HEALTHY GAINS IN SOUP

LISA SAXTON

If the soup category was a television serial, the latest cliffhanger might go something like this: Is this the end of soup concentrates? Will no-fat soup slip off its growth perch? Can soup survive the dastardly summer heat?

While the questions are presented dramatically to ensure that viewers "tune in" next time, the answers are less theatrical. In order, they are: Maybe. Perhaps. Good chance.

That's because the soup category is changing. "Consumers have been moving over to healthier soups. You have Healthy Choice and Healthy Request from Campbell's. And they've had pretty good growth," said a spokesman for Montvale, N.J.-based A&P. According to numbers supplied by A.C. Nielsen Co., Schaumburg, Ill., while the entire canned soup category was up 3.1% for the 52-week period ended June 10, Healthy Choice soups were up a whopping 19.5%.

Indeed, healthy products are doing so well, A&P soon will be adding its own private-label line of health-oriented soups to cash in on this craze. "Healthy soups are over 30% of our homestyle soup business," the spokesman explained. "And broths are also growing in the healthy area."

Indeed, it appears that adding water just isn't convenient enough these days.

"The ready-to-serve soups are really starting to move," said David Talbott, grocery buyer at the Lexington, Ky., division of Super Food Services. "The old concentrate where you add a can of water or milk, I can see that being phased out."

Regardless of how consumers come to announce that "soup's on," they're finding it a dish for all seasons.

"It doesn't have to be cold to eat soup," said Mark Polsky, senior vice president of Rockville, Md.-based Magruder Inc.

"This is regional, but we [move] soup year-round now," added Super Food's Talbott. "Whereas before, soups used to be more of a seasonal-type item. In the summer with Campbell's, for example, I used to work [order] it every two to three weeks. Now sales are so good, I'm working it every week.

"Of course," he conceded, "in the winter, sales still jump more."

"In Houston we don't get a real winter," said John Burger, grocery category manager at Randalls Food Markets, Houston. "The coldest we get here is 45 degrees. So the season for soup is during the holidays, when people use it for cooking purposes. That's when we certainly see a lift in sales." Nevertheless, Burger promotes the product year-round. "Campbell's has done a great job of really trying to take the seasonality out of their soup. The best thing that ever happened to them was the soup-and-sandwich [product] in the summertime. We still do some promoting on the soup-and-sandwich theme," he said.

Soup easily fits with other items, too, making it ideal for cross-merchandising.

"We do some cross-merchandising with items in the produce department and the broccoli and cheese [soup]," said Calvin Dale, grocery buyer at H.G. Hill Stores, Nashville, Tenn.

"Soups and cooking soups respond well to promotion, especially now with Thanksgiving just around the corner," said Dale. "And we have an annual promotion in January during National Soup Month."

"In the winter, we've always cross-merchandised the Campbell's broccoli and cheese with the potatoes. That's always a good classic item," said Ron Neal, grocery manager at Strack & Van Til Supermarkets, Highland, Ind. "And, of course, you've got your crackers."

"There's a lot of opportunity for cross-merchandising," said Randalls' Burger. "You have crackers, chili, produce; and that's all done at store level."

"Basically, our cross-merchandising is not done in advertising," the A&P spokesman explained. "Generally, it's done in-store. We'll have soup and crackers, soup and tissues. And it will be a combination of both national brands and private label. For instance, if we have a national brand soup, we might have a private-label cracker."

Private-label products may not have as much of a presence in soup as some other categories, but their profile has become more prominent at A&P.

"We added a line of private-label soups that went to all of our stores," the company spokesman said. "We have more than 20 varieties right now.

A&P's private-label soups now account for 20% of sales of soups in those varieties, and that number is growing, he noted. "If you look at the whole [soup] category, we're not up that much. But if you look at like varieties, that's where we're growing. Our growth is outpacing the category's growth."

At Randalls, Burger said private label plays a smaller role. "It's not like it's out there for the sake of being out there. We do sell it. It's just not a big piece of the pie.

"The problem with soups is that the [supermarket] competition keeps the price of the branded so low, it's hard to get a good price spread between the brand and the private label," he added.

One thing that's not hard, retailers said, is getting consumers interested in low-fat products. Soup is no exception.

"Anything low-fat is working very well now," said Magruder's Polsky.

"I would guess roughly 10% of our soup stockkeeping units are devoted to the low-fat items," said H.G. Hill's Dale. "The category has changed drastically over the last few years with the low-fat and less-salt items. Healthy Choice is coming on strong, and Campbell's is doing great with its Healthy Request."

"[Consumers] are still into the health-kick segment," said Paul Rodgers, grocery buyer for the Warsaw, N.C.-based division of Fleming Cos., Oklahoma City. "And the only thing growing in the soup category right now is the low-fat items."

"Campbell's has just introduced three new cream soups that are low-fat," said Randalls' Burger. While he wasn't sure the new items would galvanize shoppers into preparing broccoli and rice casserole, he felt they should definitely trade the consumer from a full-fat to a low-fat product -- which can retail for 15 cents more.

"I'm sure this will bring in some additional users," said Burger. "Or at least it will trade consumers up. That's a gut feeling."

"The low-fat aspect is definitely strong," said Read Handyside, assistant grocery merchandiser at Puget Consumer's Co-op, Seattle, a seven-store operator of natural food stores. "I think fat-free and low-fat together are very strong unless you're positioning toward gourmet, which are high-fat-oriented soups that do fairly well."

Interestingly, Handyside is seeing his consumers -- whom he said "are probably higher per capita label readers than perhaps in a regular grocery store" -- starting to prefer taste over health factors.

"Now I'm seeing a pull-back from full fat-free. Some of our customers are beginning to realize that fat-free is fine, but often it's at the expense of flavor and texture," Handyside explained.

Flavor does appear to matter, according to Fleming's Rodgers, who has seen a trend toward spicier foods, including soups.

"The last few new soup products I've gotten have been a little more spicy. You're getting that influence from the salsas and the cayenne pepper," he said.

"Also, some manufacturers are coming out with West Coast or California-style products. Campbell's has come out with California-style chicken noodle and spicy items like Fiesta Vegetable."

"The other area that's gaining in a major way are the microwavable soups," said the A&P spokesman.