Focus on soups and sauces: Soup it up

Related tags Soup Tomato

Although lucrative, the soups and sauces sector is  still ruled by tradition. So how are manufacturers attempting to modernise this sedate category? Anne Bruce finds out

Heinz's slogan 'It has to be Heinz Soup' is a pretty accurate précis of the soup market in the UK.

The top five best sellers, according to Kantar Worldpanel, are Heinz Tomato, followed by Heinz Chicken, Heinz Vegetable, Heinz Oxtail and, in fifth place, Heinz Lentil (to August 8 2010).

That list is remarkable on many fronts, not least that it would not look out of place if published in the 1950s.

Soup is a sedate sector. Manufacturers across the board report that the traditional flavours are the best-sellers. Meanwhile, recent Mintel findings show that soup tends to be consumed heavily among the elderly.

So is soup just a time-warp of a category, stuck in the Heinz glory days when a tin can was the last word in convenience? Surely, with an ageing customer base, manufacturers need to challenge the status quo?

The key point to note is that the soup category may be slightly boring but 'it ain't broke'. Soup sales are, in fact, booming, particularly following a cold snap last year, which contributed to buoyant sales in all sub-sectors. Total soup sales were up by 8.1% in value to £531.7M in the 52 weeks to 31 October 2010 and, within that, wet ambient soup sales were up by 7.8% to £349.9M, chilled soup sales were up by 12.7% to £97.1M and instant soup also saw sales up by 4.9% to £84.6M, says Kantar Worldpanel. Volume sales for the same period show total volume is up by 4.9% to 731.6M units. Wet ambient still takes the biggest share with 542.6M units sold, up by 4.8%. There was a 12.8% rise in the volumes of chilled soup sold (69.6M). Instant soups also saw volumes up by 1.4% to 119M units.

New demographics

In the ambient sub-sector, which accounts for the bulk of sales, manufacturers admit that their focus is on attracting new demographics to their brand.

Heinz recently launched a reduced salt classics range, sold alongside its standard range, in a bid to do that. This has 25% less salt than the standard recipe Heinz says it has met Food Standards Agency salt targets for 2010 on its whole range. Jennie Chubb, Heinz soup brand manager, explains that the plan is to bring new health-conscious consumers to the soups category, including infrequent soup consumers, boosting incremental sales for retailers: "Our research identified that 42% of consumers would prefer to buy a reduced salt product if it was available."

Other recent innovations include convenience formats and portion sizes, such as the Heinz Taste of Home range of single serve microwaveable pots.

But Heinz's 100-year heritage remains at the heart of its marketing. For example, a limited edition of its best-selling Cream of Tomato soup was brought out for its 100th birthday in September, in packaging first used in 1910.

The strategy is playing well, Heinz says it has 67.3% share of the wet ambient soups market, up by 10.5% year-on-year, volume is also up by 10.4% at 65.2% (Nielsen to July 10 2010).

Meanwhile, Premier Foods-owned Batchelors condensed soup has recently been repositioned to attract younger customers with on-pack messages flagging up that it 'makes double' and can be used either as a soup or a sauce.

While ambient soup commands the major market share, and is still growing, chilled soups are gaining traction and a turf war is developing. Chilled soups' volume and value growth was double that of the previous year in 2010, according to figures from Kantar Worldpanel. But heavy promotional activity is indicated as value sales figure is level pegging with volume growth.

Greencore, the largest own-label fresh soups supplier (on volume, Kantar electronic point of sale statistics), says growth in chilled is fuelled by that holy grail of new customers coming into the category.

But around 55% of soup is sold on promotion on chilled, Greencore reports, such as 'buy-one, get-one-free' deals or £1 price points (Kantar figures).

Marketing manager Jane Bicknell explains that Greencore research shows that the main drawback of fresh soups had been pack size. Most chilled soups are sold in 600g packs, which some see as too large. Most soup is eaten at lunchtime, and smaller portions were seen as more relevant. Greencore therefore recently launched 300g microwaveable pots through Asda and the Co-op Group.

Chilled soups' other main use is as a starter, and, for this purpose, consumers demand a premium product, according to Bicknell. Recent launches include Asda Extra Special Petit Pois & Maple Cured Bacon (pea and bacon to the cynic) and Co-op Truly Irresistible Chickpea & Chorizo.

However, even in the chilled category, best sellers are traditional flavours such as tomato and basil, leek and potato and the slightly exotic carrot and coriander, she concedes.

British and exotic NPD

New product development is focused on two avenues: traditional 'British' varieties, such as beef broth, or 'exotic' flavours based on recipes from popular holiday destinations such as Asia, Morocco and Thailand.

Nick Munby, senior brand manager for branded chilled manufacturer New Covent Garden (NCG) Soup, which pioneered the fresh soup market in the 1980s, says NCG is constantly coming up with ideas to attract new customers.

It launched 99 calorie per portion chilled soups last January, as the diet season kicked in. There is increasing call for single serve portions, Munby says, so came its "hearty and filling" Big & Bold range in September in single-serve pots. These can be eaten from the container. Mainstream flavours such as Plum Tomato & Basil and Minestrone are still the best sellers though. Winter Vegetable is the top seller at this time of year. Looking at emerging trends, suppliers report that there is a growing niche for healthy and additive-free options, and more experimental ingredients.

EHL Ingredients sales director Tasneem Backhouse noted rising demand for Smoked Paprika, Diced Dried Fruit and Arab blends like Ras el Hanout. She says: "Many soup recipes from countries such as Morocco, Spain and Thailand contain ingredients such as dried fruits, lemongrass, shrimp paste and manufacturers are now offering products such as these."

Brecon-based ingredients specialist Beacon Foods believes the key gap in the market is for quality vegetarian soups with low fat and low salt content and free from additives. Meanwhile, Yorkshire Provender uses fresh, seasonal, local produce for all its 'homemade' style soups. Apart from peas, if it can't source fresh herbs or vegetables then it won't use frozen or processed, it says.

Devon-based catering supplier Tideford Organics md Lynette Sinclair says she also sees demand for "healthy nutritious food that does not harm the environment".

Back to basics

And Mintel's report Soup UK, May 2010 concluded that consumers are indeed going back to basics. Some 38% of consumers make their own soup from scratch, and a further 11% customise ready prepared soup. "What better way to engage consumers in soup making than to offer them soup packs that contain all the fresh ingredients, herb and spice blends needed to prepare a soup from scratch." it argues. It would appear that, if a zeitgeist can be identified in the very mature soups market it might be to go back, even further than Heinz's 100-year heritage, to the days of homemade products.

But for now, the nation still likes what it knows in the soups category, and it comes in a tin marked Heinz. Preferably Tomato.

Convenience is king for new sauces

From Loyd Grossman to Heinz, new product development on sauces has one key thing in common: convenience remains king.

Giles Jepson, sauces and soup marketing manager at Heinz says pack formats such as handy packs of mayo are among recent launches. Jepson says: "We understand that people's needs are changing, customers are looking for different formats for their favourite sauces, new and exciting flavours and healthier varieties."

In the pour over sauces market, the Premier Foods-owned Grossman sauces brand is making a name for itself with a range of classic gourmet recipes. It recently launched the For One product, which is described as a 'convenient pouch' and a 'store cupboard staple' aimed at busy people dining alone.

While consumers enjoy the convenience, retailers enjoy the improved margins on offer. A 150g portion of Grossman's new For One sauces range costs £1.29, a full-sized 350g jar only £1.69, for example.

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