, for the nine-unit independent.

"It's been a huge success.

We offer one variety a day all summer and then two in the winter. It's phenomenal the soup we go through, easily two cases a day in a store. That's a lot compared to what we did before."

For two years now, Quillin's has had a Campbell's program that gives them a large variety of soups that are brought in concentrated.

"It's just a good, solid program. They give you some nice point-of-purchase materials and the kettles are attractive. We're presenting the soups well. This is a self-serve set-up and I think that's very key, too. Now, customers can come up and look in the pot and when they get a whiff of a good-smelling soup, they're going to buy it."

Previously, Quillin's had offered soup from a dual-kettle fixture behind the hot deli case, but didn't have a consistent program from store to store. Customers had to ask an associate to serve it up, which Doering saw as a hindrance to sales.

Recent research by Campbell's found that no matter what the season, almost half of Americans eat soup one or more times a week. In fact, 98% said they eat soup at least once a week in winter, and even 47% even said they eat it at least once a week in the summer.

Consultants SN talked to noted that soup knows no season these days. In fact, Marcia Schurer, president, Culinary Connections, Chicago, said she noticed particularly large displays of containers of chilled soup in upscale markets she visited when she was in New York this summer.

"Eli's [the spin-off from Zabar's, New York's renowned gourmet deli] on the East Side had one entire wall of soup. They said they have 75 varieties [rotated in and out]. And they're in clear containers so you see the colors. They looked good," Schurer said.

She said consumers are finding that soup makes a nutritious meal for relatively little money, and the increasing variety that's available makes it appealing to serve it more often. Like many other food-related trends, restaurants may have led the way by popularizing varieties that are unusual or considered gourmet.

In fact, the variety that manufacturers of fresh, chilled soups now offer is at least double what it was four or five years ago, said Mark Leenhouts, president of Retail Food Design, a Rochester, N.Y., consulting firm. And some of those manufacturers, like Kettle Cuisine, a company Leenhouts is currently working with, are redesigning their marketing plans to emphasize that their product is fresh.

Many suppliers will create a soup to the retailer's specifications, or make a soup from a recipe that will be an exclusive for that retailer.

"It's not good to be a me-too. You need a signature item. You always win the war when the store is the brand. And when you think about it, soup is a product a retailer can get into with little added expense. It doesn't require much space -- 8 or 10 square feet for self-service," Leenhouts said.

Dierbergs Markets in St. Louis is one chain that is currently planning a fresh soup program for its deli.

"We've been talking about doing this ever since we opened our central commissary two years ago. It'll be good for us. I don't know of any other retailer around here who's making their own soup. We'll make a big thing of the fact that we make it ourselves," said David Calandro, Dierbergs' director of deli/food-service operations.