Campbell Sales Strong From Soup to Fish
Campbell President/CEO Douglas Conant said ready-to-serve soup sales were up 15 percent "with three quarters of the soup season ahead of us." The company said first-quarter 2007 earnings rose, but profit declined due to the ending of a one-time tax break.
Campbell introduced pop-top lids on ready-to-serve soups and specially designed supermarket displays to win back consumers from Progresso, which has a 32 percent market share in ready-to-serve soups. Campbell has a 52 percent share, according to IRI.
Chanda Rowan, a spokesperson for the research firm Mintel, said Campbell "put a fresh spin on the soup industry with its Select line, which is in line with flavor trends. People want premium offerings, and soup companies are trying to replicate restaurant quality--and succeeding."
Mintel found that the average number of hours worked by Americans has increased by two hours a year from 1992 to 2006. "This pressure on time affects all meal preparation, but is particularly acute at lunchtime," it said, "when [people] are mostly likely to eat soup. With the introduction of sippable soup and single servings in microwaveable bowls, soup is easier to handle." The company also learned that women are more likely than men to eat soup at lunch and to buy soup at the grocery store to take to work.
Company representatives said they had lowered advertising spending and still saw growth, which they attributed to meeting consumer needs. "Soup is an ideally positioned category," said Conant. Consumers are concerned with health and wellness, he said, and Campbell introduced Healthy Request and lower-sodium soups. "As for the convenience factor, we cracked the code with our microwaveable products."
Among empty-nesters, who make up almost half of all U.S. households, soup is seen as being healthier than many prepared meal options. "Smaller households also boost demand for smaller packages of soup, since consumers are cooking for one or two people, and single-serve portions are ideal," Mintel reported. Average household size in the U.S. has fallen between 1998 and 2005, and this decline is projected to continue until 2008.
The U.S. arm of Campbell Soup was strong everywhere, from soups to baked goods to beverages. Sales were up 7 percent overall, to $2.15 billion from $2 billion posted a year ago. Sales of condensed soups rose 7 percent and the company's Pepperidge Farm products were up 6 percent. The company credited its V8 V-Fusion juices for aiding beverage sales.
In August, Campbell introduced low-sodium versions of three of its top-selling soups, four new varieties of its Healthy Request and reformulated versions of condensed soup varieties having "kid-appeal." While the company said it was "pleased with" sales so far, "it is too early in the game to declare victory."
As a whole, the company is enjoying 3 to 4 percent growth in long-term sales and "soup is well positioned to grow that way for years to come," a Campbell representative said. Sales of cookies and crackers were also up 6 percent, in part because of the popularity of new 100-calorie packs of Pepperidge Farm Goldfish crackers.