Expert Column: Soup Category Trends Spur Reinvention

Soup –- the ultimate comfort food -– has long conjured up images of grandma hunched over the stove and memories of intoxicating aromas wafting through the house. But declining sales of this venerable and undeniably versatile dish would give grandma pause -- until now, that is. Emerging soup category trends are breathing vigorous new life into the market. But more significantly, they offer food and beverage industry players valuable insight on product innovation and reinvention.

The story starts with declining soup sales, already a long-term trend by 2011, when IRi reported ready-to-serve soup retail sales had fallen more than 6 percent since 2008 in the U.S. The trend is also dominant globally; soup sales have “been on a downward trajectory across most of the Western world for half a decade,” noted Euromonitor International Research Analyst Daniel Grimsey, earlier this year. But he has more than an inkling of the issue: “The problem is not necessarily soup’s fault, but its packaging; consumers are rejecting this packaging format.” 

As Grimsey notes, the cans that are synonymous with soup are not always easy to open; lack the kind of individuality Millennial shoppers respect; and are a heavy packaging format, which contributes to their carbon footprint. Yet as a walk down the soup aisle reveals, cans still dominate the marketplace. However, soup makers have been working hard to turn this around with innovations not only in processing and packaging, but in flavors, formulation and branding. Thanks to these strategic shifts, coupled with healthier consumer choices that favor these new formulations, Euromonitor predicts the soup category will grow by 6 percent by 2017.

So what have successful soup manufacturers done to stop the soup slide?

Adapted Flavors and Formulation

As with any food product, taste is king and fresh flavors and nutrient-rich soups are helping to fuel soup’s comeback. That’s one reason ready-to-serve and liquid broth soups have been growing over the past four years, according to ACNielsen ScanTrack reports, while condensed soup, a holiday casserole staple, has continued its decline. Regional and ethnic flavors, including Asian formulations like pho and Hispanic offerings such as posole and menudo are increasingly popular both with taste-adventurous Millennials and with non-white consumers, whose numbers will continue to climb. Seinfeld-inspired SoupMan just released four Louisiana-influenced flavors, including Jambalaya and Chicken Gumbo.

In the broth category, which grew by 5.2 percent last year according to ScanTrack, the fastest growing flavor category -- posting 21.8 percent growth -- was “all other,” which includes seafood, mushroom and other vegetable stocks that have risen up to challenge stalwarts beef and chicken. This reflects the fact that organic, vegetarian and healthier, all-natural formulations are also on-trend, and helping shoppers push past old notions of packaged soup as a food high in preservatives and sodium and low on freshness and nutrition.

Selected Modern and Sustainable Packaging and Design

Helping to drive a shift in attitudes at the shelf is a revolution underway in soup packaging. Dramatic changes have already taken place in one sub-category: the broth aisle. Formerly a solid wall of cans, it now features a solid billboard of cartons in single-serve and larger recloseable sizes. The package has now claimed 51 percent of U.S. broth unit market share.

In soups overall, 89 percent are still in cans, but that’s changing quickly: cans lost 7 percent of the market in just the past four years. Cartons, which have 7 percent of the market and are the fastest-growing format in the category, as well as plastic tubs and pouches are all gaining at cans’ expense. Campbell’s shocked the soup world in 2012 setting aside its iconic can in favor of more graphically exciting “Go Soup” pouches aimed at Millennials. Largely because of Campbell’s, pouches now have about 3 percent of all soup sales. Many branded and store-brand competitors have chosen paper-based cartons. For example, Progresso rolled out its new line of Artisan soups in Tetra Recart packaging, stressing the package’s environmental traits and noting its superior preservation properties for flavor.

Marketed to Millennials

One of the main reasons cartons are the fastest-growing packaging format in the soup aisle is that Millennials, arguably the most important shoppers in the marketplace today, are strongly attracted to their modern look and "green halo." According to Brand Amplitude, nearly two-thirds of Millennials surveyed preferred the idea of soup from a carton, citing the package’s sustainability and the ability to reclose and refrigerate leftover carton soup for future meals.

Dovetailing with packaging, innovative design is exceedingly important to pulling in shoppers in their 20s and 30s. Unlike their brand-loyal parents, Millennials are restless adventure-seekers in the marketplace and frequently product-hop based on shelf appeal and novelty of flavors. Arresting, eye-popping graphics are a must for this easily bored, easily lured shopping demographic. 

The soup category’s reinvention has far broader implications for food and beverage industry players by proving that by thinking out of the box, figuratively rather than literally in this case, it is possible to change the fortunes of an entire product category. Similarly, processed tomatoes have already to begun to re-invent themselves, and ready-to-eat meals, beans and vegetables are undoubtedly next. As manufacturers continue to respond to consumer wants and needs, expect to see more exciting packaging innovations continue to transform the center-store shelves.