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Demand for Healthy and Unique Soups Grows, Niche Player Profits
The soup food service and manufacturing segment are poised for growth this year as demand for healthy and unique soup flavors grow, a recent survey from Technomic showed.
At least 50 percent of consumers told Technomic they want to sample “new and unique soups.” Additionally, 35 percent of consumers also buy soup to try new flavors.
A percentage of consumers also said they were willing to pay a premium for soups that contain natural (37 percent) and locally-produced (36 percent) ingredients. Some 40 percent were willing to pay more for premium soups, while 32 percent said they are willing pay more for preservative-free options.
The survey also gauged consumer preferences for salads. Results of the survey were published in Technomic’s Left Side of the Menu: Soup & Salad Consumer Trend Report.
"Soup and salad are traditional favorites, but consumers still expect variety and something different on the menu," said Darren Tristano, Executive Vice President of Technomic, Inc.
"Catering to consumers' need for variety when dining out—while also striking a balance between craveable, healthy, and innovative yet familiar offerings that justify price points—will be important in driving soup and salad purchases. Operators may also have room to ramp up soup and salad orders by promoting their appeal across dayparts and mealparts," he added.
One company that’s taking advantage of the trend is Soupman, Inc. (OTCBB: SOUP), the manufacturer of heat-and-eat The Original Soupman line of soups, which is broadening its product portfolio and marketing initiatives. The company is consistent with the nation’s focus on healthful cooking and eating, making its strategies very effective to keep up with the demand for healthy and unique soups and positioning itself for long-term growth.
Soupman continues to successfully tap the health-conscious market by creating gluten-free and vegetarian options of its soups, as well as a Skinny Soup line that contains just 150 calories per eight ounce serving.
The company also continues to add new flavors to its retail prepared line, allowing soup lovers who have grown to love Soupman enjoy its flavorful soup in their humble abode. In March, the company announced adding Chicken Gumbo, Jambalaya, and Crab and Corn Chowder to its Tetra Pak-packed line of soups.
Competition Heats Up
Soupman competes directly with Campbell and Progresso on so many levels, one of which is shelf space. Since March, the company has shifted to Tetra Pak's Tetra Recart retortable cartons, which offer longer shelf life for products for up to two years. Having landed the soup aisles of more retailers this year by changing its soup packaging, the company has managed to deepen its distribution, thus increasing its bid in the $5-billion soup market.
And while Campbell and Progresso stick to supermarket soup aisles for their revenue, Soupman has diversified its income stream rapidly in recent years, launching a restaurant model called Al's Famous New York Delicatessen & Restaurant and Soup Mobile franchise.
The company also does not heavily invest in advertising but it does get good publicity from TV networks and very recently, from the Superbowl. In February, Soupman was asked to cater to Superbowl spectators, allowing the company to widen its reach.
The Original Soupman is available in over 4,000 leading supermarkets and retailers nationwide, including Walmart, Meijer's, Safeway, Whole Foods Market, Beyar's, Harris Teeter, H-E-B Supermarkets and Pathmark. Its best-selling varieties include Jambalaya, Lentil, and Lobster Bisque and Tomato Bisque. Pricing is affordable--a 17.3 ounce of its soups sells between $4.77 and $5.50, while a pack of 12 retails between $44.32 to $46.15.
Cartons vs. Cans
Consumers has shied away from buying canned soup after it was reported that some cans were contaminated with BPA, a chemical used in polycarbonate plastics and epoxy resin. BPA has long been associated with some forms of cancers, mood disorders, and obesity.
BPA mimics the side-effects of estrogen, and a study published in the Journal of the American Medical Association was able to prove that consumers ingest alarming levels of the substance from eating canned soup daily, Rodale News reported. In fact just a week’s worth of canned soup could increase a person’s BPA levels by 1,000 percent.
Sales of canned soups may be affected as consumers see value in fresh soups, according to a report on Retail Leader. The report also states that the soup’s primary market consists of working adults aged 35 and younger who are particular about the quality of instant food products.
The trend involving healthy and freshly prepared soups in retail has been favorable to Soupman, whose soup varieties are made from over 25 fresh ingredients and 30 percent particulates and are kept fresh for two years by its Tetra Recart packs.
Although not “fresh” per se, the heat-then-eat soups are of the same quality with Soupman’s piping hot soups and are free from artificial flavors or colors. Customers won’t be able to tell the difference between Soupman’s instant soups and in-store servings of its soups.
Soupman first served its premium soups in its Manhattan locations in 1984 then introduced a heat-and-serve version of its soup in 2005. The company has never looked back since, and owes a considerable chunk of its sales from its ready-made soup line.
Emphasis on Uniqueness
Technomics noted that it is essential for restaurants to “emphasize uniqueness” when it comes to soup profiles to keep repeat customers. This is more important than ever now that restaurants are “facing considerable competition from the retail segment” Technomics said.
For example, big-name companies like Campbell and Progresso are investing in future technologies like microwave-assisted thermal sterilization and Ohmic heating that would improve on the quality, taste and color of ingredients in soup. By concocting unique flavors and recipes, soup companies can maintain their edge over companies invested in new technologies, especially if they couldn’t afford to invest in one.
Technomics also added that 54 percent of consumers now are eating soup from home at least once a week, which could be a factor in declining soup sales for restaurants.
The soup industry started rebounding late last year after suffering several years of decline that began during the recession. According to the NPD Group, dollar sales of soup shipped and sold through distributors have grown by over two percent in July 2013, year-on-year. Dollar sales soared the most for soups sold at restaurants, edging up by 3 percent in a year.
“Soup is an example of how understanding a category’s market dynamics and performance metrics can identify a growth opportunity for distributors, manufacturers, and operators,” said NPD SupplyTrack Vice President Annie Roberts.
“In the competitive foodservice marketplace where it’s a battle for share, the ability to pinpoint white space and other ways to grow market share is key,” she added.