SOUPY SALES 2004-01-26 (2)

JON SPRINGER

This could be the year the whole soup category gets turned on its side.

While convenience has driven virtually all growth in the overall soup category in recent years, some retailers are now looking to more sophisticated shelving systems to heat up mature condensed selections.

Around 3,000 stores have installed a new gravity-fed shelving system that rolls 11.5-oz. cans out sideways, assuring neat facings, increased signage, and optimal placement based on how consumers shop. Stores that have switched over to the newly available system are seeing condensed soup sales gains in the 6% to 8% range, according to Camden, N.J.-based Campbell's Soup Co., which developed the unit, called the iQ-Shelf Maximizer.

The bump in numbers would represent a welcome change to a category that's been steadily shrinking as the ready-to-serve and fresh-packed market grows.

The total soup category was flat in both dollar and unit sales for the 52 weeks ended Nov. 30, according to Chicago-based Information Resources Inc. The numbers reflect declines in dollars and units for most condensed soups, and hide the gains made by a number of ready-to-serve varieties, including General Mills' Progresso (up 10.8% in units sold); Campbell's new Soup at Hand varieties (up 291.9%); and private-label, ready-to-serve soups (up 9.5%).

Retailers said that condensed soups have largely fallen out of favor with time-starved consumers.

"Ready-to-serve is just taking over condensed," Tom Yarrows, grocery category manager for Big Y Supermarkets, Springfield, Mass., told SN. "Condensed is less and less every year, and ready-to-serve is more and more every year."

The trend mirrors activity in other categories, Yarrows noted. "Convenience continues to grow because people feel they just don't have time any more. It's happened in prepared foods, and it's happening in soup as well."

Manufacturers have responded to the trend with a kettleful of new products. Last year, Campbell's released seven new varieties of its 10.75-ounce Soup at Hand sippable soups, and expanded that idea into 15.25-ounce microwavable bowls of its Chunky and Select brands. Demand for the latter product is so high, the manufacturer is struggling to keep up, according to a Campbell's spokesman, who said the company is busy making upgrades to its plant in North Carolina to supply packaged bowls and cups of the soups.

Progresso in the meantime launched a new ready-to-serve product line called Rich & Hearty, which is taking aim at Campbell's Chunky franchise.

Rich & Hearty soups seek "adult" consumers who feel soup is more of a main course, said Bibie Wu, marketing manager for Progresso, who noted that recent research shows 46% of Americans feel soup is a meal, rather than an appetizer or side dish.

With 51 stores in Massachusetts and Connecticut, Big Y is smack in the middle of the area with the highest soup penetration in the country, Yarrows said. The chain runs buy-one, get-one sales from the second week of September through the Easter holiday.

"We move a tremendous amount of soup here," Yarrows said. "We've added some private label recently, and that's also doing well."

Price remains the important factor in soup sales at Harp's Food Stores, a 45-store chain based in Springdale, Ark., said grocery buyer Mike Greenhaw. "We've found if you keep the prices competitive, the consumer will continue to buy cans of soup," he said. Campbell's Chunky is Harp's top-selling brand, but recently lowered prices on Progresso soups helped that brand take off, Greenhaw added. "We're also doing well with some of the family sizes. Selling the big cans is a key to growing the business for us."

Harp's has had success at cross merchandising soups with such items as cornbread and crackers, as well as general merchandise such as pots, Greenhaw added.

Cross promoting is one thing, but shopping convenience remains the primary goal for retailers selling Center Store items, including soups. To that end, Campbell's is addressing the condensed soup slump by making it more convenient to choose a particular variety. The company last year added pull tops to all of its cans, and in July began rollout the iQ-Shelf Maximizer units. According to Campbell's spokesman John Faulkner, the units are in close to 3,000 stores today, including Bruno's, Bi-Lo, ShopRite, Weis Markets and Hy-Vee. Campbell's is hoping to have them installed in 7,000 stores by this summer.

The unit inserts into existing shelf space (18 or 26 inches deep), and allows for two facings of cans on their sides, with a large "billboard" above indicating the soup flavor, Faulkner said. In some ways, the fixtures use the same ergonomics found in gravity feeders used for beverages and fluid dairy.

The units can also be used for private-label soups, but Campbell's insists that its Shelf iQ system -- merchandising the Campbell brands in blocks as opposed to "checkerboarding" varieties alongside their private-label counterparts -- is a requirement.

The Maximizer is one device that can "bring to life" shelf re-sets as recommended by the results of a year-long study of consumer behavior in the soup aisle, undertaken by Campbell's and Wilton, Conn.-based consultant Cannondale Associates.

Ken Harris, a partner at Cannondale, said such fixtures can group condensed soups by "flavor clusters," and make the aisle faster and easier to shop. Using the suggested resets with the Maximizer has increased overall soup sales as much as 12% to 15% in some stores, Harris added.

"Those are huge numbers," he said. "This is probably as comprehensive a study as been done in dry grocery in a long time."

Overall, stores using the Maximizer are seeing "high single-digit growth" in the early going, said Faulkner. They also have the benefit of neater, ready-faced shelves. "It always looks good," he said. "Even midday on Saturday when the soup aisle usually looks like a bomb hit it."