Table of Contents

EXECUTIVE SUMMARY 2

THE U.S. MARKET FOR SOUP 16

THE MARKET FOR SOUP IN EUROPE AND JAPAN 141

COMPANY PROFILES 176

ADDRESSES OF SELECTED MARKETERS 185

<TI> International Soup Market 1996<IN> Food and Beverage<SO> Packaged Facts<CN> United States<DT> October 1996<NO> LA-43300

LA-43301 EXECUTIVE SUMMARY

Executive Summary (1/8)

The U.S. Market The Products

Innovation Leads to Growth, Despite Age and Maturity ofMarket

Although the soup market is a mature one, with brandsand varieties that even the oldest consumers can rememberfrom their childhood days, it continues to grow and tointroduce new varieties. The innovations expanding themarket include changes in formulations, easier means ofpreparation, and the creation of recipes that increase use.

Easy Preparation Leads the Modern Market

Homemade soups can sometimes take days to prepare, butthe commercial soup market depends on easy preparation.Most forms, dehydrated and condensed, require the additionof water, but ready-to-serve soups have become important aswell. Every great innovation in the market in recent yearshas emphasized ease of preparation; ready-to-serve cannedsoup has taken a hefty market share from condensed soups,and Japanese instants, called ramens, have gained share fromEuropean-style mixes. Ramens are a traditional, Japanese noodle broth, nowsold in modern, quick-prepare format. Their growth in anAmerican market that until recently had never heard of theproduct, suggests that there are probably other cultureswith traditional soup styles that could find niches withinthe commercial market.

Three Categories Organize Market

The soup market breaks into three categories: cannedsoups, dehydrated soups, and broths and bouillons. A fourthcategory, of frozen or refrigerated soups, is much smallerand is not much discussed in this report. Canned soups arethe oldest form of commercial soup and they still comprisethe largest category. This category is divided intocondensed soups, that require water and ready-to-serve soupsthat are simply poured from a can and heated. This is themost mature of the soup categories; however, it is able tomaintain growth by regular increases in the price of a can,and by encouraging consumers to switch toward higher-quality

products. Dehydrated, or dry, soups are sold as mixes and ramens.Growth in this category is complex due to strong anti-inflationary trends. Consumers are moving from the mixes tothe lower-priced ramens. Even with this trend, however, thecategory is able to maintain annual growth in the 3% range. Broths and bouillons comprise the fastest-growingcategory. These products are sold as cans of broth forquick heating or cubes of bouillon concentrate that are tobe dropped into hot water and dissolved.

The Market

Soup Market's 1996 Retail Value Estimated at $4 Billion

The American soup market is estimated to have produced$4.0 billion in retail sales for 1996. The canned soupmarket accounted for most of that, drawing $2.9 billion insales. Dehydrated soups reached $700 million in retailsales, while broth and bouillon added another $419 million.All categories experienced moderate to good growth, raisingthe entire market by over 5% beyond 1995 sales. See Table 1-1.

Market to Reach Almost $5 Billion by 2001

Packaged Facts estimates that the soup market's retailvalue will grow to $5.0 billion by the year 2001. Cannedsoups are projected to grow 4.7% annually, reaching $3.6billion in retail sales by 2001. Dehydrated soups will growat a slightly slower pace of 3.8%, and reach $844 million insales. The fastest-growing segment, broth and bouillon, isprojected to increase by about 5.1% annually, bringing itssales in 2001 to $537 million.

Executive Summary (2/8)

Cannibalization Impedes Market Growth

The soup market's maturity means that much competitionresults in cannibalization rather than growth. Theintroduction of ready-to-serve canned soups, for example,tended more to draw customers away from condensed soups thanit tended to draw new consumers into the soup market. Asimilar picture resulted from the introduction of low-pricedramen soups from Japan. Although they did create some newsoup customers, they also drew customers that had previouslybought the older instant soup mixes. Cannibalization is rarely neutral in its effects onoverall market value. Among canned soups, the switches tendto be from lower-priced condensed forms of soup to moreexpensive "healthy" or ready-to-serve soups. There has alsobeen some movement toward higher-end, quality soups. Thesechanges help the market value grow, although they do littleor nothing to increase market volume.

Cannibalization in the dry soup market seems to work inthe opposite direction. The movement away from mixes towardramens was a switch from higher- to lower-priced items.Thus, the dry soup market's retail-value growth has beenrelatively slow, although the volume growth has been good. Two trends that help move the market beyondcannibalization are changes in life-style and in uses forsoup. When examined closely, both of these trends reflectone larger trend: the wish to get through food preparationtime more quickly. When people are ambitious and want tocook a meal, they do not want to spend as much time aspeople used to devote to the kitchen. Soup, in bothdehydrated and canned forms, has proven a handy solution,providing seasonings and other ready-made ingredients thatallow a person to move more quickly and yet still cooksomething special. When people are not ambitious and simplywant to move as quickly as possible to the eating stage of ameal, heat-and-serve soups fit the bill. They are preparedquickly, and yet still provide nutrition and flavor. Both of these attitudes have helped the soup marketfind new consumers and provide new occasions whenestablished consumers use soup. Many soups are now sold andadvertised with recipes that promote their use as aningredient in other foods. Quick-heating soups are alsopromoted regularly and enthusiastically throughout themarket.

The Canned Soup Category Leads the Market

When the market is measured in terms of retail dollars,canned soups dominate it, accounting for almost three-quarters of the market's sales. When the market is measuredin terms of pounds of product sold, canned soups are evenmore important. Among canned soups, the largest-sellingstyle is still the condensed soup that requires the additionof water. It accounts for over half of canned soup sales,despite the fact that other forms of soup carry higherprices and would not have to sell as many units to achievecondensed soup's retail sales value. The best-sellingvariety of canned soup continues to be chicken soup.

Mixes Still Supply over Half of Dehydrated Soup Sales

Soup mixes account for about 56% of dehydrated soupretail dollars. In recent years mixes have held their ownagainst the pressures from ramens and appear even to havegained a bit of market share. This stabilization and nowgrowth in market share suggests that the effort to establishsoup mixes as a form of seasoning has become strong enoughto increase consumer interest in this product.

Broths and Bouillons are Fastest-Growing Category

Although broths and bouillons comprise the smallest

category covered in this report, they have grown morequickly than other soup forms. Average annual growthbetween 1992 and 2001 is projected to be about 5.3%. Mostof these sales will have come from the growth of interest incanned broth. Some marketing has promoted canned broth as ahealthy, alternative spread to butter. Data reported in theconsumer chapter of this report suggest two other reasonsfor this increased interest. Some consumers see broth as aninexpensive alternative to soups. Because soup is already alow-priced food, this reason appeals to only the lowest-income consumers, but for them it is a strong appeal. High-income consumers are also interested in broth. For them itserves as a way of providing variety to the menu. Consumers who arealready strong soup consumers are using broth to keep asoup-like course in the meal, but change it somewhat.

Executive Summary (3/8)

The Marketers

Soup Marketers Fall into Three Classes

One could joke that in the soup market there is TheCampbell Soup Company and everybody else. That is not quiteright, however, because the everybody elses fall into twotypes. Altogether there are three classes of soup marketer:Campbell Soup; the large, multinational food companies; andhundreds of smaller niche sellers.

Campbell Soup in a Class By Itself

The Campbell Soup Company stands alone. By itself itaccounts for 60% of the market's sales. It is the leadingcanned soup marketer, with over three-quarters of all cannedsoup sales. It also leads among broth, bouillon, and soupstarter marketers, with 39% of that category's sales. Itranks fifth among dry soup marketers, with 7% of sales ofall dehydrated soups.

Multinational Food Giants

The other leading soup marketers are large,multinational food companies. Among American giants,Borden, CPC International, ConAgra, and RJR Nabisco allmaintain strong presences in the soup market. SeveralBritish companies are also visible. Unilever's Thomas J.Lipton division leads in the dehydrated soup market, whileGrand Metropolitan owns the Progresso brand of canned soups.Two Japanese giants are also active participants inAmerica's soup markets. Nissin Foods and Toyo Suisan Kaishaare both strong marketers among dehydrated soups.

Niche Marketers

The top ten marketers all belong to the first two

marketer classes; however, some of the hundreds of nichemarketers have carved good-sized spots for themselves in oneof the category markets. Health Valley Nature Foods, forexample, has established its line of canned soups, gainingalmost 1% of that market. Most of the niche marketers areregionally distributed, appealing to local tastes andtraditions.

Campbell Remains King of Canned Soup Market

The Campbell Soup Company makes four of the top fivebrands, including the three best-selling brands, in thecanned soup market. Other leading marketers are GrandMetropolitan's Pillsbury division, which offers Progressosoup, and ConAgra with its Healthy Choice line of soups.

Three International Marketers Dominate Dehydrated Soups

The dehydrated soup category does not have a singlegiant. Rather three marketers Lipton, Nissin, and ToyoSuisan Kaisha each enjoy double-digit market dollars.Lipton leads the three with a quarter of the market share,and its Recipe Secrets brand of instant soup mix is thecategory's best-selling brand. The other two marketers sellramens and, combined, their market share is about a third ofall dry soups. Each of these three companies isheadquartered abroad; Lipton is part of the Anglo-Dutch firmUnilever, while the other two are marketed through Americanbranches of Japanese operations.

Three American Giants Lead Broths and Bouillons

Campbell Soup, Borden, and RJR Nabisco are the leadingmarketers in the broth/bouillon/soup starter category.Campbell's leadership comes through its Swanson brand, whileRJR Nabisco's College Inn brand of broth is also popular.Borden is strong with bouillons. Its Wyler's line is theleading bouillon brand.

Competition Stresses Quality

Although price is important, quality is the focal pointof current soup competition. Among canned soups, qualitytends to mean health lower salts and higher-qualityingredients. Health-oriented brands and labels are becomingincreasingly strong. Over the 1995-1996 winter seasonCampbell increased the amount of meat in its chicken soups,while Progresso announced that it now uses only white meatin its chicken soup. For dry soups, quality brings improved flavors and lowsalt. This competitive trend is particularly visible amongfast-growing American brands like Fantastic Foods and QuakerOats's Nile Spice line. After buying Nile Spice, Quaker

Oats increased the flavor varieties and lowered the price.The reward for this aggressive competitive approach was a13% growth rate in 1995.

Print Media Favored for Advertising

Although the largest marketers use both spot andnetwork television advertising, print media garner thelargest portion of the soup market's advertising dollar.Print is especially valuable for advertising that stressesnew ways to use soup. Print ads can provide recipes,display health information, and carry coupon promotions.

Executive Summary (4/8)

Distribution and Retail

Campbell Restructures Its Distribution System

For many decades the distribution of soup has followedthe standard system for distributing nonperishable foods.Product goes from manufacturer to warehouses to stores, butCampbell has introduced a new system that goes straight tothe stores. Known as "just in time" distribution,Campbell's soups are dispatched to individual stores as theyare needed. The system has been made possible because ofthe computerized tracking of inventories at both themarketer and retailer levels.

Supermarkets Are the Chief Retailers

Three-quarters of retail soup sales come fromsupermarkets. The nature of the product makes it difficultfor rival retailers to increase their share. Discount clubshave difficulty with soup because consumers usually buy amix of flavor varieties, whereas clubs are organized to sellindividual varieties in bulk. Although many consumers useenough soup to like the idea of purchasing discounted casesof soups, they seldom want to buy just a case of tomato orcream of mushroom. Drugstores too have found that, exceptfor a small number of instant soup sales, most consumers donot buy soups from them.

Soup Displays Are Growing

The size of the soup display has been growing insupermarkets. The variety of available soups has increasedat an even faster pace, generating much competition for theavailable shelf space. Soup space has also grown as theproduct has gone beyond the traditional use. Soups now canbe found in sections devoted to gravies, seasonings, andethnic vegetables.

The Consumer

Affluence Promotes Variety in Market

Soup is consumed by people of all ages, incomes, andeducational groups; however, there is no mistaking theimportance of affluence and education in broadening themarket's scope. An increase in family incomes leads to thepurchase of more expensive brands, of more categories ofsoup, and more varieties of soup. Affluent consumers aremore likely to buy the slightly higher-priced brands such asHealthy Choice among canned soups, Knorr dried soups, andHerb-Ox bouillon. By contrast, lower-income consumers aremore likely to limit their purchases to broths, tomainstream brands, and to condensed soups. A complicating factor in this portrait is theimportance of families. Large families are stronger soupconsumers than small households. Single-person dwellingsare particularly uninspired soup consumers.

Campbell Benefits from Heavy Users of Canned Soups

Although heavy users of canned soup (consumers who usefour or more cans per week) amount to just under 30% of theshoppers, they account for 58% of the soup consumed. Thus,heavy users have a particularly powerful impact on themarket, and heavy users are strong supporters of Campbell'sproducts. The most traditional of soup products, Campbell'scondensed soups, are especially strong with heavy users andindicate the hefty competitive advantage that Campbellbrings to the market. New brands and marketers may findtheir niches, but to move into the mainstream they mustsomehow attract the notice of these conservative heavyusers.

Nissin Strongest Marketer with Heavy Dry Soup Users

Heavy users are even more important to the dehydratedsoup market, with 27% of the shoppers accounting for 61% ofsoup sales. (Heavy soup here is defined as users of threeor more packages per week.) Nissin products, sold under avariety of brands, are the ones preferred by these heavyusers. In general, Nissin consumers tend to be young andwithout a college diploma, exactly the kind of person whomight make a low-cost lunch during the workday.

Ethnic Minorities Indicate Room for Market Growth

Despite its maturity, the soup market still has room togrow among ethnic minorities. African-Americans and otherracial minorities have increased their soup consumption inrecent years, indicating a source of real growth in themarket. Adding to the importance of these populationsegments is their tendency to produce heavy consumers.

African-Americans, for example, are underrepresented amongall soup users, but overrepresented among heavy users. Thatstatistic indicates that when African-Americans do becomesoup users, they start using it in a big way. Minorityconsumers offer a means for the market to grow, if marketerscan find a way to appeal to them.

Executive Summary: Scope and Methodology (5/8)

Scope and Methodology

The major portion of this report reflects analysis ofsecondary source data. Although any publication with newsof the soup market was liable to be consulted, trade newspublications about food processing and food retailing werethe most useful sources for information about market forces,marketing strategy, and retailer operations. Productinformation sources included books about food history. Information Resources Inc. was the most importantsource of sales and share information. Annual sales trends,market share data, and brand activity data are based heavilyon analysis of IRI's InfoScan survey of supermarket sales.Likewise, data from Simmons Market Research Bureau werecrucial in developing a portrait of consumer activity. Inboth cases, however, spreadsheet analysis of the data wasimportant. Electronic spreadsheets made it possible totease out conclusions not immediately evident in thepublished data. A small number of primary sources were also consulted.On-site inspections of soup displays and promotions in thegreater New York area were conducted to gain a firsthandunderstanding of soup retailing. Some store managers werealso interviewed to learn how they buy, track, and viewtheir soups. Some marketers, through their public relationsoffices, were also approached, but apart from someadvertising and promotional examples, these sources provedto be of only minor importance. This report describes the retail sale of packaged soupproducts through supermarkets and other retail outlets. Itdoes not cover soup preparations sold in restaurants orinstitutions. Soup itself is a liquid food enriched with a base ofmeat, fish, or vegetable stock. Often it contains pieces ofsolid food. It may be sold in concentrated or dried formsthat require consumers to add water as part of thepreparation for eating.

Executive Summary (6/8)

The European and Japanese Markets

Product Categories

Statistical data for the European market for soups canbe divided into three categories: canned soups andbouillon, packet (or dehydrated) soups, and chilled and UHT

(ultra-heat treated) soups. The latter are not only frozenbut, due to the special heat treatment, are additionallyprotected from bacterial action. For Japan, sales data are provided for the packet soup,canned soup, and all other soups categories.

Product Trends

The popularity of eating soup in Europe has grownrapidly due to its availability, the convenience it offers,as well as for reasons of economy. Soup is a versatilefood. It can be served hot, tepid, or cold. It is seen asan appetizer, a snack, as well as a wholesome meal, andexists in a wide variety of different cuisines. Demand for soups combining nutritional value and quickpreparation along with affordable prices is strong. Thelatter factor has become especially pronounced in the wakeof the recession in most parts of Europe. Even in Japan,where consumers were less demanding and more free-spendingthan their U.S. or European counterparts, the collapse ofthe so-called `bubble economy' has meant a more consciousconsumer, who seeks quality products at affordable prices. Unlike many other areas of the foods market, some soupsare inherently international in nature. A cream of tomatosoup or chicken bouillon cube, for example, is madeessentially the same way whether in the United Kingdom,Italy, or Germany, or in Japan. Baseline productspecifications for soup, therefore, do not pose as manyentry barriers as do some other food market categories. Inaddition, the elimination of trade barriers in Europe aftercompletion of the Single Market has enabled companies toconsolidate soup production for the European market in a fewcountries and thereby achieve substantial operationaleconomies. Nevertheless, companies have to take considerable carein adapting soup brands to local preferences this includestexture, appearance, and flavors as well as wider issues ofbusiness culture.

Soup Sales Cross $3.7 Billion in Europe

Sales of soups in Europe are estimated at some $3.7billion in 1996, an increase of 2.5% over the previous yearand 12.5% when compared to a figure of $3.3 billion in 1991. In Japan, sales of soups in 1996 were valued at morethan $590 million, an increase of slightly more than 1% overthe previous year and about 6% above the figure of $556million in 1991. The five-year 1991-1996 CAGR was only1.2%.

Sluggish Growth Expected into Next Century

Sales of soups on the European market are projected toexceed $4.1 billion in the year 2001, corresponding to a

five-year CAGR (1996-2001) of 2.1%. The growth rate isslightly slower than that achieved in the 1991-1996 period,and indicates the maturing of the market, as well as thecontinued persistence of price competition from the fast-growing private-label sector. The Japanese market is projected to also grow at arelatively sluggish pace, with sales reaching $652 millionin the year 2001, corresponding to a five-year CAGR of 2.0%.This rate of growth is, however, somewhat higher than in theprevious, 1991-1996 period. See Table 1-2.

Germany Is Largest European Market

By country, Germany was the largest European market forsoups in 1995 with a share of 18.4% of all sales. Italy wasin second place, accounting for 16.9% of sales, followed bythe United Kingdom with 14.9%, and France with a share of10.1%. These large countries (the `Big Four') togetheraccounted for just over six of every ten dollars spent onsoup in Europe in 1995.

Market Composition by Product Type

In unit terms, the largest category on the Europeanmarket in 1995 consisted of canned soups and bouillon,credited with about 85% of total soup sales. Followingconsiderably behind, with a 13% share of units shipped, werepacket soups. The remaining category, consisting of chilledand UHT soups, was in third place, with a share of about 2%. For Japan, the largest share of the market in 1995 wasmade up of packet soup, with a share of 75% of sales.Canned soups accounted for a share of about 4%. Othercategories, including UHT/chilled soups, constituted theremainder of the market.

Executive Summary (7/8)

International Companies Are Market Leaders

The leading companies in the European soup market arepart of wider foods-sector companies (e.g. Nestle, Heinz,Campbell Soup Company) and even larger consumer goods giantssuch as Unilever. Large companies like Nestle and Unileverhave a presence in all European markets. Heinz too operatesin all markets, though Heinz soups are not found on somemarkets. The only international company with any significantpresence on the Japanese market is Campbell Soup Company,though Nestle's Maggi brand is strong in the bouillonsegment. Like most other food sectors, the Japanese soupmarket has been tough to enter for Western foods companies.Though Campbell Soup has had a subsidiary in Japan forseveral years, it too has faced massive difficulties in thismarketplace, largely due to the closed nature of Japan's

distribution system.

Many Small Companies Active in Local Markets

There also are many small soup companies in Europe thatare active mainly on a local market basis. Due to theirinability to provide adequate advertising and promotionalsupport, most of the smaller companies are active inselected niches only (e.g. vegetarian, ethnic, seafood). In Japan, there are also a number of domestic players(e.g. Ajinomoto, Meiji Seika, Nissin Foods and Ima FoodsIndustries, which specializes in mail order).

Local Tastes Remain Important Factor

Within Europe, product development, marketing, anddistribution strategies face language barriers as well asdifferences in the approach to business and consumermarketing. Even after the Single Market, these are likelyto persist. For example, in its promotional deal withDisney, Nestle illustrated selected Disney characters forpromotion in different countries on the basis of localpreferences Britain's favorite, for instance, is MickeyMouse, while in France and Germany it is Donald Duck. In short, in spite of the growing internationalizationof the soup market, companies will have to continue toremain sensitive to local tastes if they are to succeed.

The Important Role of Research and Development

In a mature and increasingly competitive consumerproducts market like soups, companies have long acceptedthat the key to success lies in the ability to introduce newproducts that will favorably influence consumer behavior.Also, it is inevitable that success by a new productinspires competition, and only those who continuously launchnew products will win.

Health Concerns

Consumer consciousness in Europe and Japan about thehealth risks of fat-rich foods is growing, though it isstill less pronounced than in the United States. Forseveral years, companies have expanded their lines toinclude low-fat and fat-free soups. The aim is to providenutrition-conscious consumers low-fat alternatives totraditional cream soups.

Consumer Price Consciousness

European soup consumers continue to show increasingprice sensitivity. However, there have been two parallel

trends. As the recession hit in the early 1990s, soups (andother canned foods) were the first target for those buyingcheaper, a process aided and abetted by in-house brands fromthe large retailers. On the other hand, consumers(especially young white-collar workers) are also willing topay more for the quality edge offered by premium products.Finding the correct price point (where the consumer sees itstill carrying value), has been no small challenge for themajor soup companies, especially with newly launched premiumproducts.

Consolidating Manufacturing

Most soup companies have streamlined or consolidatedtheir activities, accompanied by restructuring, which hasseen drops in their work forces. During the recession, whenprofitability was squeezed, the overriding goal was tomaintain or minimize drops in market share, especially toprivate-label competitors who took the economic downturn asan opportunity to enter or consolidate their hold on themarket. In Europe, the approach of the European Single Marketsaw several food companies seeking to run their plants on apan-European (or global) scale, with all its attendanteconomies. Procurement was consolidated across Europe, withraw materials (vegetables, tin, glass, paper) and othersupplies sourced from the lowest-cost suppliers, often on anannual basis. In Japan, domestic soup companies (in keeping with thegeneral trend in the food-processing industry) have begunshifting production overseas, especially to Southeast Asia.The main reason is the massive strengthening of the yen inthe last three years.

Executive Summary (8/8)

Mergers and Acquisitions, Disposals

In recent years, one of the main routes to growth forsoup companies has been through overseas acquisitions ofstrong (often complementary) brands and companies.Companies have generally focused on acquiring well-established players in local food and foodservice markets tocomplement their own network, or to give them a springboardfor market entry. CPC International's objective, forexample, is to attain market synergies. After acquiring alocal company, it uses the latter's distribution system tointroduce CPC's own products, while also selling the newlyacquired brand in its markets elsewhere. After the fall of the Berlin Wall, food companies madea spate of acquisitions in Eastern Europe largely tocapitalize on opportunities as this region caught up withliving standards in the West. In the future, international soup companies' majortargets are almost certain to include Southeast Asia as wellas the giant Chinese and Indian markets. Demand for

convenience foods in these areas will increase massively aslife-styles change with industrialization, the growingstrength of their consumer markets, and an increasingacceptance of Western foods. Another factor in favor offocusing on Asia is that soups (albeit home-cookedvarieties) are already a part of most diets. In spite of the seemingly furious pace of recentacquisitions, some soup companies have also chosen toreverse their focus to a handful of high-potential brands,market segments, and/or country markets. Campbell SoupCompany, for instance, is to narrow its future focus tomarket leaders and dispose of lower-performing products,possibly including several soups.

Manufacturers See Private-Label Opportunities

Sales of private-label canned soups have been risingrapidly in Europe. Seeing this, some large manufacturershave entered private-label production. In August 1995,Heinz shocked the British food industry by admitting it wassupplying private-label spaghetti and baked beans tosupermarkets. Heinz has, of course, long been active in theprivate-label segment in the U.S. as well as in continentalEurope, and its move to this segment in the United Kingdomwas to be expected. Critics, however, maintain that it wasa clear case of a company succumbing to competition. Nestletoo supplies private-label products pasta and dressings. Though most such moves have so far been directed atother categories, in the future, soup could also beincreasingly affected. Heinz for one is reported to beconsidering private-label soup in the United Kingdom too.

Supermarkets and Groceries Are Major Outlets

The major outlets for soups are supermarkets andgrocery stores. In Japan, the latter are known as"specialty" stores, and are frequented by young housewives.In general, supermarkets are favored for bulk purchases tostock soup (and other food items) for longer periods, whilegrocery stores are the preferred outlet for immediate-usepurchases.

Demand and Demographics Age Most Telling

In the industrialized countries, the number of thoseconsuming soup has long matured. Market growth has recentlybeen based less on increasing consumers or the frequency ofsoup consumption than on increasing prices (often via newproduct launches). However, with the aging of thepopulation, the soup market is expected to benefit. Those aged 55 and over consume soup more than youngadults, and in the long term, the demographic trend in bothEurope and Japan of an aging population will play animportant role in development of the soup market.

Methodology for Sales Estimates

Estimates on the current market size as well asprojections about the future market have been derived bycompiling information from the following sources:

- Personal interviews with industry executives;- News articles and reports appearing in the financial,marketing, and trade press (both published and on-line); and- Abstracts from government and industry statistics andresearch reports.

However, the figures should be considered as broadestimates due to certain factors:

1. The absence of official or industry statistics on soupconsumption in some countries, and the lack of harmonizedstatistics across Europe.2. The difficulty in demarcating definitions, especiallyin Japan between soups, noodles, and stews; and theoccasional overlap between convenience foods, at-home foods,and dining-out foods (canned soup served at restaurants).3. The impact of exchange rate shifts, both betweenEuropean currencies and vis-…-vis the U.S. dollar.

Table 1-1: Estimated Size and Growth of the U.S. Soup Market:By Category, 1992-2001 Categories: Canned, Dehydrated, andBroth/Bouillon (dollars and percent)

(In Millions of Dollars) CAGR CAGR CAGRCategory 1992 1996 1992-1996 2001 1996- 1992- 2001 2001

Canned $2,367 $2,870 4.9% $3,611 4.7% 4.8%Dehydrated 612 700 3.4 844 3.8 3.6Broth/Bouil 338 419 5.5 537 5.1 5.3lonTotal $3,317 $3,989 4.7% $4,992 4.6% 4.7%

CAGR = Compound annual growth rate.Sources: Information Resources Inc.'s InfoScan; PackagedFacts.This material used with permission.

Table 1-2: Estimated Size and Growth of the Soup Market inEurope and Japan, 1991-2001 (In U.S. Millions)

CAGR CAGR CAGRArea 1991 1996 1991- 2001 1996- 1991-2001

1996 2001

Europe $3,311 $3,726 2.4% $4,134 2.1% 2.2%Japan 556 591 1.2 652 2.0 1.6

CAGR = Compound annual growth rate.Source: Packaged Facts.

LA-43302 THE U.S. MARKET FOR SOUP

I. THE PRODUCTS

Scope of Report; The Products

Scope of the Report

Scope of the Report

This report describes the retail sale of packaged soupproducts through supermarkets and other retail outlets. Itdoes not cover soup preparations sold in restaurants orinstitutions. Soup itself is a liquid food enriched with a base ofmeat, fish, or vegetable stock. Often it contains pieces ofsolid food. It may be sold in concentrated or dried formsthat require consumers to add water as part of thepreparation for eating.

The Products

A Brief History of Soup

Soup has a long history as a basic staple of the humandiet. It may well date back almost to the beginning of firecooking during the Stone Age. Although the first use offire in preparing meals probably consisted of no more thantossing meat into flames, soup seems likely to have soonfollowed, for soup is the natural result of an attempt toextract nutrition from bones, vegetable stalks, and otherdifficult-to-use parts of animals and plants. Theuniversality of soup is visible in its widespread presencein distinct cuisines. Chinese, Slavic, and New Englandrecipes all include traditional soups. Anthropologists say that even before the rise offarming, people were preparing soup from boiled water,bones, plants, and seeds. Once agriculture developed, flourwas added to thicken the liquid, and beans and vegetableswere added. One of the oldest stories in the Bible tellshow Esau traded his birthright for a "pottage of lentils,"that is, lentil soup (Genesis 25:34). In the Middle Ages,the word soupe came into usage. By that time, soup hadbecome a much richer fare, with ingredients including meat,

fish, cabbage, beans, barley, vinegar, and wine. Spread onthick slices of bread, this predecessor of the French pot-au-feu was a main dinner course. Soup returned to its original, thinner consistency inthe 1600s. In the 1700s and 1800s, cream soups andconsommes became popular. The development of modern canningpractices in the late 1800s gave birth to today's soupindustry; soup manufacturers could cook soup in largebatches, can it, and sell it through grocery outlets. Inthe early 1900s, canned soup began to displace homemade soupin share of overall soup consumption. Today, soup is served primarily as an appetizer,especially in restaurants. However, soup makes a satisfyingmain course for many consumers, and can also be servedalongside a salad or sandwich.

Quotations About Soup

As a regular part of life for centuries, hundreds ofreferences to soup appear in literature. A few notablequotes include:

- Plato: Will he not entrust to us the prerogative ofmaking soup, and putting in anything we like? (GreaterHippias, c 360 bc)- Tobias Smollett: One wit, like a knuckle of ham insoup, gives a zest and flavor to the dish. (HumphreyClinker, 1771)- Sir Walter Scott: It's the part of a kind son to bringher a soup o' something that will keep up her auld heart.(Rob Roy, 1818)- Charles Lamb: The savoury soup and messes steaming upthe nostrils, moistening the lips of the guest with desire.(Grace Before Meat, 1821)- Lewis Carroll: Who would not give all else for twop'ennyworth only of beautiful soup? (Alice's Adventures inWonderland, 1865)- Dr. David Livingstone: We had taken a littlemulligatawny paste for making soup. (Zambesi, 1865)- Mark Twain: Tahoe means grasshoppers. It meansgrasshopper soup. (Innocents Abroad, 1869)- Charles Dickens: Stock for soup became fragrant in theair of Minor Canon Corner. (The Mystery of Edwin Drood,1870)- P.G. Wodehouse: He took me to supper at some swelljoint where they all had the soup-and-fish. (PiccadillyJim, 1918)- A.E. Housman: I was however agreeably surprised by aPalestine soup which had not the faintest trace ofartichoke. (Letters, 1929)- Irving Stone: The man scanned the menu, ordered a platdu jour, and within a moment was scooping up his soup with alarge spoon. (Lust for Life, 1934)- Ernest Hemingway: I had black bean soup and a beefstew. (To Have and Have Not, 1937)- James Joyce: as grave as oxtail soup. (Finnegans

Wake, 1939)- Chaim Potok: Lunch turned out to be a massive affair,with a thick soup, fresh rye bread, onion rolls, bagels.(The Chosen, 1967)

Classic Styles of Soup

Soup comes under many names and in many differentcooking traditions. Some of them are:

- Alamode beef: A thick, stewlike soup made from scrapsof beef.- Bisque: A rich soup made by boiling down a meatsource. Best known these days for lobster bisque.- Borscht: A Russian beet soup; can be served hot orcold.- Bouillabaisse: French version of chowder, and likechowder midway between soup and stew.- Burgoo: Southern term for a broth; over time burgooshave become thicker than the typical broth.- Calalu: West Indian term for a vegetable soup or stew.- Cale: A cabbage broth or soup.- Choke-priest: An Italian soup thickened with macaronior other pasta.- Chowder: A thick, seafood soup, almost a seafood stew.- Consomme: A strong, clear broth made by slowly boilingmeat.- Gazpacho: A cold, spicy Spanish soup.- Gumbo: Louisiana Creole dish, soup thickened withokra.- Hoosh: A thick soup.- Jacobine: A French soup with cheese in it.- JardiniŠre: A French, vegetable soup.- Joutes: Vegetable soup.- Julienne: French soup made of meat, carrots, and othervegetables.- MadrilŠne: Spanish consomme, flavored with tomato,usually served cold.- Minestrone: A thick, Italian vegetable soup containingrice or pasta.- Mortress: Thick soup made from milk and bread.- Mulligatawny: Meat soup from India, strongly flavoredwith curry.- Palestine: A cream soup made with Jerusalemartichokes.- Petit Marmite: A meat or vegetable soup served in anearthware pot.- Plum-broth: Thick broth or soup made of beef, prunes,raisins, currants, white bread, spices, wine, sugar, andother ingredients. Traditionally, a Christmas soup.- Pottage: Old word for soup, no longer used because ofits associations with the Bible.- Puree: A vegetable or fish soup, boiled and passedthrough a sieve, and added to soup-stock or almond-milk,with various flavorings.- Rubbaboo: Algonquin soup made from pemmican.

- Sancocho: Rich, Latin-American soup containing meat,plantain, yucca, etc.- Scotch broth: Soup containing meat, vegetables, andpearl barley.- Shabu-Shabu: Japanese soup containing vegetables andthinly sliced beef or pork.- Shchi: Russian cabbage soup.- Skilly: Watery soup, commonly made from oatmeal.- Skink: Beef soup.- Solyanka: Russian vegetable soup, usually includesmeat or fish.- Spring pottage: Soup made with fresh, greenvegetables.- Stracciatella: Italian soup made from stock, eggs, andcheese.- Vermicelli: Italian soup made with vermicelli pasta.- Vichyssoise: French soup made with cream, potatoes,and leeks. Usually served cold.

Soup Uses

Soup is often served as an appetizer. However, somesoups are hearty enough to serve as main courses. Condensedsoups and dehydrated soup mixes frequently serve asingredients in recipes for dip mixes, casseroles, sauces,and other dishes. Products in the bouillon/broth categoryare generally used either as stocks for homemade soups or inrecipes for other dishes.

Most Soups Are Easy To Prepare

Most soups sold at retail are fast and easy to prepare.Some canned soups can simply be dumped into the appropriateserving dish and microwaved. Others require only theaddition of water and some stirring while the soup isheated. Soup mixes and ramens generally require only a fewminutes of stove-top boiling, or simply the addition ofboiling water.

Product Categories and Segments: Canned; Dried

Product Categories and Segments

Three Major Categories Treated in This Report

This report recognizes three major categories of thesoup market. They are:

Canned Soups Canned soups contain moist ingredients and requireminimal effort for preparation. In the simplest cases, thesoup can be poured from the can and served cold. Usually,some water is added. The product is stirred and heated. Itwas the invention of the canned soup that created today's

retail soup market. The category contains three segments:

- Condensed soups have been partially dehydrated andconcentrated during the manufacturing process. The consumermust add milk or water to the product during the cookingprocess. Traditionally, consumers have used the soup can tomeasure out the water needed to reconstitute the soup.Semicondensed soups require half as much water duringpreparation.- Ready-to-serve soups, also known as single-strength orready-to-eat soups, need no extra water. They can be simplyheated and served.- Microwaveable soups are ready-to-serve soups that havebeen packaged in non-metallic containers that can be heatedinside a microwave oven. They can then be eaten directlyfrom the package.

Dry Soups Fully dehydrated soups. They are more portable thancanned soups, and can be more easily used on camping trips,picnics, and other outings where ease of storage matters.They are prepared by adding water, stirring, and bringing toa boil. Dry soup segments are:

- Soup mixes consist of a dry powder, sometimes withpasta or dehydrated vegetables, and require the addition ofwater. Two types are available: instant and regular.Instant mixes, typically sold in single-serving packets, areprepared simply by dissolving the mix into a cup or mug ofboiling water. Some instant mixes are packaged inpolystyrene or paperboard cups, and can be eaten right outof the package. Regular mixes require several cups of waterand at least 10 minutes of stove-top or microwave cooking.Because these mixes are often intended for use in recipes,they are also known as recipe mixes.- Ramens consist of tightly curled Oriental-style noodlesand a bouillon-type flavoring. The Japanese word ramenrefers to a broth with noodles. Regular ramen, packaged ina cellophane pillow pack, includes a dry cake of curlednoodles and a foil packet of bouillon-type flavoring. Toprepare regular ramen, the consumer simply drops the noodlecake into boiling water, cooks it for about two minutes,then adds the flavoring. Instant ramens are similar, butthe ingredients are premixed, and packaged in polystyrene orpaperboard cups. To prepare instant ramen, the consumeradds boiling water to the cup.- Soup starters usually contain dried pasta, grains,beans, and dehydrated vegetables, along with a packet ofbouillon-type seasoning. Unlike soup mixes, soup startersusually require the addition of either beef, poultry, orseafood. The mixture is then cooked and simmered on a stovetop for at least half an hour before serving.

Product Categories and Segments: Bouillon/Broth; Other Categories

Bouillon/Broth

Clear soups are traditionally known as broths or, inFrench, bouillon. In the U.S. market, bouillon has come tomean a broth made from a bouillon cube, a highlyconcentrated, dry powder compressed into a cube. The twonames, once synonyms, will be used in this report todistinguish between the category's two main segments:

- Regular-strength broth comes in cans and is ready toserve. The broth may be consumed as is, but more commonlyserves as a stock to which other solid ingredients areadded. Condensed broth is similar in that it is alsopackaged in cans; however, condensed broth requires theaddition of water in a ratio of 1:1. In this report, theterm broth refers to this canned segment.- Concentrated bouillon is a highly concentrated form ofbroth. Although concentrated bouillon is a relativelyrecent development in the history of broth, most consumersthink of this form when they hear the word bouillon. Bowingto popular usage, this report uses the word bouillon torefer only to the concentrated segment of the bouillon/brothcategory.

Frozen and Refrigerated Soups Receive Only LimitedDiscussion

A fourth category, that of frozen and refrigeratedsoups, receives only limited discussion in this report.They constitute only a small portion of the market, and verylittle detailed information is available about them, so theyreceive only limited mention in this report. One exceptionis in consumer information. Good data about consumers offrozen soups are available and reported here.

Newer, Marketing Classifications Are Included in TraditionalCategories

Marketers have developed a variety of newclassifications for their soups. Especially notable are"healthy" soups that are lower than traditional soups insodium, fat, cholesterol, and/or calories. Hearty soups,that move midway toward being a stew, have also beenintroduced and sold as something new. They do, however, fitinto traditional categories, usually ready-to-serve cannedsoups or instant dried soups, and this report considers themas members of those categories.

Manufacturing Soup

Manufacturing Soup

Secret Is in Removing Water

The breakthrough technology in canning soup came acentury ago with the discovery of how to remove water from

prepared soup. Besides reducing the size of a can of soup,this method allows for fuller flavor. The soup ingredientsdo not sit for an undetermined length of time in water. Bynow the water-removing technology has become so advancedthat all the water can be removed, leaving a dry, super-concentrated soup stock that can be put in a packet. A dry/wet hybrid has also been created. In thisinnovation, the garnish rice, beans, and such is madecompletely dry, while the soup stock is a wet concentrate.

Soup Stock Comes First

In modern food manufacture, soup is first made in verylarge batches, the water is then reduced to the desiredlevel, and a soup stock remains. Homemade stocks can havebones and shells in them, but no inedible matter is used inpreparing canned stocks. The batch preparation can beviewed as a mass tenderizing project. The meats are rarelychoice cuts from the most tender meats. Chicken meat, forexample, often comes from birds that were raised primarilyas egg layers, and then sold for soup when their layingseason was past. The preparation of soup stock tenderizesthe meat and draws many of the juices into the mix. Oncethe water is distilled away, the remaining soup stock isrich in tenderized meats and vegetables, and in theirnatural oils. These oils, which are also moist, are whymany consumers prefer to use a partially wet concentrate toa dry powder. It is easier to recover an oily broth from awet concentrate than a dry one.

Chemical Ingredients Added to Stock

At one time, the method for manufacturing canned soupproducts was simply to make soup, remove excess water, andput the rest in a can. But now, after the stock is made, avariety of new ingredients is added. Typical reasons foradding chemical ingredients are to enhance flavor and tomaintain product appearance. Flavor enhancers should have no flavor of their own.Rather they should work like a white light that brightenswhatever color happens to be present. One longtime popularflavor-enhancer has been monosodium glutamate, whichdepresses any initial sense of bitterness in a food's taste.Other enhancers are also offered. One new enhancer, calledshoyu, was introduced from Japan in 1995, and is said towork well with cheeses, meats, and vegetables. Shoyu isnaturally brewed and allows soups that use it to be labeledas having natural flavor. Product appearance can be treated with coloringingredients and other chemicals. For example, soups thatare heated and reheated can become runny when they arefinally heated for serving. One recently developedingredient to preserve a soup's viscosity combinesmethylcellulose gum and maize starch.

Packaging

Packaging Canned Soups

Most condensed soups come in cans that hold a netweight of between 10.5 and 11.0 ounces. When constitutedwith water or milk, this size yields between 21.0 and 22.0ounces of soup. Popular flavors such as tomato and chickennoodle also come in 26.0-ounce family-size cans.Semicondensed soups are often sold in 7.5-ounce cans,although many are available in the same sizes as regularcondensed soup. Obviously, semicondensed products yieldless ready-to-eat soup than do regular condensed products. Regular ready-to-serve soups are most commonly packagedin 19.0-ounce cans, yielding a little more than twoservings. Cans of ready-to-serve healthy soups aretypically smaller, containing between 15.0 and 16.0 ouncesof soup. Microwaveable ready-to-serve soups are normallypackaged in polystyrene cups that hold 7.0 or 8.0 ounces.The containers, which are often shrink-wrapped with plastic,have flip-top aluminum lids and plastic caps. Beforepreparation, the metal lid is removed and replaced with theplastic cap, which is punctured with venting holes for safeand mess-free microwave heating.

Dry Soups

Soup mixes are usually sold in 4- or 5-ounce boxes thatcontain two or more individual foil or plastic packets.Most instant soup mixes are packaged in a similar manner,although some come packaged in paperboard cups for use inmicrowaves. Regular ramens are always packaged in cellophane pillowpacks that contain 3 ounces of noodles, together with a foilpacket of bouillon-type seasoning. Instant ramens arepackaged in polystyrene or paperboard cups, with theseasoning already mixed in. Soup starters are normally sold in 7-ounce cylindricalcardboard canisters with plastic lids. Bean-based soupmixes are packaged in 20-ounce clear plastic bags, andinclude foil packets of seasoning.

Broth and Bouillon

Meat- and vegetable-based broths are normally packagedin cans that contain 14 fluid ounces, although broth alsocomes in family-size cans that can be three times thatamount. Bouillon is most often sold in 2.0- or 4.0-ouncepackages of compressed cubes. The cubes are wrapped infoil, and packaged in clear plastic jars or boxes. Eachpackage contains from six to 25 cubes of bouillon. Bouillonis also packaged in plastic bottles that contain 4.0 fluidounces. Powdered bouillon is sold in boxes of eight

individual foil envelopes or in 2.5-ounce jars.

Government Labeling Regulations

Government Labeling Regulations

One Soup Serving = 245 Grams

The U.S. Food and Drug Administration (FDA) regulatesthe labeling of foods, including soups. Since May 1994, thebasic unit of food-labeling regulation has become theserving reference size. It determines the standards for allclaims that can be made on the label. For soups, thereference size is 245 grams (8.6 ounces). Packages whosesoups, when reconstituted, weigh up to 368 grams must belisted as containing one serving. Packages whose soupsweigh over 368 grams but under 490 grams can be labeled ascontaining one or two servings, according to themanufacturer's preference. Packages with labels that occupy 12 or more squareinches must include a panel headed "Nutrition Facts." Thepanel must list the number of servings that can be preparedby following the directions; the total calories per serving;calories from fat; and amounts of total fat, saturated fat,cholesterol, sodium, total carbohydrates, dietary fiber,sugars, protein, vitamin A, vitamin C, calcium, and iron (inthat order).

Claims Are Sharply Defined

The 1994 regulations included a series of standards fordescriptive terms such as "light," "healthy," "fat-free,"and other health-oriented adjectives used on package labels.Of particular importance to the soup market has been thedefinition for "healthy," a term used in many soup lines. A"healthy" food must have no more than 3 grams of fat (1 gramof saturated fat), and cannot contain more than 480milligrams of sodium or more than 60 milligrams ofcholesterol per serving. The claim that a soup is "low" incertain elements, such as "low in sodium," is alsoregulated. Table 2-1 lists the maximum amount of an itemthat one serving of soup can contain and still be called"low."

II. THE MARKET

Market Size and Growth (1/3)

Market Size and Growth

Total Retail Sales Are Almost $4 Billion

Using data from Information Resources, Inc.'s InfoScanproduct and other sources, Packaged Facts estimates that

sales of soup in 1996 just about reached $4.0 billion, anincrease of almost 5% over 1995. The details of themarket's growth are summarized in Table 2-2.

Market Has Grown By 20% Since 1992

The soup market has grown by one-fifth since its 1992value of $3.3 billion. Growth in 1995 was unusually weakbecause of an especially mild 1994-1995 winter; however,1994 had seen a prolonged winter with many snowstorms, andthat year's rate of retail sales growth was 6.4%.

Market Size and Growth (2/3)

Growth in Pounds of Soup Sold Was Only 9%

Table 2-3 summarizes the growth of the soup market,measured in terms of pounds of soup product sold. PackagedFacts estimates that total sales in 1996 reached 3.1 billionpounds, up 1.8% from 1995's sales. Overall, volume grew by9.2% since 1992, less than half the rate of the dollargrowth. Whenever dollar growth outpaces volume, the dollargrowth is due to price increases, or the purchase of moreexpensive forms of a product. An especially importantcontributing factor in the rapid dollar growth has been theincreasing average unit price of canned soup.

Canned Soup Sales Up 21% Since 1992

Growth in canned soup's retail sales was slightly aheadof the market as a whole, rising by 21.3% since 1992.Packaged Facts estimates the 1996 canned soup categoryreached $2.9 billion. The volume growth, however, was much lower during thesame period, 6.6%. This difference indicates that onlyabout a third of the dollar growth can be attributed togreater consumption; the rest comes from increasedexpenditures per pound. Not all of this price increase isinflationary, however, as part of the change reflectsconsumer switches from lower-priced condensed soups to themore expensive ready-to-serve varieties. Figure 2-1 gives a quick visual comparison of thegrowth in dollar sales and in pounds. Dollar sales areindicated by bars and pounds by a line. The increasing gapbetween the line and the top of the bar indicates growthattributable to consumers spending more per unit of soup.

Market Size and Growth (3/3)

Dehydrated Soup Category Reaches $700 Million

Packaged Facts estimates the dehydrated soup categoryreached $700 million in retail sales for 1996, up some 3%

from 1995. Overall retail growth for the 1992-1996 periodwas 14%. The dollar growth in this category has been slowedas consumers have switched toward ramens, which cost lessthan the traditional soup mixes. Pound sales for dehydrated soup during the five-yearperiod, 1992-1996, grew by 17%, outpacing dollar salesgrowth. Thus, growth in the dehydrated soup categoryexhibited the opposite trend from that amongst canned soups.The trend was toward consumption of lower-priced soups. Theline in Figure 2-2 slightly closes the gap between line andtop of the bar, indicating an anti-inflationary trend.

Bouillon and Broth Shows Strongest Growth of All

Retail dollar sales of the bouillon and broth categoryof the soup market grew by 24.0% from 1992 to 1996, reachingan estimated $419 million, or 5.5% above the 1995 marker.Volume growth kept very close pace, rising 22.7% since 1992.The 1996 sales of this category reached 368 million pounds.The harmony between the two growth rates suggests that boththe broth and bouillon segments are contributing aboutequally to the category's growth. Figure 2-3 illustratesthat the unit sales have kept almost perfect pace with thedollar sales.

Factors in Future Market Growth: Market Maturity; Cannibalization;Growth is Economy-Proof

Factors in Future Market Growth

Maturity of Market Is Major Factor

The soup market is old, familiar, and has alreadypenetrated deeply into the society. This simple fact makesfurther growth difficult, although not impossible. Themarket does find ways to grow overall, but most of asegment's growth comes at the expense of some other segment.The rise of ready-to-serve canned soups, for example, hasbrought some new consumers into the market, but much of itsgrowth has come from cannibalizing the condensed soupmarket. Real growth in overall consumption rates is muchharder to create.

Effects of Cannibalization Are Ambiguous

Cannibalization itself is rarely completely neutral onmarket impact. Although it may have limited effect onvolume growth, a switch in soup products can alter themarket's dollar volume. Most changes in canned soupconsumption bring an immediate growth in the market, becausemost changes are switches from traditional soup concentratesto ready-to-serve or "healthy" varieties that cost more perunit. These trends have been underway for years in thecanned soup category, and appear likely to persist. These

changes are responsible for much of the annual growth amongcanned soups. Cannibalization among instant soups, however, does notalways have a positive effect on the market. Much of theactivity in this segment consists of movement toward theinexpensive Japanese ramen products. This downwardcannibalization has kept the dollar sales growth of thecategory smaller than it might otherwise have been.

Soup Growth Is Economy-Proof

The soup market does not depend on financialprosperity. It grew straight through the last recession(1990-1991). Traditionally, in fact, soup has been a hard-time food, allowing a satisfying meal at a low cost, so onemight expect sales to decline during good times. The soupmarket, however, has grown diverse enough to establish soupas a food for all budgets. The economic outlook in late1996 appears to be sound, and there is no reason to expectany changes that might harm the soup market.

Factors in Future Market Growth: Cold Weather; Life-Styles

Cold Weather Helps Market

Soup is a cold-weather food, and years withparticularly bad winters often turn out to be strong-growthyears. For example, 1994 saw an unusually snowy, stormywinter, and soup sales grew dramatically. Unfortunately,the long-term weather trend appears to be warming. Theexplanation for the trend remains controversial, but thedata clearly show that global averages have been rising forover a century, and there is no reason to expect the warmingto stop. Soup season, over the long term, appears likely togrow shorter than it is now. Fortunately, other growth factors continue to exist.The year following 1994's cold-induced growth saw a mildwinter and hot summer, yet the soup market continued togrow. The rate of growth was much reduced, but 1995 did notsee a market shrinkage. Ultimately, overcoming the seasonallimitation may depend on somebody finding a successful hot-weather-soup line. At this time, however, the weather trendappears to make strong, cold-based growth less likely,although exceptionally cold soup seasons remain likely toprovide occasional bonus years.

Contemporary Life-styles Favor Soup

Soup's ease of preparation should continue to help themarket grow, because contemporary life-styles favor quickfood preparation. Dual-income households mean that neitherpartner has time to devote hours to cooking; but soup can beready in a few minutes. Microwave ovens in the office alsomake it easy for people to prepare a quick cup of soup.

Factors in Future Market Growth: Soup-As-Ingredient; CategoryCompetition

Soup-As-Ingredient Is Growing

Even when people are in a mood to do real cooking for amore elaborate meal, soup marketers have found a way to turnsoup's easy preparation to advantage. Many soups now comewith recipes showing how to use the soup, dehydrated orcanned, as an ingredient in a recipe that turns an ordinarydish into something more unusual. This development hasadded real growth (not just cannibalization) to the marketby expanding the occasions when soup is consumed. It hasalso broken out of the soup season limits, allowing for hot-weather uses in summer salads. The development of the soupmarket as a source of ready-made seasonings has been animportant element in promoting market growth.

Competition Within Categories Has Contradictory Effects

Competition within categories of the soup marketeffects growth in contradictory ways. In the canned soupcategory, a trend from condensed soups to ready-to-serveproducts has slowed, but is likely to continue promotingdollar growth without assisting in volume growth. Anotherelement in the canned soup category is the increasedconsumer interest in high-end soups, those that emphasizehealth or quality preparation. The largest factor of all,however, appears to be the public's willingness to pay morefor a can of soup. The dehydrated soup category has seen a trend in theopposite direction, away from higher-priced mixes, towardlower-cost ramens. Recently, however, this trend appears tohave slowed and perhaps even reversed itself slightly, asthe public has increased its purchase of soup mix to be usedas seasonings rather than soup. Thus, cost competitionseems to encourage a faster growth rate for dollar salesthan for volume.

Projected Market Growth

Projected Market Growth

Total Soup Market Projected To Be Almost $5 Billion In 2001

Based on factors discussed in the previous section,Packaged Facts projects that the total soup market's retailvalue will be close to $5 billion in the year 2001. Totalsoup volume is projected to reach 3.4 billion pounds thatyear. Overall dollar growth is projected to be 25%, whilevolume growth is projected to reach only 10%. See Tables 2-4 and 2-5.

Canned Soup Sales To Reach $3.6 Billion

Packaged Facts projects an annual canned soup growthrate of 4.7% in retail dollars, bringing this category to$3.6 billion in the year 2001. This retail pace is muchfaster than the projected annual volume growth of 1.4%.Rising canned soup expenditures reflect anticipated stronggrowth of the high-end of the canned soup category.

Dry Soup Sales To Reach $844 Million

Dehydrated soups are projected to grow at an averageannual rate of 3.8%, bringing the category's retail marketvalue in 2001 to $844 million. This growth slightlyoutpaces the rate of volume growth, projected at about 3.6%per year on average. The turnaround from the anti-inflationary growth of the past five years reflects therecent stabilization of the balance of sales between ramensand mixes.

Bouillon and Broth Continues To Enjoy Strong Growth

Packaged Facts projects that the bouillon and brothcategory will continue to enjoy the soup market's strongestgrowth, although more of it will be made by rising pricesthan was true during the preceding five years. PackagedFacts projects retail dollar growth of approximately 5.1%annually, bringing the bouillon and broth segment to $537million. The pounds sold growth rate is projected at about4.5% annually, reaching 458 million pounds sold in 2001.

Market Composition: Canned Soup

Market Composition

Canned Soup Dominates with Almost Three-Quarters of DollarVolume

The soup market still means the canned soup market, asillustrated in Figure 2-4. Packaged Facts estimates that in1996 canned soups accounted for 72% of the market in retaildollar sales. Dry soup sales constituted almost 18% of themarket, while bouillon and broth products amounted toslightly less than 11% of sales. These figures are almostidentical with the shares reported for 1993 in the previousPackaged Facts report, and are not expected to change much,at least over the next several years.

Canned Soup Even More Dominant When Measured by Volume

Canned soup sales accounted for 79% of the soupmarket's volume by weight in 1996. Figure 2-5 illustratesthe difference between the shares as measured by volume andby dollars. An important part of the difference comes fromthe light weights used in the dry soup market. Units sold

in dry soup are much lighter than the canned soup units.Volume share is considered in terms of pounds of soup. Drysoup shares fall to 9% of the volume, while broth/bouillonshares are slightly higher than the dollar shares, 12%.

Market Composition: Condensed Soups; Best-Selling Flavor;Soup Mixes; Ramens

Condensed Soups Remain Strong Among Canned Soups

Condensed soups continue to account for over half ofthe canned soup market. Measured in dollars, Packaged Factsestimates that condensed soups account for 56% of thecategory sales. Measured in volume, the share is evenlarger, 62%. The reason for the difference is in the higherprices charged for ready-made soups. See Figure 2-6. Sales of condensed soups appear to have stabilized,after some years of shrinkage in market share. Thecompetition is between ease of preparation and price.

Chicken Noodle Is Best-Selling Flavor

Trade sources indicate that chicken noodle is still thebest-selling flavor of canned soup. When soup marketerswant to call attention to changes in their soup line, theyoften begin by enhancing the chicken noodle variety.Recently, some marketers have enhanced the amount of chickenin the can or gone to using all white meat; however, as thenumber of varieties of soup increases the importance of anysingle type goes down.

Soup Mixes Lead Sales in Dry Soup Category

More than half (56%) of dry soup's dollar sales comefrom mixes. Ramens account for 41%, while soup starters area modest 3%. See Figure 2-7. Although these relations havebeen about the same for years, these shares do show a shiftof about three percentage points from ramens to mixes.Perhaps the non-soup uses of soup mixes (mostly used asseasonings) are beginning to strengthen the soup mix marketshare.

Ramens Lead Dry Soups When Measured in Volume

Ramens still dominate the dry soup market when measuredin volume, pounds. Ramens have a much lower price perpound. Figure 2-8 compares share of dollar sales with poundvolume. Ramens are responsible for 68% of the dry soupvolume, while soup mixes account for 30%. Soup starters areresponsible for 2% of the share. See Figure 2-8.

Market Composition: Broth/Bouillon; Soup Season; The South

Canned Broth Dominates in Broth/Bouillon Category

Although figures providing a precise breakdown of thebroth/bouillon category of the market were unavailable,Packaged Facts estimates that canned broths account foralmost two-thirds of the dollar sales, while bouillonconcentrate is responsible for just over a third. In theprevious report, Packaged Facts data indicated that brothswere responsible for 63% of sales, and bouillon had 37% ofthe market. Since that time, broth growth has outpacedbouillon growth, bringing the broth sales even closer to thetwo-thirds mark.

Winter Is the Soup Season

Winter and the big holidays spur much of soupconsumption. Thanksgiving meals traditionally begin with asoup, and November marks the start of the soup season.January is soup's peak month and is also a strongpromotional month, designated national soup month. Over 60%of soup sales come during the six-month fall/winter season,from October 1 through March 31.

The South Has the Largest Number of Soup Consumers

Although regional sales data are not available, figuresfrom the Simmons Market Research Bureau do provideinformation about the numbers of consumers in differentregions. A later chapter of this report discusses consumerpatterns for regions more fully; however, it is notable thatin terms of absolute numbers of consumers, the South hasboth the largest number of people who buy soup and thelargest number of people who are heavy users of soup(consuming four or more cans, or three or more dry souppackets, per week). Table 2-6 shows the number of principalshoppers in each of the country's regions who buy soup. The reason for the strength of the South is simple: Ithas the largest number of shoppers. Thus, even though theMidwest has a significantly higher proportion of thepopulation that buys soup, the South still has the highestnumber of soup shoppers, in absolute terms. In the South,over 31 million people buy canned soup or broth during atypical week, and over 14 million people buy dry soups. TheSouth is also the strongest region for numbers of heavy soupconsumers, with almost 10 million shoppers consuming four ormore cans of soup or broth in a week and almost four millionshoppers consuming three or more packages of dry soup in aweek. The Midwest is the second-best region for numbers ofconsumers. Almost 24 million shoppers buy canned soups andbroths, and over 12 million buy dry soups. Seven million ofthose who buy cans are heavy users, and three million of thedry soup shoppers are heavy users. The West ranks third among regions for numbers of soupshoppers, with well over 17 million shoppers for cannedproducts and almost 10 million shopping for dry soups. The

Northeast is fourth, with figures that are just a fewhundred thousand fewer than the West for each type of soupshopper.

III. THE MARKETERS

The Marketers (1/2)

The Marketers

Hundreds of Firms Market Soup

Packaged Facts has identified about 300 firms marketingsoup in U.S. retail outlets. (See Table 2-7.) There are,undoubtedly, many very small, gourmet marketers that havegone undiscovered. However, most of the marketers occupysmall niches. The market is dominated by a few giants. Thethree largest companies account for almost three-quarters ofthe sales.

Canned Soups Have Most Powerful Marketers

The largest marketers make canned soup. Packaged Factshas identified almost 90 canned soup marketers, althoughfewer than five have even a 1% share of the market. Exceptfor the very largest, competition in this market meansfinding a niche, typically a regional market with somespecialty flavors.

Dry Soups Draw Largest Number of Marketers

About 125 of the marketers listed by Packaged Factssell dry soups. This category appears to be the most highlycompetitive portion of the market, as no company has managedto dominate it the way one marketer dominates canned soups.Marketers have created numerous specialty niches andestablished various regional strengths.

Broths, Bouillons, and Soup Starters Have Lively Competition

The makers of broths, bouillons, and soup starters arevery competitive, although a much smaller share of themarket is at stake. Packaged Facts has identified about 80marketers in this category. The breadth and variety of souptypes here offers many niches.

Frozen/Refrigerated Soups Attract Relatively Few Marketers

Packaged Facts found around 25 marketers that competefor the retail frozen/refrigerated soup market; however,that number may actually be much higher, because much ofthis market is sold under private labels.

Most Major Marketers Are Large International Food Sellers

The largest soup marketers tend to be very largeinternational food companies. Thus, the largest canned soupcompany, the Campbell Soup Company, and the largest dry soupcompany, Unilever, are multinational giants with billions insales. The advertising and distribution resources availableto these firms give them a strong advantage in the market;however, it must be noted that the Campbell Soup Companybegan its great growth by dominating the canned soup market.Also, there are a number of soup marketers, such as Nestleand Mars, that are international giants but relatively minorfigures in the soup market.

The Marketers (2/2)

Independent Firms Are Important Marketers

The secondary marketers tend to be independent firmsthat have established a niche. The smallest marketers areoften start-up firms created to market a gourmet recipe. Agrowing number of marketers, however, are large Japanesefirms that are far better known in Asia than in the UnitedStates. They are bringing dogged persistence to the supportof their brands.

Most Marketers Compete in Only One Category

Soup marketers tend to limit their competition to oneof the market's categories canned, dry, bouillon/broth, andfrozen/refrigerated. Only the very largest marketers canbring the resources needed to compete in a variety ofcategories. The positioning of products in the differentcategories varies so greatly that, except for the verylargest brands, there may not be much consumer loyaltycarried over between categories; so a marketer has toestablish itself anew in each category.

Major Marketers Generally Offer More Than One Brand

Almost all of the major marketers offer more than onebrand. This approach allows a marketer to penetrate severalmarket niches that might otherwise seem contradictory.

Private-Label Marketers Are Active

Private-label brands are strong in every segment of thesoup market. Many of the large multinational food marketersthat have only a small presence under their branded form areinvisibly active in the private-label market. The largestmarketer in this area is H.J. Heinz. According to FoodProcessing magazine, Heinz is responsible for 85% of private-label canned soups.

Marketer Shares: Top Three; First Place

Marketer Shares

Top Three Marketers Have Almost Three-Quarters of the Market

The top three marketers Campbell Soup, the Pillsburydivision of Grand Metropolitan, and the Thomas J. Liptondivision of Unilever were responsible for 72% of the U.S.soup market's 1995 sales. Table 2-8 lists the market sharesfor the soup market's ten leading producers. All together,these top ten accounted for over 90% of America's retailsoup sales in 1995. All of the firms listed in the tableare multinational food companies.

Campbell Soup Is Largest Marketer

The Campbell Soup Company is the largest soup marketerwith 60% of the total market sales in 1995. The majorsource of its strength is evident in the table: It isactive in three of the four market categories. Campbelldominates the canned soup market even more vigorously, butalso has a strong presence in the dry soups and broths andbouillons categories. Formerly, it also participated in thefrozen/refrigerated soup category as well, but withdrew fromit in 1994. One hundred years ago Campbell virtuallyinvented the retail soup market, and continues to lead it.It has eight times the market share of the second mostprominent soup marketer.

The Campbell Soup Company markets soups through four ofits divisions:

- Campbell Soup: The largest of Campbell's soupmarketers. Besides having many brands under the generalCampbell's name, it also sells many broths under the Swansonbrand. Canned soups, dry soups of various types, and brothsare all marketed through this division.- Pepperidge Farm: Well-established, high-quality brandoffers cans of gourmet soups and broths imported fromCanada.- Catelli-Habitant: Another line of imported canned soupsfrom Canada. These are French-Canadian soups.- Sanwa Foods: Campbell purchased a Japanese producer,and thus offers Japanese ramens in the market's dry soupcategory.

Marketer Shares: Second Thru Fifth Places

Grand Metropolitan Has Second Place

Grand Metropolitan, offering Progresso brand soupsthrough its Pillsbury division, stands in second place,although far behind Campbell Soup in sales. Progresso issold strictly as a canned product canned soup as well ascanned broth. In recent years the Progresso brand has

developed a complicated status. It was long part of PetFoods, then bought in 1995 by Pillsbury and made part of itsinternational owner, Grand Metropolitan.

Private Label Stands Third Among Soup Market Sales

Taken as a whole, private-label brands rank third insoup market sales. It is found in all four marketcategories, although, of course, no single soup marketermakes all four forms of private-label soup. If private-label sales were properly broken down and assigned tovarious marketers, H.J. Heinz, Borden, and Nestle wouldprobably all stand higher in the overall rankings ofmarketers.

Unilever Is in Fourth Place

The fourth-largest marketer of soups (third amongbranded marketers) is Unilever, whose Thomas J. Liptondivision is very strong among dry soup marketers. It alsohas a small bouillon business, but has no presence amongcanned soup makers. Its lines of dry soups include Cup-A-Soup, Lite Cup-A-Soup, Kettle Creations, Recipe Secrets, andSoup Secrets, all under the Lipton umbrella.

ConAgra Is Fifth Among Soup Marketers

ConAgra, with its Healthy Choice brand marketed throughthe company's Hunt-Wesson division, is in fifth place amongsoup marketers. Healthy Choice is a canned soup and is partof a brand line that has done very well in positioningitself to serve America's interest in healthy lifestyles.Although Table 2-8 shows ConAgra in fifth place, it is in avirtual tie with the two marketers below it on the table.Each has a 3% market share, plus or minus one-tenth of apercentage point.

Marketer Shares: Sixth Thru Tenth Places

Japan's Nissin Foods Occupies Sixth Place

Nissin Foods from Japan is in sixth place among soupmarketers. Although the company's brand of the same name isdistributed throughout the United States, it is especiallystrong on America's West Coast. Nissin introduced ramensoups to the United States, and is the largest soup marketerthat limits itself to the soup category. Its Nissin linesof soup include Cup Cuisine, Cup O Noodles, Mug Noodles,Ramen Classic, Top Ramen, and Top Ramen Oodles of Noodles.

Toyo Suisan Kaisha Is Seventh

The Japanese giant Toyo Suisan Kaisha, selling dry soup

under the Maruchan brand name, occupies seventh place amongsoup marketers in the United States. Like Nissin, Maruchansoups are ramens, and as the two Japanese firms fight formarket share they have been expanding the presence of ramensin the American market.

CPC International Has Eighth Place

CPC International holds eighth place. Its best-knownbrand is Knorr soup mixes and bouillons, but it has severalother dry soup brands as well, marketed through a variety ofdivisions in the company. Knorr is marketed through itsBest Foods division, which also offers a refrigerated soupline. Broths and dry soups are also marketed through theIsrael Edible Products division, under the brand name ofTelma, while under the National Food Industry division a drysoup is sold as National Food Mariquita. The Iberia brandof canned soup is handled by CPC's Iberia Foods division.

Borden Holds Ninth Spot

Borden is active under a variety of brand names,including Wyler's and Steero for bouillons, Snow's andDoxsee for canned soups, and Ronco for dry soups. It alsomarkets a Borden Soup Starters brand. Borden is very activein the private-label market. Its ranking as the ninth-biggest soup marketer does not take into consideration itsprivate-label sales.

RJR Nabisco's Broth Puts Company in 10th Place

The Nabisco Foods Group of RJR Nabisco occupies 10thplace in the soup market, thanks to the popularity of itsCollege Inn brand of canned broth.

Marketer Shares: Leaders in Canned Soup

Campbell Sells Three-Quarters of Canned Soup

The canned soup category is dominated by Campbell Soup.Table 2-9 shows the 10 leading marketers, and Campbell Soupis in first place with a 77% market share. This enormousposition is supported by many lines of products. Under theCampbell's brand it offers Condensed Soup, Chef's Kettle,Chunky, Healthy Request, Home Cookin', Man Handler,Microwave Chunky, and Special Request.

Grand Metropolitan Second Canned Soup Marketer

Grand Metropolitan's line of soups put the firm insecond place among canned soup marketers. Its leading brandis Progresso, with extensions under the names of Progresso

Healthy Classics and Progresso Pasta soups. Other brandnames used by the firm for marketing canned soup are Hainand Old El Paso.

Private Label Stands Third

Private label soups, chiefly manufactured by H.J.Heinz, stand in third place among canned soup marketers.Almost every supermarket carries a private label cannedsoup.

ConAgra Has Fourth Position

ConAgra, with its Healthy Choice line of soups, isnumber four among canned soups. The Healthy Choice name hasestablished itself over a variety of food categories and hasbeen important in developing the niche for soups positionedto serve the healthy life-style market. ConAgra's growthhas been very quick. It only entered the soup market in1991, and by 1993 had achieved its current ranking. Its1995 sales grew by almost a fifth (19%).

Marketer Shares: Other Canned Soup Leaders

Health Valley Nature Foods Holds Fifth Place

Health Valley Nature Foods, selling under the HealthValley and Health Valley Fast Menu brands, occupies thefifth rung among canned soup marketers. Health Valley rankshighest among what might be called the third-tier marketers,those with less than 1% of the canned soup category. (Thehigher-ranked marketers would be in the second tier, exceptfor Campbell, which holds the first tier by itself.) Healthy Valley sales in 1995 suffered significantly,declining by 12%.

Hormel Foods in Sixth Place

Hormel Foods has entered the soup market, buying apopular bouillon brand (Herb-Ox) and, among canned soups,selling the Hormel Micro Cup. It does well enough to putthe company in sixth place among canned soup marketers.

Manischewitz and Quaker Oats Tied for Seventh Place

Two canned soup marketers are tied for seventh place,Manischewitz Food Products and Quaker Oats. Manischewitzsells canned soups under its own name and under the HorowitzMargareten brand. Quaker Oats's canned soups are sold underthe Pritikin brand. Each marketer has found a distinctiveniche kosher soups for the former, while the latter offersproducts for weight-conscious consumers.

Soparind and Baxter's Tied for Ninth Place

The last two rungs on the top-10 list are also tied.Soparind sells a canned soup under the Anderson's brand.Baxter's of Speyside has become America's best-sellingmarketer of imported canned soups. Baxter's is a UnitedKingdom firm, based in Scotland, that has developed a loyalfollowing in the 10 years that it has been available in theUnited States. As an import, it is sold as a higher-pricedgourmet product targeted at the market's higher end.Baxter's sales grew very well in 1995, by 25%.

Marketer Shares: Dry Soup Leaders

Unilever Leads Among Dry Soup Marketers

The Thomas J. Lipton division of the internationalgiant Unilever accounts for a quarter (26%) of the sales inthe dry soup category of the market. (See Table 2-10.)Sales have shown healthy growth as well. Lipton's salesoutpaced the category as a whole, growing 5.4% in 1995;however, its long-term trend has been shrinking. In thelate 1980s, Lipton accounted for about a third of all drysoup sales, but the Japanese ramen makers have cut into itsmarket share. Its best-selling brand is Recipe Secrets.

Nissin Foods Is Second-Leading Dry Soup Seller

The Japanese giant, Nissin Foods, ranks as the second-largest dry soup seller in the U.S., enjoying 16.5% of thecategory's sales in 1995. It is the U.S. leader in ramensales.

Toyo Suisan Kaisha Holds Third Place on Dry Soup Ladder

Another ramen producer, Toyo Suisan Kaisha, sellingsoups under the Maruchan brand name, holds third place amongdry soup marketers. Its ramen soups compete with NissinFoods', but have also been successful in expanding themarket as a whole and in reducing the market share of non-Japanese companies. Before the success of the Japanese,Campbell Soup was the second-largest dry soup marketer.

CPC Has the Fourth Position

CPC sells dry soups through its Best Foods division,under the Knorr brand and various Knorr lines (Knorr Chef'sCollection, Knorr Swiss). It also markets dry soups in twoof its other divisions: Israel Edible Products and NationalFood Industry. In 1995 CPC suffered a 10% decline in salesand saw its share drop to under 10% of dry soup sales in theUnited States.

Marketer Shares: Other Dry Soup Leaders

Campbell Soup Holds Fifth Spot

Campbell Soup has two divisions producing dry soups.Its Campbell Soup division offers Campbell's Cup, Campbell'sCup A Ramen, and Campbell's Ramen. Its Sanwa Foods divisionsells dry soups under the brands Caldo Pronto, Ramen Pride,and Sanwa. Campbell's 1991 purchase of the Sanwa Foodscompany has kept it as an active participant in the ramenmarket. Campbell saw its 1995 dry soup sales advance almost12%. In 1994 the company trailed CPC by four and a halfshare points, but in 1995 it gained ground, and in 1995 cutthe gap to two and half points.

Private Label Is Sixth-Largest of the Dry Soup Marketers

As with canned soup sales, the rung occupied by private-label soups marks a bright line between the major marketersand the secondary ones. Private label accounts for 6% ofdry soup sales, and saw its 1995 sales increase by 5%.

Quaker Oats Uses Nile Spice To Climb into Seventh Place

Leading among the second tier of dehydrated soupmarketers is the Nile Spice division of Quaker Oats, withits brand of the same name. Its sales are rapidly growing,jumping 14% in 1995, pulling it ahead of Borden in therankings. Originally a spice marketer based in the PacificNorthwest, the company was bought by Quaker Oats, whichintroduced an everyday low-pricing strategy for thecompany's products. The soups are packaged in colorful cupsand feature low sodium and low fat. Quaker Oats alsomarkets dry soup through its Golden Grain Macaroni division,but it accounts for much less of the company's dry soupsales.

Borden In Eighth Spot, Thanks to Mrs. Grass

Borden ranks eighth among dehydrated soup sellers,thanks chiefly to its Mrs. Grass line of dry soups. It alsohas dry soups from its Borden Pasta division, under thebrand name of Ronco. In 1994 Borden held the seventh spot,but its sales fell off while Nile Spice was booming, and themarketer fell back to the eighth rung.

N.K. Hurst Is in Ninth Position

N.K. Hurst, selling dehydrated soup under the brandHurst HamBeens, is in ninth position. It has found a smallbut stable niche with its packages of raw, dried beans mixedwith flavoring.

Union Is in 10th Place

Another ramen vendor, Union, stands 10th among sellersof dry soups. With its Smack Cup A Ramen and Smack Ramensoups, it enjoys a 2% market share.

Marketer Shares: Broth/Bouillon Leaders

Campbell Leads Among Broths, Bouillons, and Soup Starters

The most valuable data in calculating market sharescomes from Information Resources Inc. (IRI), which combinesbroths, bouillons, and soup starters into one category.This makes for a somewhat odd category because it putscanned broths like College Inn in competition with dry cubeslike Wyler's bouillon. None the less, because the data areso reliable, this chapter follows IRI's lead in categorizingsoups this way. In this category, Campbell is the leadingmarketer with 37% of 1995 sales. (See Table 2-11.) It markets broths etc. under the brands of Campbell'sCondensed Broth, Campbell's Healthy Request Broth, SwansonBroth, and Swanson Natural Goodness Broth. It also sells agourmet broth from Canada under the Pepperidge Farm brand.

Borden Is in Second Place

Borden is in second place among broth and bouillonmakers, thanks chiefly to its Wyler's brand of bouillon.Other products in this category are Borden Soup Starters,Borden Lite Line, MBT, and Steero. The Borden Grocerydivision also markets a broth, under the Los Calditos brand.Borden's 1995 sales declined by 1%.

RJR Nabisco Holds Third Place

RJR Nabisco occupies third place in the broth andbouillon category. Its College Inn brand of canned brothaccounts for one-eighth (12.4%) of the broths/bouilloncategory's sales.

CPC International Stands Fourth

CPC International is fourth in the broths category.Besides the Knorr and Bovril brands from its Best Foodsdivision, it markets the Telma brand from its Israel EdibleProducts division.

Marketer Shares: Other Broth/Bouillon Leaders

Private-Label Broths and Bouillons Are in Fifth Place

Private-label products hold fifth position. Sales grew

5% in 1995. Part of this strength comes from the fact thatthere are private-label broths, bouillons, and soupstarters, whereas most branded marketers restrict themselvesto one segment of this category.

Hormel in Sixth Place

Hormel Foods is in sixth place now that it has boughtthe Herb-Ox brand of bouillon from Reckitt & Colman. Salesand share have declined under the new ownership.

Sara Lee's Sweet Sue Kitchens Is Seventh

Sara Lee's Sweet Sue Kitchens division offers a cannedbroth and stands seventh in the category. Sales in 1995grew a hearty 14%, although it is still well behind itschief rival, College Inn brand broth.

Nestle Garners Eighth Spot with Maggi Bouillon

Nestle's Maggi brand of bouillon is in eighth positionamong this category's marketers. Growth in 1995 was ahealthy 8%, although overall market share remains low.

Grand Metropolitan and Goya's Latino Broth Tie for NinthPlace

Two marketers are tied for ninth position, GrandMetropolitan and Goya Foods. Grand Metropolitan marketsHain and Progresso brand broths. Although sales arerelatively small, they did well in 1995, growing 23%. Goya Foods, a leading marketer of Latino foods, isstrong in those regions that carry its products.

Marketer Shares: Frozen/Refrigerated Soup Leaders

Private Label Leads Among Frozen/Refrigerated Soups

Private-label sales amount to just under a third (31%)of all frozen/refrigerated soup sales and lead thiscategory; however, it is important to note that private-label sales and share in this segment have been decliningrapidly. Sales fell 11% in 1995, and market share felldramatically too, from 41% to 31%. These shifts suggestthat dramatic changes are underway in this small category.Table 2-12 illustrates the changes. This table differssubstantially from the list published in the previousPackaged Facts report. The very fact that private label leads the list ofmarketers indicates a special market. Usually nationalleaders outsell private-label brands, so when private labelranks as number one, the branded marketers are likely to beregional. However, the rapidly changing sales rates suggest

that some soups have begun to find larger markets. Another important set of figures in the table showsthat, while the market as a whole grew by 15%, sales forthose marketers outside the top 10 fell by 26%. Such starkcontrasts indicate that the market is consolidating anddeveloping a few leading lines.

Fast-Growing Bob Evans Is Number Two Frozen/RefrigeratedSoup Marketer

Sales of Bob Evans Farms soups grew 168% in 1995,firmly establishing the company as the largest singlemarketer of frozen/refrigerated soup and one with a realpotential for moving ahead of private-label sales. In 1994Bob Evans held a very distant second place, standing 29percentage points behind private label. In 1995, however,Evans grew and private label sales shrank, so the two endedthe year with Evans only six points behind private label'smarket share.

Ivories in Third Position for Frozen/Refrigerated Soups

Ivories soups hold third place amongfrozen/refrigerated soups. Sales in 1995 grew by almost aquarter (24%) and helped move the company up from fourthplace among refrigerated soup marketers.

Stockpot Soups Drops to Fourth Place

Sales were off 2% for Stockpot Soups, and that wasenough for it to fall from third to fourth position asIvories' sales grew. Besides its Stockpot brand, Stockpothas a smaller brand called Northern Cove. The company'sentire decline is accounted for by Stockpot's loss of sales.Northern Cove actually gained some market share.

Marketer Shares: Other Frozen/Refrigerated Soup Leaders

Winter Garden Salad Leapfrogs to the Fifth Rung

Enjoying an 87% increase in sales in 1995, WinterGarden Salad jumped from seventh to fifth place amongfrozen/refrigerated soup marketers. The success has comewith its Carry Out Cafe brand. Soup sold under its WinterGarden brand is being phased out, and sales declinedsharply.

Yaohan Japan Is Sixth Among Frozen/Refrigerated SoupMarketers

Operating through its Sakura Noodle division, YaohanJapan's Chikara brand has put the company sixth among

marketers of frozen/refrigerated soups. Sales in 1995 grewonly 2%, not enough to keep pace with the category as awhole, and thus produced a share decline of half of onepoint. Yaohan is the leading frozen/refrigerated soupimporter.

Moonlite BBQ Inn Holds Seventh Place

Sales fell 4% in 1995 for Moonlite BBQ Inn, and themarketer slipped from sixth into seventh place. The rankingof a marketer like this indicates how small and regional thefrozen/refrigerated soup category remains. This marketer isa restaurant and caterer in Owensboro, KY, that also sellssome of its soup through retail outlets in the area.

Hanover Foods Jumps to Eighth Place

With sales increasing by 450%, Hanover Foods has becomean active participant in the refrigerated soup category.Its Spring Glen Fresh Foods division enjoyed a great boom in1995.

Vitasoy International Holds Ninth Place

The Azumaya line of soups, imported from Japan byVitasoy International, place ninth in thefrozen/refrigerated soup category. Sales grew 11% in 1995.

Paterson Soupworks Stands 10th

Paterson Soupworks, with its Tabatchnick brand, is in10th place. It sells kosher soups, mostly to foodserviceoperators and restaurant kitchens; however, it is alsoactive in the retail business, dominating the niche forJewish frozen/refrigerated soups.

Brand Shares (Canned): Campbell

Brand Shares

Three Campbell Brands Top the Canned Soup Hit Parade

The top three brands of canned soups all come fromCampbell Soup. Table 2-13 shows that the classic red-and-white cans of Campbell's condensed soups enjoy almost halfof the canned soup category's sales (48.8%). The previousPackaged Facts report showed that this brand's sharedeclined throughout the early 1990s. In 1991 Packaged Factscalculated the "Red-and-White" share at 53.8%, but by 1993this had slipped to 48.9%. Table 2-13 shows that thedecline continued into 1994, but the trend was reversed in1995. Market share grew by .07 percentage point that year. Campbell's Chunky soups are in second place, although

sales slipped a bit in 1995. In this case the slippagecontinues a trend visible throughout the decade. In 1991the brand enjoyed almost 15% of the category sales, but by1995 that had slipped to just under 12%. It may be losingshare to Healthy Choice Thick and Hearty. By contrast, Campbell's third brand, Healthy Request,has been growing in importance throughout the 1990s, and in1995 it moved ahead of Progresso's original brand. HealthyRequest is the most popular of the soup brands that puts theword health or healthy right into the name. One other Campbell brand is also on the chart,Campbell's Home Cookin'. Until recently it was a morepopular brand than Healthy Request, but it has not enjoyedthe latter's boom. Sales have shown no obvious trend in the1990s, although they were off by 2% in 1995. It occupiesfifth place on the table.

Brand Shares (Canned): Progresso, Other Leaders

Progresso Brands Hold Fourth and Seventh Slots

Progresso is America's fourth-leading brand of cannedsoup. Share has slipped slightly during the decade, fallingfrom about 10% to 8%. These estimates also includeProgresso Pasta soups. Progresso Healthy Classics, however,has grown respectably. Introduced in 1993, it has climbedto seventh position, ahead of the original health-orientedentry, Healthy Choice, from ConAgra.

Healthy Choice Brands Rank Sixth, Eighth, and 10th AmongCanned Soups

Healthy Choice brands from ConAgra dominate the lowerhalf of the canned soup table. The most popular is HealthyChoice Thick and Hearty. The brand was only introduced in1992 and was an immediate hit. By 1993 it had already movedahead of the original Healthy Choice soup. This ready-to-serve, rich soup has become the classic form of HealthyChoice. The original soup's share has never recovered from theheavy cannibalization of the brand sparked by the Thick andHearty version; however, it grew very rapidly in 1995, withsales up 254%. Healthy Choice Traditional Broth is classified as acanned soup in the sales data. It holds 10th place on thechart, with sales in 1995 down 4%.

Health Valley Brand Is in Ninth Place

Health Valley canned soups is in ninth position, theonly brand among the top 10 canned soups that is notmarketed by an international food giant. It is in directcompetition with the other "health" brands and has held itsown throughout most of the 1990s; however, in 1995 sales diddrop 12%.

Brand Shares (Dry): Lipton

Lipton Recipe Secrets Leads Among Dry Soup Brands

Lipton Recipe Secrets, a brand only introduced in 1992,leads among all dehydrated soups, with 13% of the dry soupcategory. The Lipton brands reflect a marketing change madeearlier in the decade. Previously, Lipton soups were theleading brand, with Lipton French onion soup its mostpopular variety. In 1992 the French onion soup was movedover to the new Recipe Secrets brand, guaranteeing that thebrand would meet with success. Lipton was so pleased with its Recipe Secrets that itchanged the remaining portion of its Lipton soup line to theLipton Soup Secrets brand that now holds seventh place. Twoother Lipton brands are also among the top 10. Lipton Cup-A-Soup is in eighth place, and Lipton Kettle Creations hasclimbed to a ninth-place tie, after a very strong 1995, inwhich sales grew 154%. Table 2-14 shows the leading dry soup brands andindicates the heavy activity among the brand leaders. Thetable is also notable for its final listing, showing how allother brands fared. Despite the good growth for the drysoup category in 1995, the non-leading brands saw theirtotal sales fall by 9% and their market share fall from overa third (36%) to under a third (32%). The brand leaders inthis category are gaining strength.

Brand Shares (Dry): Other Leaders

Maruchan Gets Second Place to Itself

Toyo Suisan Kaisha's challenge to Nissin with itsMaruchan brand was rewarded in 1995, when it gained secondplace by itself. In 1994 it had been tied with Nissin Cup ONoodles for second rank. It is now America's leading ramenbrand. Maruchan grew by offering spicy ethnic flavors.Sales for the brand grew 11% in 1995. Another brand, Maruchan Instant Lunch, from the samemarketer, holds sixth position.

Nissin Brands Hold Third and Fourth Slots

Nissin Cup O Noodles is the third-ranked dehydratedsoup, and Nissin Top Ramen holds fourth position. Top Ramengrew very rapidly in 1995, with a sales jump of 80% thatcarried it from ninth place in 1994 to fourth. Three out ofthe top four dry soups are now Japanese products, indicatinghow strongly the importers have made their presence felt inthis market as they have competed successfully against theAmerican cup-of-soup-style product.

Knorr Climbs into Fifth Slot

The Knorr brand of soup from CPC International's BestFoods division saw 1995 sales grow by 14% and carry it intofifth place on the list of best-selling dehydrated soupbrands.

Troubled Campbell's Brand Slips to 10th Spot

Campbell's brand dehydrated soup fell into a ninthplace tie with Lipton Kettle Creations, a brand it hadoutsold in 1994. Sales for the Campbell's brand in 1995fell 16%.

Brand Shares (Broth)

Swanson Is the Leading Broth Brand

The best-selling brand of canned broth is Swanson fromCampbell Soup. It accounts for almost a fifth (18%) of thebroth, bouillon, and soup starter market. Table 2-15 lists the top 10 brands in this category. Two other brands from Campbell Soup are on this table.Campbell's concentrated broth holds fourth place, and theSwanson Natural Goodness line of broth is in sixth place.The latter brand enjoyed a good year in 1995, growing by21%, the best showing among all brands on the list.

College Inn Is Second-Best-Selling Broth Brand

RJR Nabisco's College Inn brand is the second-best-selling brand of broth. In 1994 it was third on the ladder,but then climbed to number two. Sales in 1995 almost keptpace with the market as a whole and its share of thebroth/bouillon market stayed steady.

Borden Brands Are Third, Eighth, and 10th

The best-selling brand of bouillon cubes is Wyler's,which slipped into third rank among all broth productsbecause of a 3% decline in sales in 1995. It still welloutsells other bouillon cubes. Wyler's is a Borden's brand. Another product from the same marketer, Borden SoupStarters, is the eighth most popular brand in thebroth/bouillon category. The company's Steero brand ofbouillon cube holds 10th place on the leader list, afterseeing its 1995 sales decline 3%.

Knorr Bouillon Stands Fifth in Its Category

The Knorr brand of bouillon cubes is fifth in thebroth/bouillon category, and is second among bouillon cubebrands. Sales in 1995 showed a solid 4% growth.

Herb-Ox Is Seventh

The Herb-Ox brand, now marketed by Hormel Foods, isseventh in the broth/bouillon category. A popular bouillonbrand, its sales have slipped a bit in recent years, falling3% in 1995.

Sweet Sue Is Ninth

Sara Lee's Sweet Sue brand showed strong growth in1995, up some 14%, and is in ninth position. Sweet Suebroth is the fourth-best-selling canned broth in thecountry.

Competitive Situation: Campbell (1/2)

Competitive Situation

Campbell Complicates the Competitive Basics

In any food market, the basic elements of competitionare price, flavor, and quality, but competition in the soupmarket faces one more powerful fundamental: the CampbellSoup Company. It dominates sales, shelves, and theimagination of many consumers. What is more, itaggressively seeks to maintain its T. rex's share of themarket. The playing field of soup competition, therefore,reveals one great mountain, Campbell Soup, that stretchesinto every territory. The other companies must competeagainst one another for the portion of the field notcontrolled by Campbell, while, at the same time, they haveto worry about being buried by a sudden avalanche fromCampbell's heights. Even as a group, they are too small tothreaten much short-term gain against the mountain, althoughover a very long run they might tame its slopes and occupyits territory. In short, competition in the soup market consistslargely of hard fights over niches and segments, plus theconstant threat that, if you begin to do well, Campbell willnotice and bring all its strength to bear.

Campbell Seeks Ways To Maintain Its Strength

The problems and strengths of Campbell Soup were summedup 30 years ago, when Andy Warhol made his famous CampbellSoup Can paintings and sculptures. The cans had becomeAmerican icons and as such they were king of the mountain,but they only had one direction to go: down. Compared withmany other retail icons of the 1960s, Campbell Soup has doneextremely well in maintaining its position, although therehas been some slippage of market share in the past decade.Recently, Campbell has stabilized its general position. Inthe previous Packaged Facts report on the soup market,

Campbell Soup was listed as having 60.3% of the total soupmarket's 1993 retail sales, whereas in this report themarket share for 1995 is placed at 59.6%, an 0.7 pointdecline over two years. Campbell has kept this erosionsmall by maintaining steady sales in the broth/bouilloncategory and even making some small progress in the cannedsoup category; however, it has suffered badly in the drysoup category. The previous report calculated Campbell'sshare in 1993 at 12.9% of that category, but that figure hasdropped to 9.6% in 1995. Campbell has been active in thedry soup category since the early 1980s, but clearly thecategory has become its most exposed flank.

Campbell Focuses on Its Core Business

One potential business strategy would be for CampbellSoup to shift attention to its other food markets. Afterall, besides soups, Campbell sells a wide array of foodproducts, including juices, gravies, pasta, meat, andvegetables; frozen foods such as dinners, breakfasts,entrees, garlic breads and rolls, sandwiches, meat pies,seafood, vegetables, and pastries and cakes; pickles,olives, peppers and relishes; fresh bread and rolls;croutons and stuffing; cookies, crackers, and snacks;refrigerated foods such as salads, antipasto, saladdressings, cheese spreads and dips, sauces, desserts andentrees; vinegar, vegetable oils, mayonnaise, and mustard;beverage and dessert mixes; sauces, including salsa,picante, pasta, and barbecue sauces; nuts; pƒtes; chocolatesand other confectionery items; bubble gum; fish; poultry;and fresh mushrooms. However, Campbell has decided that, as it hasadvertised for years, soup is its "middle name," and thecompany's credibility rests on the credibility of its famoussoup. In late 1995, The New York Times reported that "justas AT&T returned to seeing its future in long-distance phoneservice, the (Campbell Soup) Company is refocusing on itscore business," soup. It has developed a three-prongedstrategy: Promote the soup category as a whole; create amarketing breakthrough in its classic canned soup position;and step lively in the world of dry soups.

Competitive Situation: Campbell (2/2)

Promote the Soup Category

Part of the Campbell approach is to make soup itselfseem more contemporary, more of a product for the 1990srather than a traditional part of a basic meal. Forexample, it has been promoting the idea of using soup as aningredient in the recipes for other foods. Conventional wisdom holds that the soup market reachedmaturity long ago and further growth depends ondemographics; however, there are situations where changescould lead to a larger soup market. Besides eating awayfrom home, the market could grow if one or more marketersfound a way to increase summer consumption or to strengthen

the category in regions beyond the Midwest. Campbell'sefforts to enlarge the entire soup market will, of course,help Campbell as the market's dominant presence, but itshould also help other soup marketers ride the growthcoattails.

Breakthrough in Canned Soup

Campbell has done an impressive job in building on theicon status of its canned soup. It has tried to be newenough to get noticed, without abandoning its traditionalstrengths. Recently, it has changed its labels, notcompletely abandoning the traditional red-and-white lookmemorialized by Warhol, but updating them. And it haschanged some of the formulas for its classic soups. The soup labels continue to be red and white. Theclassic slogan, "M'm-m'm good" on the package now reads "M'm-m'm better," and photographs have been appearing on most ofits condensed soup cans showing a bright, color picture ofwhat is inside the can. The labels for the classic tomatoand mushroom soup varieties have been only slightlymodified. Meanwhile, the ingredients in the soup can have beenchanged to promote the idea of improved quality. Thesechanges are the reality behind the change in the slogan from"good" to "better." Most notably, at the start of 1996,Campbell increased the amount of meat in its chicken soup byone-third. It has also brought out more reduced-fat soups,and introduced new varieties in many of its lines, notablyin concentrated soups, Home Cookin' soups, Healthy Requestsoups, and Swanson broth.

Stepping Lively Among Dry Soups

The biggest challenge to Campbell's position is comingfrom the dry soup segment. Many small marketers are seeingstrong growth in this segment, and Campbell has not beenable to compete with the energy it has shown among cannedsoups. But in 1995, it began testing its Soupsations line,a cross between liquid and dry soups. The liquid portion ofthe product is the concentrated soup stock; the dry is thegarnish (rice, beans, and the like). The idea is to bringCampbell's recognized strength in canned soups to bear inthe dry soup products as well. The soup is presented as avalue-added dry soup, and illustrates the kind of innovationand credibility Campbell enjoys as it competes to retainmarket share.

Competitive Situation: Other Canned Soup Marketers (1/2)

Quality and Price Are Chief Factors for Other Canned SoupMarketers

Campbell's leading rivals among canned soup marketersput the accent on quality, but compete on price as well.Figure 2-9 shows price competition among selected brands ofcanned soup. The price indicated for a particular brand is

the average price per pound for all the soups sold underthat brand (computed by dividing dollar sales by poundvolume). Prices vary both from store to store and soupvariety to soup variety, yet the figure establishes a cleardifference in the ranges at which brands compete. Thefigure includes an area defined by dotted lines indicatingthe average price range for a pound of soup. This area wascomputed by dividing the canned soup segment's retail salesby its volume, and then giving a range of plus or minus 25%.Based on these calculations, the average price of a pound ofsoup in 1995 was $1.16 and the average range spreads from$0.87 to $1.45. The graph shows only one brand below average in price,Campbell's condensed soups. This claim might seemparadoxical, but of course most brands are not on the graphand most small marketers compete by offering a lower pricedproduct. And of course, Campbell's condensed represents alarge share of the market. To succeed with a higher pricedproduct, marketers must establish a strong claim to quality.

Progresso Relaunches Soup and Quality Image

Progresso brand soups have long been positioned as thequality alternative to the Campbell's brand, but they havefaced growing competition from ConAgra's Healthy Choice lineof soups and Campbell's own increased attention to the issueof quality. Figure 2-9 shows that Progresso also competesby staying within the average price range and being only abit more expensive than Campbell's condensed, enough of adifference to assert superior quality without being sodifferent as to risk sticker shock. Progresso soups are notcondensed, and say on the label, "Ready to serve. Do notadd water." With the 1995 purchase of Progresso by the British foodmerchant Grand Metropolitan, the new owners have relaunchedthe entire Progresso brand, soups included. The New YorkTimes reported that Grand Metropolitan felt the Progressobrand had been "undernourished" and needed to recoup marketattention. The cans have been given a new label thatretains the brand name's traditional azure blue background,but the azure is now gradated, and a quality seal is ondisplay as well. The idea is to create an eye-catching,high-quality image. The contents of the cans have also been strengthened.Originally, Progresso stressed quality vegetable soups, butit now includes meats, and has a line of Progresso Pastasoups. It has launched 100%-white-meat chicken soups, andclaims that tests indicate white meat is "healthier." Theall-white-meat launch began in October 1995 and, accordingto Brandweek, was followed by a 50% boost in sales duringthe launch's first quarter.

Competitive Situation: Other Canned Soup Marketers (2/2)

ConAgra Fights Progresso for Quality-Minded Niche

Although Campbell's is Progresso's obvious competitor,its fiercest rival may be ConAgra's Healthy Choice line,which aims at Progresso's niche, quality-minded consumerswho are willing to spend more. During the early 1990s,Progresso was not as attentive to beating back thischallenge as it might have been, and now faces pressure froma strong upstart. Figure 2-9 shows that ConAgra's average price issignificantly above both the Campbell's Condensed andProgresso prices. Indeed, the typical can of Healthy Choiceis priced outside the average price range for canned soups.That price indicates marketing is directed toward upscaleconsumers. The brand name, Healthy Choice, indicates thehook for attracting those consumers: a specific claim to behealth-oriented. Its offering of canned soup in ready-to-serve forms also gives it a contemporary feel and helpsjustify the higher price. Healthy Choice is marketed through ConAgra's Hunt-Wesson division and the brand includes 17 soups. Sales in1995 grew by almost 20%. Some of that probably came atProgresso's expense, but even more appears to have come fromHealth Valley's sales, which has not been able to competewith this energetic giant. ConAgra scored big with theintroduction of Healthy Choice New England Clam Chowder,which quickly became the fastest-moving ready-to-serve soupvariety. Sold as a healthy, cream soup that is a low-fatalternative to traditional cream soups, it quickly caught onwith consumers. Healthy Choice soups typically have 1 to 2 grams offat, 450 to 480 milligrams of sodium, and 80 calories. Theimpact of the brand is visible in the rise of Campbell'sHealthy Request line and the Progresso Healthy Classicsline. The competitive excitement among canned soups is inthis area of rich-tasting, nutritionally preferableproducts.

Competitive Situation: Dry Soup Marketers (1/2)

Dry Soup Competition Rests on Strong Flavor and ConsumerEase

Easy-to-make soups have long been the basic appeal ofdry soups. They can be made quickly at home or in theoffice snack room. The busy activity among the many smallmarketers in this segment comes from the increased varietyof flavors. Price competition in this segment is very odd, asFigure 2-10 shows. The range of prices per pound is sobroad as to defy all reason, and suggests that consumers donot use price per pound when making their shoppingcomparisons. Packaged Facts conducted its own examinationof prices in supermarkets in the New York City area, andconcluded that competition might be more reasonably measuredin terms of price per packet or price per serving. Theprices in Table 2-16 are not as accurate as those in thegraph, which are derived from IRI data, but the table gives

a stronger sense of how the brands compete in terms ofprice. The servings figure comes off the package and isincluded in the "nutrition facts" section of the label. Theprice per pound is displayed on the store shelf and isreadily available to consumers if they care to take it intoaccount. The per package price reflects New York City storeprices. The per serving differences suggest threecommonsense price groups: quality prices, ranging from 63cents to 80 cents per serving; average prices, ranging from26 cents to 35 cents per serving; and a low price of 13cents per serving.

Lipton Increases Its Lead With Focus On Recipes

Lipton's long line of dry soups accounts for a quarterof the dry soup market, and its share of the market grew bya percentage point in 1995. It is not as high a mountain asCampbell is among canned soups, but it is strong and hasshown a good resilience during the 1990s, when a lessdetermined company might have seen its glory days slip. In1990, the Total Research Corp. reported that a survey ofconsumer attitudes toward brands suggested that Lipton Souphad the "classic profile of a declining brand high inprominence, average in perceived quality, low in usersatisfaction." However, instead of standing pat, Liptonbecame innovative. Most notably, it built on its leadingdry soup, Lipton Onion Soup Mix, by expanding the line andrenaming it Lipton Recipe Secrets. During the early 1990s,it withstood the pressures from the Japanese innovations,and in mid-decade has stood up to the smaller companies'challenges too. It has built on a strategy of averageprices and traditional meals.

Competitive Situation: Dry Soup Marketers (2/2)

Lipton prices are in the midrange. Table 2-16 suggeststhat Lipton defines the average per serving price of drysoup. Other makers can generally be described as being abit below Lipton (Nissin, for example) or above Lipton, aswith Knorr. Lipton sets the standard. Although Lipton does offer instant soups, its biggestsales and marketing support is for its cooking soups likeRecipe Secrets. Although this kind of soup flies in theface of the much-publicized 1990s life-style, in whicheveryone is on the go and eats on the go, Lipton aims at thetraditional market of families that sit down together andeat together. A Lipton-sponsored survey reported in thespring of 1996 that a majority of American families stilleat together at least five nights a week, and 93% ofrespondents said they consider eating together as a familyto be very important. By aiming at this market, Lipton hasa strategy of marketing to the mainstream rather than to aniche.

West Coast Marketers Aim at High Flavor and Low Sodium

Among dry soups, an area of rapid growth and interestis cup soups that advertise "just add water." They combinelow fat and low sodium with high flavor. West Coast-basedmarketers have been especially energetic in marketing thisapproach. Good examples are Fantastic Foods from Petaluma,CA, Spice Hunter of San Luis Obispo, CA, and Nile Spice ofKirkland, WA. Fantastic Foods has a line called Only A Pinch that hasonly 120 milligrams of sodium per serving, less than 10% ofthe sodium in Campbell or Nissin products. It also keepsits fat content down by serving soups rich in lentils, brownrice, beans, and other hearty grains. In 1995, it alsointroduced a line of health-oriented ramens, made fromsteamed, not fried, noodles, with a much lower fat contentthan traditional ramens. Nile Hunter has several lines and stresses flavor. ItsQuick & Natural soups have brown and wild rice, lentils,broccoli, and other hearty vegetables. Its Oriental NoodleSoups stress exotic flavors, commonly mixes of sesame andgarlic, with less-familiar tastes added in. Nile Spice has been bought by Quaker Oats and has addedsome national marketing strategy to its West Coast flavorand nutrition strategy. Nile Spice keeps sodium and fatlow, while offering a wide variety of flavors packaged incolorful cups. Quaker Oats added a level of pricecompetition that produced immediate gains. Sales grew by14% in 1995, by far the fastest rate of increase for leadingdry soup marketers.

Marketing Trends (1/2)

Marketing Trends

Use Soup as Seasoning

The most obvious marketing trend is in persuadingconsumers to use soup as seasoning. The extensive use ofrecipes in advertising has gotten people accustomed to theidea of using soup as an ingredient in a non-soup dish. Atypical recipe is one issued by Lipton in the spring of 1996for grilled-vegetable sandwiches. It builds on the familiarsoup and salad idea. Salad vegetables are mixed and stirredwith the contents of a Lipton onion soup mix or some otherRecipe Secrets mix. The salad is then grilled or broileduntil the vegetables are tender. The mix is then placedinside pockets of pita bread. The result is a product thatcombines soup, salad, and sandwich into one food. Not to be outdone, Campbell has developed a series ofrecipes using canned soup. This approach suggests a way tobreak through the soup season barrier to increase soupconsumption during even the hottest summer months. Soup-as-ingredient recipes appear in ads, on labels, and also in thefood sections of newspapers, many of which are happy toaccept the free recipes distributed by the marketers' publicrelations offices.

Microwaveable Makes a Come Back

In the last Packaged Facts report the microwaveablesoup appeared to have failed and was disappearing; however,it has made a return. The secret has been a change in theway microwaveable soups are understood. Initially, theywere ready-to-serve soups that were packaged in microwave-safe containers like polystyrene cups. They were designedto be heated and eaten directly from the package. Now theidea is to add water that has been heated in a microwave oron a stove top and let the soup brew in its cup. The changereflects designs that make it easy to hold a paper cup fullof hot soup. Canned, ready-to-serve soups are also labeledas microwaveable. The instructions say to first pour thesoup from the can into a microwave-safe dish.

Marketing Trends (2/2)

Health Trend Continues and Now Includes Reformulations

The leading marketing trend in the 1990s has been anaccent on healthy soups. Generally that means low-fat,higher-fiber, low-salt soups that are rich in vegetables.Beans, broccoli, and pasta are becoming standard parts ofnew variety introductions. The health trend has acceleratedin the mid-1990s, and now includes reformulations of sometraditional successes. Progresso has reformulated itschicken soup to use only white meat, while Campbell hasdeveloped a low-fat ramen noodle. The counterpressures tothis trend come from the fact that people like the taste offat and salt, but even traditionally tasty and fatty creamsoups are being reformulated to produce less fat. ConAgrahas brought out a Healthy Choice cream of mushroom and acream of vegetable with chicken. Campbell has reformulatedits chicken soup to contain one-third more chicken, a changethat may accent flavor and satisfaction more than health.

Exotic Flavors Support Health Trend

Upscale specialty soups, ethnic soups, and moreseasoned formulations are all part of a trend to appeal toconsumers' taste buds without disturbing their interest inhealth. Fantastic Foods has built its growth in the soupmarket on the mixing of flavors and health in theirmarketing, but many other companies are aiming at spices andhighly seasoned soups as well. Mexican-inspired soups seemespecially well suited to this trend. Campbell introduced aFiesta line under its Home Cookin' brand that includes extra-spicy Fiesta tomato, Fiesta nacho cheese, and Fiesta chilibeef with beans. It also introduced a Mexican pepper beansoup into the Southwest and added a "Southwest vegetable"(black beans and rice) soup to its Healthy Request brand. Anumber of small soup makers also brought Mexican-inspiredsoups onto the market: e.g., Sierra Spice launched Sopa de

Vaquero (cowboy soup of pinto beans), Desert Gardens Chili &Spice introduced Southwestern Pasta and Mexican Bean drysoups, and Arrowhead Mills has a Fiesta soup mix.

Product Trends (1/2)

Product Trends

Flavor Still Inspires Products

The soup market has been shaped for many years by aninterest in developing easy-to-make soups. Instant soups,ramens, and ready-to-serve canned soup all reflect thisenduring trend. The health market is a second trend, and is subordinateto the interest in ease. That dependence is bestillustrated by the growth of ConAgra's Healthy Choice brand.It was the introduction of the ready-to-serve lines thatmade the brand an important figure in the soup market. Manylow-sodium and low-fat soups continue to join the productlist. Important as the health trend is to marketing, however,the population's percentage of overweight consumerscontinues to rise, and exercise is more honored thanperformed. Thus, we see a continuing stream of classic soupvarieties e.g., chicken noodle, vegetable beef, potato, andcreamy seafood chowders coming into the market. Theirappeal is in their taste. Salt and fat are low on thehealth benefits, but they taste great.

Beans Add Fiber and Bulk

Soups with beans added have been a strong formulathroughout the 1990s, and continue to be strong. They werean important part of the Campbell Soupsations launch.Barley and 7 Beans, 18 Bean, Black Bean, Four Beans andMore, Mexican Bean Burrito, Navy Bean, Pinto Beans, andWhite Bean are just some of the bean soups introducedrecently. Their fiber allows them to be advertised ashealthy.

Product Trends (2/2)

Couscous Replacing Rice in Some Soups

Couscous, a fine-grained pasta, is familiar toMediterranean cuisines and is now being added to Americansoups. It serves the same function that rice hastraditionally served in soup formulations: adding bulk and amild flavor. Unlike beans, couscous is less rich in fiber.Fantastic Foods rolled out a group of soups with couscous inthem, as has Health Valley Nature Foods, Natural Value,Sahara Natural Foods, and San Francisco Spice. Couscous hasbeen mixed with black beans, cheddar cheese, corn, lentils,spicy beans, and garden vegetables.

Regional Flavors Are Popular

American regional soups are popular. Creole-stylesoups are popular, and New England seafood soups are stillbeing introduced by various marketers. The Purely Americancompany has launched a St. Augustine Spanish Soup, namedafter St. Augustine FL. Campbell has launched some AmericanRecipes soups. The Santa Fe name has become especiallypopular with Santa Fe-style bean soup (sometimes rice andbeans) being introduced by Campbell in its Soupsations line,Natural Value, Next Generation Foods, Sahara Natural Foods,and W.J. Clark.

Standards Being Reformulated

The standard soups are being reformulated to reflectthe continuing interest in health with strong flavor. Asnoted, Campbell has increased the amount of chicken in itsclassic chicken soup. It has also developed reduced-fatcream soups for its cream of mushroom, cream of chicken, andcream of celery soups. Campbell has also developed a low-fat (unfried) noodle for its ramens. Fantastic Foods toohas developed a steamed ramen noodle. Meanwhile, Progresso has launched an all-white meatformula for its chicken soup.

Advertising Activity (1/3)

Advertising Activity

Largest Marketers Use Television

Although many marketers advertise their soups inmagazines and newspapers, television advertising isgenerally limited to the largest marketers, and even theytend to prefer spot and cable advertising to networkadvertising. Campbell, by far the largest advertiser, doesadvertise on the networks, as does ConAgra for HealthyChoice, and Unilever for Lipton. The makers of Progresso,however, prefer spot and cable TV. Spot television allows regional marketers to promotethemselves, but only a few take advantage of theopportunity. Goya Foods, for example, has a large line ofproducts aimed at the Hispanic market and includes spottelevision ads for its soup.

Print Media Are Preferred by Most Advertisers

Print media, especially magazines, are the preferredadvertising outlets. The large marketers include magazinepurchases in their budget, and most of the smaller onesrestrict themselves to print. Besides being less expensive,in absolute terms, print media allow the use of recipes,

which have become so important in promoting soup sales.They also allow the inclusion of coupons as promotionaldevices.

Some Radio Advertising Is also Used

Some soup advertising appears on radio. FantasticFoods, for example, used radio in northern California tosupport its vegetarian soups and meal-cups. As is often thecase with radio advertising, the spots took a humorousapproach to promote the product. The most adventurous radio advertising comes fromCampbell Soup, which has a system of buying radio time whenstorms break out. The stations and ads are chosen inadvance. But the spots are only purchased when weatherconditions seem right.

Biggest Soups on the World Wide Web

Campbell, Progresso, and Lipton soup information isavailable to browsers on the Internet. The "homepages" ofthe marketers of these brands tend to be basic and onlymoderately informative, but their presence has begun.Typically, these sites allow browsers to get recipes forsoup meals and information about the products. They alsohave information about promotional events. Campbell Soup (at http://www.campbellsoups.com) has themost soup oriented of the pages. Its homepage uses theCampbell red-and-white label design. Connections linkbrowsers to information about what is new, recipes, menuplanning, and facts about the company. It also has a wayfor people to e-mail questions to Campbell and a "Campbell'sTreasures" page, where browsers can order promotional itemslike a "souper" teddy bear. The Lipton Website (http://www.lipton.com) pays moreattention to tea than to soup, but it too offers souprecipes. Progresso information is part of the Pillsbury web site(http://www.pillsbury.com) that is devoted more to bakingand the general Pillsbury line. The Progresso page listsinformation about the soups and other Progresso brandproducts.

Advertising Activity (2/3)

Campbell Reorganizes Its Advertising

Campbell Soup created an independent media unit calledCampbell Media Alliance to handle its advertising. The unithandles both the advertising planning and media buying. Itscreation marks the first time a large company has placed allits planning and buying under one roof. The new system,introduced at the very start of 1995, replaced six separateadvertising accounts. Advertising for Campbell soups wasscheduled to increase by as much as 40%. The Wall Street

Journal reported that the increase would make the red-and-white label soups the "most promoted food products insupermarkets."

M'm! M'm! Good! Replaced

The new system quickly made itself visible with aradical change. Since the 1950s, Campbell has used aslogan, M'm! M'm! Good! There have been times when theslogan was shelved, but it would always reappear and was oneof the best known of America's advertising phrases. InSeptember 1995, the phrase was boosted to M'm! M'm! Better!The full slogan says, "Campbell Makes Everything M'm! M'm!Better!" The change does more than simply go up the comparativescale from good to better. The m'm m'm good slogan wasabout the soup itself. The new slogan is about how the soupimproves the whole meal. In short, it is a switch from aslogan about the product's identity (good) to a slogan aboutthe product's positioning (making things better). It isdifficult to imagine that a positioning slogan will endurefor over 40 years, as the old one did, but it is alsodifficult to retreat from better back to good. Thus,Campbell may have introduced a change that will lead tochanges in its public identity.

Chunky Advertising Increases by a Third

As part of the new advertising program, the budget forCampbell's Chunky brand of soup was increased by a third, tothe $10 million to $15 million range, said The New YorkTimes. The soup created advertising characters called theChunky Guys, men with thick necks and big appetites topromote "the soup that eats like a meal."

Swanson Is Positioned as Butter Replacement

Campbell Soup's Swanson brand of broth has beenpositioned as an alternative to butter or oil. Aspokesperson told Food Processing magazine that, "Swansonbroth could put butter out of business." The use of brothin cooking or seasoning seems like a bold idea, and Swansonadvertising urges consumers to "walk on the wild side."

Celebrity Endorsements Teamed with Soup Season

Campbell likes to use celebrity figures whoseendorsements will match the soup season. Thus, it has hiredhockey great Wayne Gretzky as a spokesman for Chunky brandsoups and figure skating champion Nancy Kerrigan to promoteits classic red-and-white line.

Campbell Print Ads Feature Recipes

Campbell print advertising often includes recipes withphotographs of the finished product. The striking element

of the ads is that they are soup ads without pictures ofsoups. For example, one ad is headlined "Campbell's OneDish Wonder" and shows a picture of chicken and rice.Beneath the photo is a recipe for "Campbell's One DishChicken and Rice Bake." The bottom of the page carries thetag line, "Campbell's Makes Everything M'm! M'm! Better!,"illustrating how the new Campbell slogan works to define theproduct's effect on other things. Another ad, with a very similar recipe, uses stuffinginstead of rice and shows Pepperidge Farm stuffing beside acan of Campbell's cream of mushroom soup.

Advertising Activity (3/3)

Campbell's TV Commercials Use Good Food Images

On television Campbell likes to show foods that make aviewer feel hungry. One series of ads looks at "how to getto ..." some part of America such as the Southwest orCalifornia. The "How to get to the Southwest" ad uses awoman announcer, who says that the way to get to theSouthwest is to "go through rows of corn, turn right at thecactus," and the television shows a display of corn in asupermarket, and then cuts to an image of cans of Campbell'sSouthwest Style Chicken Vegetable soup. The picture shows asoup bowl, while the announcer describes, "Deliciouschicken, beans, rice all in a zesty broth, Southwest style."A chorus sings "M'm! M'm! Better!" The cuts from imagesof fresh food to soup cans serve to link soup and good food.

Lipton Stresses Recipes in Both Print and Television

Lipton Recipe Secrets advertising makes strong use ofboth parts of the brand, "recipe" and "secrets." A typicalad is half a page, shows a food such as lemon-twist chicken,and gives a recipe for preparing it. Beside the recipe is apicture of a Lipton Recipe Secrets box. The slogan reads,"Lipton Recipe Secrets. The Secret Good Cooks Know." Television advertising cannot give recipes so easily,but Lipton still gets the idea across in an entertainingway. One ad, for example, begins with a series of shotsthat appear to be cooking shows. An announcer says,"Welcome to Cooking with Gina." The image cuts, as thoughthe channel had been changed, and a man is in a kitchen asan announcer says, "Cooking with Simon." Cut, as though toa third channel, and up pops Kim, a Korean wearing a chef'shat and speaking in Korean. A voice comes on and asks, inEnglish, "Want some real advice?" and begins showing aLipton Recipe Secrets box. The commercial also shows thebox's contents, soup packages with recipes printed right onthe packets. The announcer says, "Get your recipes andseasonings all in one place." The tag line is, "LiptonRecipe Secrets, that's all you need to know."

Progresso Advertising Uses "Totally Delicious, Totally

Progresso" Line

Progresso advertising is focused on flavor. A typicalmagazine advertisement may show a bowl of pasta soupphotographed from directly above so that it looks round,colorful, and thick. Cans of soup are shown in a casualdisplay. Instead of being formally arranged in a line, theyappear to be falling or bouncing, and are together but notordered. The arrangement gives the ad an artistic, relaxedlook. There is not much text, but what there is, stressesflavor. Above the image a headline says, "Progresso PastaSoups, a Great Twist to Ordinary Flat Noodles!" while belowis the current slogan, "Totally Delicious, TotallyProgresso." That slogan appears in television advertising as well.In the ad used to launch the 100%-white-meat chicken soups,for example, the close-out tag was "to enjoy chicken soup,that's totally delicious, totally Progresso." The ad itselfalso stresses flavor. It reports how Progresso has"reinvented" chicken soup by using all white meat. All thedescriptions of white meat's benefits stress their sensorydelights: "tender, luscious ... enticing flavor ...distinctive taste."

Consumer Promotions

Consumer Promotions

Coupons Are Most Popular Promotions

Cents-off coupons are the most popular promotions forsoups. The coupons are regularly found in magazines and innewspaper freestanding inserts (FSIs). The coupons may beissued by marketers or by stores themselves as part of in-store promotions. Manufacturers' coupons can also be included on aproduct label or in a package as part of a strategy toencourage repeat business. Coupons are also distributedthrough mailings to consumers.

Coupon Promotions Take Advantage of Computers

Soup marketers also use computerized cash registers togenerate coupons on the back of the register tape. Theregister may be programmed to issue a coupon whenever thescanner detects the purchase of a specific item. Thecomputer may be programmed to print one particular soupcoupon when the scanner detects purchase of a rival soupbrand, or it may issue a soup coupon when a customer buys aluncheon meat or crackers that might go well with soup.

Most Coupons Are for Relatively Small Sums

Soup is an inexpensive product, so a 25-cent discountmay amount to more than a 25% discount. If the supermarketdoubles the manufacturer's coupon (as some do), that wouldbe over a 50% discount. Generally, marketers prefer smaller

discounts, but a rule of thumb says that customers will notbother to use a coupon that is worth less than a quarter.One solution is to offer coupons for multiple purchases.For example, Campbell offered a magazine coupon thatprovided 30 cents off on the purchase of any three cans ofcream-variety condensed soup. Campbell expected muchgreater interest in the coupon (and attached recipe) than a10 cent discount on one can could have brought.

Coupons for Items That Go with Soup

Another way to use coupons is to promote something thatgoes with soup. Campbell, for example, had a promotion thatlinked its soup and its Pepperidge Farm bread lines. Itoffered an in-store coupon giving a free loaf of PepperidgeFarm bread with the purchase of six cans of soup.

Recipe Books Make a Popular Promotion

Recipe books suggesting a variety of ways to use soupare a popular promotion. For example, as part of thebrand's relaunch in 1996, Progresso offered a high-qualitydatebook with recipes inside it.

Sporting Events Sponsored

Both Lipton and Campbell sponsor touring sportingevents. Lipton has associated its name with NASCAR races,while Campbell sponsored a figure ice-skating tour acrossthe country in the spring of 1996.

Packaging and Labeling (1/2)

Packaging and Labeling

Basics of Labeling Use Bright Colors and Enticing Photos

Although there are a variety of soup labels, the basicidea uses bright, readily recognizable colors, along withappetizing photos of the package contents. Some photosstress the ingredients, perhaps even showing them beforethey have been turned into soup. Other pictures show thesoup itself. Dehydrated soups usually come in larger-facedpackages than canned soups and, thus, allow for a bigger,more appetizing picture. Bouillon cubes often come in smallpackages and allow for only a basic design of bright colorsand clearly readable label. Recipes have become a standarditem on many labels.

Campbell Revised Its Label

Campbell's red- and white-label was introduced in 1898,and is among the most famous designs in commercial art

history. Eye-catching and functional, it also serves a rolein connecting consumers to the brand. No matter how oldthey may be, consumers have seen the label on food storeshelves their entire lives. Thus, any change to the labelrisks a negative consumer reaction; nevertheless, in 1994,Campbell revised the label slightly, adding a color photo tothe center of the label, showing what is inside. On theback of the can a recipe panel has been added. Campbell hasbeen especially careful with its standard-bearer varietiesand has hardly changed the label on the tomato and mushroomsoup cans at all. During the introductory period of the newcans, they carried a burst reading, "New Look, Same GreatSoup." New varieties allow for more freedom in labeling. Acream of Mexican pepper soup introduced into the Southwestin 1995 carried dual-language labeling.

Packaging and Labeling (2/2)

Progresso Relaunch Includes Labeling Upgrade

As part of its effort to create new excitement over theProgresso brand, Grand Metropolitan has redesigned theProgresso label. Like Campbell, it has worked within thelabel's tradition. Originally the label was blue, carried aphoto, and put the brand name in an azure banner. The photoquality on the label has been enhanced, and the banner'sbackground azure has been given a graded look. A qualityseal has been added as well. Jonathan Asher, strategicdirector for the Coleman Group that redesigned the label,told Brandweek, "Now they've got a look that matches thequality of the product, rather than this industrial-lookingoilcan thing."

Cup Packages Becoming Strong

Although the name Lipton Cup-A-Soup refers to a cup,the package itself is a sealed foil pack. The user providesthe cup. Nissin introduced a packaging revolution when itscup of instant soup included the cup. Knorr brands ofdehydrated soup have followed suit, introducing a "cook-in-package" line that comes in a double-wrapped paperboard cup. An inherent problem of drinking hot soup from a papercup is the tendency of paper to become too hot to handle.Knorr uses "steel-rule" scoring on the outer wrap to enableconsumers to hold the cup comfortably. Some manufacturersuse Styrofoam cups. The cups themselves can be made to be attractive. Thesoup cups from Fantastic Foods, for instance, are brightlycolored.

Nutrition Facts Panel Reinforces Health Labeling

The "Nutrition Facts" panel, required by law on everysoup package sold at retail, reinforces a trend to identify

low-fat and low-sodium content with bursts and other eye-catching designs. The panels make comparison-shoppingeasier, and the bursts remind consumers about these issues.Perhaps encouraged by this labeling environment, the claimsabout health have been increasing on labels.

IV. DISTRIBUTION AND RETAIL

Distribution

Distribution

Most Distribution Is Standard

Soup usually travels through the same distributionchannels as most other food products. Major marketers sellsoup directly to large supermarket chains and warehouseclubs, and may sell to smaller stores through brokers ordistributors. Many regional marketers also sell directly tosupermarket chains, but wholesalers usually handle low-volume, higher-margin gourmet soups. A small number ofgourmet soups are sold through mail-order catalogs.

Campbell Restructures Its Distribution System

In 1995, Campbell Soup restructured its system fordistributing soup, introducing a "just in time" method thatsends soups directly to stores as they are needed. Thesystem depends on a computerized inventory process thatallows Campbell to keep better track of demand. It avoidsthe traditional backup of product that forces stores tostock large supplies of soup cases in their warehouses. Italso allows the company to link manufacture and distributionrates more precisely, so that product goes out as salescreate a demand for it. According to The New York Times,the system cost $50 million to develop.

Small Outlets Use Local Distributors

Although soup sales are overwhelmingly through groceryretailers, some non-grocery outlets do sell soups,especially dried and bouillon forms. Food supplies forthese outlets come from local distributors, so-called store-door distributors. These distributors usually carry severalproduct lines and are responsible for stocking, pricing, andmaintaining certain sections of shelf space in the retailoutlet. The distributor and the retailer share the proceedsthrough some type of contractual agreement. Store-doordistributors are a

primary distribution channel for imported and gourmet soups.They allow the retailer to offer a broader selection of

products without having to deal with a like number ofvendors.

Retail Outlets: Supermarkets; Outlet Shares

Retail Outlets

Supermarkets Account for 74% of Sales

Supermarkets, defined as grocery stores with more than$2 million in annual sales, accounted for 74% of soup sales,measured in 1994 retail dollars. Smaller grocery storesaccounted for another 22% of sales, so that the combinedgrocery share of the market came to 96%. Although there wassome variation in sales share according to type of soup,grocery stores dominated in every category. The largestmarket share among non-grocery outlets was for the sale ofbouillon cubes, but grocery outlets still accounted for 93%of bouillon cube sales. See Figure 2-11.

Outlet Shares Remain Stable over Many Years

Market shares for the various retail outlets haveremained stable for many years. Table 2-18 shows the changein market share between 1990 and 1994. If any trend isvisible at all, it is that the bigger retailers have beengaining slightly at the expense of the smaller, non-grocerystores. This trend was promoted by the strength of thegrocery outlets as vendors of canned soup. Dry mixes andbouillon cubes have seen some growth in non-grocery sales.But all of these trends were very slight. Essentially, theretailer share has been steady throughout the 1990s,unaffected either by the recession of the early part of thedecade or the recovery that followed.

Retail Outlets: Non-Grocery

Non-Grocery Outlets Remain Small

As soup providers, non-grocery outlets have remainedsmall and relatively unimportant. Warehouse clubs, drugstores, discount stores, and gourmet outlets have not beenable to grow much during the 1990s, thanks to variouspeculiarities of the soup market.

Warehouse Clubs Blocked by Soup's Variety

Warehouse clubs are high-volume, low-margin retailoutlets that specialize in bulk sales to members. Althoughthe clubs have taken sales of many food items away fromsupermarkets, they have not had much impact on the soupmarket. Soup comes in such a great variety of flavors, andwhen customers buy a number of cans or boxes of soup they

tend to select a number of different varieties. Thispurchasing style makes it difficult to sell soup in bulk atthe retail level. Warehouse clubs have had little impact onthe structure of retail soup sales.

Drugstore Soups Have Not Grown

Drugstores do sell some dehydrated and ready-to-servecanned soups. Although the growth of drug chains asconvenience-oriented, long-hour outlets gave them a toeholdin the soup market, they have not been able to extend theirposition beyond 1% or 2% of soup sales.

Discounters Barely Present in Market

Discounters and mass merchandisers usually maintainsmall food sections as well as clothing and consumer goodsareas. Those stores that try to expand beyond sweets andsnacks do carry soup, particularly instant and microwaveableforms of soup, but they have not become serious figures inthe market. Trade sources estimate that discounters areresponsible for only a few 10ths of a percent in soup marketsales. The basic difficulty is that, while soups are easyto prepare, when compared with other mealtime foods, theyare not as convenient as snacks for immediate eating. Soupsare bought during regular food-shopping outings rather thanas pickups along with candy bars, milk, and bread.

Gourmet Outlets Hold a Few Percentage Points

Gourmet stores are able to sell dried and microwaveableforms of soup. Their standing as outlets where consumers doserious food shopping has enabled them to hold onto severalpercentage points of the soup market's retail sales. Theirbiggest problem is that most soups are not seen as special,gourmet treats.

Retail Outlets: Prices and Margins

Prices and Margins Vary Among Stores

Comparison studies of soup prices in supermarkets showa surprising unevenness of prices. Stores in which breads,cereals, milks, and sodas will be similarly priced turn outto have different prices for soups. This unevennesssuggests that stores do not believe they compete on theprice of soup. Stores also report that retail prices ofsoup rise 3% or 4% every summer, and customers do not seemto respond negatively.

Canned Soup Margins Average About 27%

Surveys of retail outlets indicate that margins canvary sharply from variety to variety, although the averagemargin is about 27%. A notable exception is canned tomatosoup, where margins can fall to under 10%. The low margins

and prices of tomato soup suggest that this variety is seenas the standard for competition. With so many varietiescarrying different prices, consumers cannot hope to have aready knowledge of every soup price, but they can keep trackof tomato soup prices and compare from store to store.Chicken noodle and chicken with rice soups also tend tocarry lower-than-average margins, although not as low astomato soup. Retailers generally earn larger margins onprivate-label soups.

Margins Higher on Healthy Lines of Canned Soup

Soups that emphasize their healthy quality tend to havehigher margins. Often these margins pass the 40% mark oreven 50% in a few stores. Margins on Healthy Choice soupsfrom ConAgra usually do not reach those heights, althoughthey stay above the 27% averaged by traditional canned soup. Margins on cans of broth tend to stay below 20%,although this varies with the brand. Dry soup margins tend to be higher than canned soupmargins, seldom dropping below 30%. Ramens provide most ofthe varieties in this segment, and their margins oftenapproach 40%, depending on how much a store purchases fromthe wholesaler. Margins on bouillon cubes are in the range, upper 20%,of the average can of soup.

Retail Outlets: Store Displays; Cross-Merchandising

Soup Aisles Are Standard Sight in Supermarkets

Supermarkets generally label one of their aisles withthe word "soup" and devote from one-third to one-half of thespace in that aisle to soups. Typically, 20 to 30 linearfeet will be devoted to canned soup and 5 to 15 linear feetto dehydrated soup. In the largest supermarkets, however,the soup section may be up to 100 feet long.

Condensed Canned Soups Dominate Displays

A typical supermarket will stock anywhere from 50 to100 different SKUs (stockkeeping units) of condensed cannedsoup and perhaps half that number of ready-to-serve soups.Figure 2-12 shows a typical canned soup display in asupermarket. Soups are displayed by brand, rather than by productsegment. So the condensed and ready-to-serve versions of asingle brand will be together on a shelf, although they arenormally sorted within the brand's own display. And becauseof the competitive structure of the soup market, one brandreceives the lion's share of the shelving, commonly half theshelf space or more. The other brands are displayed aroundthe leader, some to one side, some to the other. Broth brands tend to be on the lower shelves and to theside of the canned soup display. It is unusual for more

than 10 SKUs of broth to be visible on the shelves.

Dry Soup Displays Vary from Store to Store

Some stores display dried soups immediately adjacent tothe canned soups, but other retailers have moved instantsoup mixes into the dip mix and gravy sections. Non-instantdried soups are sometimes sold in the vegetable section.Dry soup displays tend to consume only a small amount ofshelf space, but pack a large assortment of flavors. Ramen noodle soups too may be found in a variety oflocations. The soup section is probably most common, butsome retailers have focused on the noodle part of the soupand placed them in the pasta section. Still others preferto display their ramens in an ethnic-foods section.

Soup Section Has Been Growing

The expansion of dried soups beyond the soup section,and the increase in flavors and styles of soup have led toan expansion of soup's shelf space. The constant additionof new SKUs generally puts pressure within the soup section,forcing out the less-productive items. Supermarket News hasreported that this competition has been costing dried soupsspace that has been turned over to cans of ready-to-servesoups. More slowly, but persistently, the soups are taking upmore store space, particularly as soups suddenly erupt outof the designated soup area and appear in other sections,where they begin competing for space on the pasta, gravy,ethnic, and vegetable shelves. When soup gains new space ina store, the change typically comes in the summer. Asstores prepare for the new soup season they often evaluatewhat soup SKUs are doing the best business, and base theirshelving decisions on that process.

Cross-Merchandising Makes Soups More Visible

Soups are becoming more visible in stores as they arecross-merchandised with other products. Common cross-merchandising displays include produce and soup. A classiclinkage, for example, takes broccoli and cheese soup anddisplays it with potatoes in the produce section. Another standard cross-merchandise puts soups andcrackers together.

V. THE CONSUMER

Consumer Use (General): Overview; Age Groups (1/2)

Consumer Use: General

General Market Appeals to All Consumer Types

Extensive consumer surveys undertaken by Simmons MarketResearch Bureau show that consumption patterns in the soupmarket are felt more on the edges of the market than at itscore. The heart of the soup market is in the purchase ofcanned soups and broths, and in that category, there isalmost no significant deviation from the national norm byany demographic type. In this report, "significant deviation from thenational norm" means that a demographic type, such as peoplein one particular age group or with a particular educationalbackground, deviate from the national average by more than10%. For example, if on average 50% of all principalshoppers use some form of soup, any deviation from this normwill be considered significant only if it is greater thanfive percentage points (10% of 50). So a group that has a56% incidence of use will be considered significantly aboveaverage in its consumption, while a group with a 44% ratewill be considered significantly lower. By this standard, there are no demographic groups inthe Simmons survey that are significantly more likely to buycans of soup or broth, and there is only one demographicgroup that is significantly less likely to buy. The ethniccategory listed as "other" (i.e., neither white nor black)buys significantly less canned soup than the country as awhole. For the most part, however, the major demographicvariations come elsewhere in the market. Particularlyimportant changes are reflected in the consumption of drysoup. Some groups are much heavier dry soup consumers thanothers. Another recurring variation in consumption concernsbroths. The overall Simmons data report consumption of soupand broth together; however, further analysis shows that thebulk of this consumption is for soup, not broth, and thereis considerable variation in broth consumption amongdemographic groups.

All Age Groups Buy Soup

Soup, in both canned and dried form, is purchased byconsumers of all ages at nearly the same rate. Figure 2-13compares the distribution of soup purchase by age cohortwith the general population. Each continuous line on thegraph shows the percentage of the general population ofprincipal shoppers that is found in each age group. Forexample, the graph shows that about 22% of the principalshoppers are between the ages of 25 and 34 years. The graphalso shows the age distribution for consumers of cannedsoups and broths. This line is hard to see because itmatches the main line so perfectly. It is indicated bytriangular points that, unusually, lie right with the pointsmarking the principal shoppers. For example, about 22% ofcanned soup and broth shoppers are aged 25 through 34. The

third line, marked by circular points, is easier to spot.It indicates consumers of dried soups and bouillons.Although it follows the other two lines closely, the matchis not quite exact. For example, the graph shows that about21% of dried soup shoppers are aged 25 through 34. The graph shows a few significant deviations among drysoup consumers. The youngest consumers represent asignificantly smaller share of dry soup users, while drysoup users are significantly over-represented among middle-aged shoppers, those 45 to 54. Generally, however, asshoppers come of age, they can be expected to buy soupsteadily throughout their working lives and on into theirretirement years. Deeper analysis does show, however, thatthe kinds of soups purchased does vary with age.

18- to 24-Year-Olds Do Not Like Adding Water

The most striking fact about 18- to 24-year-olds isthat more of them consume non-condensed canned soup thancondensed soup. All other age groups measured by Simmonshave more buyers of condensed soup. At the same time, thisage group is significantly underrepresented among dry soupbuyers. Dry soups and condensed soups share one commoncharacteristic, both require the addition of water. Youngerconsumers seem to prefer ready-to-serve products. They liketo heat and eat.

Consumer Use (General): Age Groups (2/2)

25- to 34-Year-Olds Are Typical Soup Consumers

The aversion to adding water disappears among consumerswho are only slightly older. Among principal shoppers aged25 to 34 years, condensed soup sells better than non-condensed canned soup, and dry soup consumption is normal aswell. Indeed, the only area in which members of this agegroup are significantly over-represented is among buyers ofNissin brand powdered soup. The group is notable, however,for its disinclination to buy broths. The percentage ofbroth consumers in this age group is significantly less thannormal. (Broth consumers are even less common among 18- to24-year-olds.)

35- to 44-Year-Olds Show Different Habits

Mid-life restiveness shows several changes in soupconsumption patterns. Dry soup consumption increasesdramatically, and attachment to the Campbell's branddeclines. Among younger consumers, Campbell's condensedsoup is preferred to other condensed soup brands by ratiosof about 5:1 and 4:1. For this age group, however, thepreference for Campbell's is just a bit over 2:1, stillstrong but much less so. Shoppers in this age group arealso significantly more likely to buy a non-Campbell'sinstant soup than are either younger shoppers or those over54.

45- to 54-Year Olds Turn to Broth

Shoppers younger than 45 are not very likely to buycanned broths, but this situation changes in middle age.This age group is the only one with a significantly highpercentage of broth consumers, and is also notable for itssignificantly large number of consumers of specific brothbrands. College Inn, Swanson, and Campbell's CondensedBroth all find a significantly high share of their market inthis age group. Dried bouillon, broths, and many dried soupbrands also find a significantly high portion of theirmarket among these middle-aged consumers.

55- to 64-Year Olds Want Quick Soups

Consumers in later middle age continue some trends seenbefore, such as a taste for broth. They also show acharacteristic seen among the youngest consumers in theirtaste for non-condensed forms of canned soup. They too showa significantly high tendency to buy heat-and-eat cannedsoups; however, unlike among the youngest consumers, thispattern does not suggest a dislike for the labor of addingwater. They show no great disinclination to buy powderedsoups; however, their immediate junior age groups showsignificantly higher dried soup consumption patterns, sothis return to normalcy may indicate a waning enthusiasm forthe extra step of adding water. As if to confirm thissuspicion, dry soup consumption does drop further in thenext age group.

Soup Consumers over 65 Like Their Broth

The oldest age group contains the most dedicated brothusers. By analyzing the Simmons data, Packaged Facts wasable to develop a profile of those consumers who use onlybroth, no soup. Only the 65 and older age group has asignificantly high proportion of broth-only consumers. Infact, 36% of all broth-only consumers are 65 or older,although only 19% of principal shoppers are in that agegroup. (All age groups under age 55 have significantly lownumbers of broth-only users.) Consumers in this age groupare also significantly high consumers of two popular brothbrands, College Inn and Swanson. In fact, seniors accountfor over a quarter (26%) of Swanson broth consumers. (SeeTable 2- 19.)

Consumer Use (General): Education; Employment Status

Education Makes a Difference in Brand Choice

Education does not make a difference to overall soupconsumption, but it does matter to brand choice,particularly among dry soup brands. Table 2-20 summarizesthe principle differences between brand consumption andeducation. Shown are the percentage of users in eacheducational category that uses a particular brand. Forcomparison purposes, the table also lists the total

percentage of principal shoppers that buy each of the brandsshown. Percentages in bold face indicate consumption thatis significantly higher than the rate for all of theprincipal shoppers.

The table shows that consumption does varysignificantly by education group for specific brands. Themost popular dry-soup brand in the Simmons data is Lipton'sSoup Mix, and it is especially popular with high schoolgraduates (the largest educational category among principalshoppers). Significantly high numbers of high schoolgraduates also buy Lipton's Cup-A-Soup and Campbell'sinstant soup. By contrast, those that attended or graduatedcollege buy these brands at only average or below-averagerates, but a significantly high percentage of collegeattendees/graduates buy Knorr soups. They also prefer Herb-Ox over the Lipton's and Campbell's brands. Shoppers whodid not graduate high school buy only Nissin soups atsignificantly high rates. In fact, their consumption of allother dry soup brands is significantly below average.

Unemployed Are Broth Consumers

Employment status is not a heavy predictor of soupconsumption patterns; however, it does point to somedifferences in the types of soup consumed, perhaps based onthe different life-styles associated with one's employmentstatus. Table 2-21 shows users of soup types by employmentstatus. Those not employed (i.e., unemployed, retired,never employed, etc.) are significantly high brothconsumers. Eight percent of them consume only broth, notusing canned soups. This group also dominates in the majorbroth brands of College Inn and Swanson.

Part-time employees are the strong dried soup users.They have a significantly high rate of use for dried soups,and are also significantly represented among the form'sheavy users. Full-time employees are significant consumers in thelunch soup mix market.

Consumer Use (General): Income

Wealth Widens a Shopper's Soup Tastes

Wealth and prestige bring variety to a home's soupconsumption habits. According to the Simmons data, the soupconsumption patterns in households with under $10,000 inincome are notable only in two areas, a high number of broth-only consumers and, for those who do use soup, a high numberof people who use non-condensed forms of canned soup. Thosepatterns continue for households in the $10,000 to $19,999range. The only additions to this group are that thesehouseholds also include significant numbers of shoppers whouse Campbell's Cup of Soup and Nissin brand of dried soup.

Looking at the other extreme, households making $75,000 ormore per year, the data show much more complex patterns.Unexpectedly, that group too contains a significant numberof consumers who consume only broth, not soup; but the soupusers show a great variety of tastes. Table 2-22 summarizes the most notable facts about soupconsumption with reference to household income. Significantconsumption rates are shown in bold. Even without readingthe table, it is apparent that most of the bold figures arein the column for households earning $40,000 or more.

Higher-Income Households Have Their Own Brands

One striking detail from Table 2-22 is the absence ofleading brands of soups. Although Campbell's condensedsoups are the best-selling canned soups in the country,their appeal is across the board and without any specialstrength among some socio-economic group. The same is truefor the dried soup brand leader, Lipton's. Yet among thetop-income households, brands other than Campbell's andLipton's do have a significant following. There are, ofcourse, some consumers who use condensed soup but notCampbell's brand, and these households are most common inthe higher income brackets. The table shows that householdswith incomes of $30,000 or more lead in this category.Households with incomes under $20,000 are much less likelyto have Campbell's brand avoiders. This pattern may wellreflect an anti-condensed soup bias of some sort. The tableshows that it is precisely the lower-income households thatare most likely never to use condensed soup at all. Thecondensed soup brand preferred by higher-income householdsis Progresso. Dry soups show the same pattern. The most popularbrands are Lipton's and Campbell's, but among the richerhouseholds we find significant numbers that never buy thesebrands. They are significantly high consumers of Knorr andHerb-Ox. Even among the broth brands, the brand bought by thelargest number of principal shoppers is Swanson. That isthe only brand that does not have a significantly highfollowing among the $40,000 and up households. Thisrejection of the leading broth brand is particularlystriking in this case because the table also shows thatbroth becomes more common as the household income goes up.(A contrapuntal pattern appears among households thatconsume only broth. There the rate tends to rise ashousehold income declines.)

High-Income Households Like Dry Soup

The table also shows that dry soup is strongest in high-income households. Not only does the $40,000 and over groupdominate in the use of dry soups, but it also leads in allforms of dry soups: bouillon cubes, instant mixes, and soupmixes that require cooking. A similar pattern is visible in the sorts of employment

held by a household's principal shopper. Table 2-23 showshow they consume forms of dried soup. On this table,professional and managerial employees dominate not only thedry soup market as a whole, but also the various forms ofsoup within the segment.

Consumer Use (General): Midwest; Family Characteristics; Race

The Midwest Is Soup Country

Canned soups and broths are popular nationwide, with nosignificant variation in the level of total use from regionto region; however, heavy users are more common in theMidwest than in any other region. Table 2-24 shows some ofthe regional characteristics of soup consumption. TheMidwest is the only region where heavy consumption issignificantly high.

Soup in the Middle, Broth on the Coasts

Packaged Facts has analyzed Simmons data to obtain afull picture of the difference between soup and broth users.Canned soup and broth consumers may be separated into threecategories: (1) those who consume both soup and broth, (2)those who consume only soup, and (3) those who consume onlybroth. Consumers who use soup only and no broth are thelargest group everywhere, but they are significantly commononly in the Midwest. Shoppers who buy both soup and brothare the next largest group, but they are particularly strongin the Northeast. The smallest group are consumers who useonly broth; they are significantly more common in theNortheast and West. The South, which has the largestpercentage of the nation's shoppers, dominates in none ofthese categories.

Dry Soups Do Well in Midwest

The table shows that dried soups, in almost every form,are especially popular in the Midwest. The region dominatesin overall use of dried soups, in use of bouillon cubes,broth powders, and in the use of soup mixes that requirecooking. Soup mixes also find significantly high usage inthe Northeast. Only for lunch mixes do we find a break withthis Midwestern dominance. Per capita sales of lunch mixespeak strongly in the West.

The More the Soupier

A variety of details in Simmons data depend on theconsumer's family life-style. Consumers may be parents ornon-parents; they may live alone or with others; they canlive with small children, teenagers, or no children at all.Table 2-25 summarizes some of these data and makes the samepoint across a variety of categories of data. It seems that

no matter how you measure it, the more people that are apart of one's life, the more important becomes soup'spresence.

Families Make Heavy Soup Users

Large households are more likely to be heavy soupconsumers. The table shows that households with three ormore members and households with children aged two and olderare significantly more likely to be heavy consumers ofcanned soups and broths. The pattern is repeated for heavyconsumers of dried soups, and this latter category has oneaddition. Parents are more likely than non-parents to beheavy users of dry soups.

Families with Children Like Condensed Soup

The table also shows that condensed soup use isassociated with children. Parents and households withchildren aged six and up are significantly more likely thanthe average household to use condensed soup.

Singles Like Broth

Life-style patterns for shoppers who use only broth, nosoups, are exactly contrary to the soup consumptionpatterns. In this case, it is the non-parents, people withonly one person in the household, and families with eitherno children or children under two that limit themselves tobroth. Broth consumption levels go down as households grow.Plainly, this pattern reflects the age relationshipdiscussed earlier in this chapter seniors, 65 years andolder, are far more likely than younger folks to be broth-only users.

Dry Soups Are Strong with Families

The pattern for dry soup segments is very stable.Whether we are talking about all dried soups, or bouilloncubes, instant mixes, or soup mixes that require cooking,use by parents is significantly greater than use by non-parents. The likelihood of use goes up with a rise in thenumber of people in the household. Dried soup use alsoincreases as children get older.

African-American Consumers Have Their Own Tastes in Soup

Simmons data show that the consumption of any form ofcanned soup or broth by African-American shoppers is lowerthan the national average, and is on the cusp of beingsignificantly lower (national average = 77.5%;African-American consumption = 69.4%), but the moreimportant fact is that African-American shoppers spend theirsoup-buying dollars in their own way. African-Americans aresignificantly more likely than whites to be heavy soup

consumers. They also include a significant number of soupusers who never buy condensed soups. That fact isreinforced by the Campbell's varieties that they do buy insignificantly high quantities: Campbell's Chunky andCampbell's Home Cookin' soups. There are also adisproportionately large number of African-Americanconsumers who only use broth.

Use By Category: Canned Soup (1/3)

Use by Category: Canned Soup

Over Three-Quarters of Principal Shoppers Use Canned Soup orBroth

According to Simmons data, 77.5% of households usecanned soup or broth. This figure marks a slight increasefrom the figure used in the previous Packaged Facts reportof 76.4%. Simmons surveys are extensive enough for avariation of 1.1 percentage points to be significant, beyondthe margin of error. Thus, despite the market's maturity,it would appear that it continues to attract consumers. Afew of these shoppers stay exclusively with broth, but 72.2%of households do use soup.

Heavy Users Account for over Half of Cans Consumed

Soup consumers can be divided into heavy, medium, andlight users, and according to Simmons data almost half ofall canned soup or broth consumers (44.7%) are medium users,consuming two or three cans of soup during a week. Heavyconsumers (households using four or more cans per week)amount to a bit over a quarter of users (29.2%), while lightusers are also slightly over a quarter (26.1%). Heavy consumers, however, have a much greater impact onthe market, because they account for over half (57.7%) ofall cans consumed. Figure 2-14 shows the difference betweenthe users and the usage. Medium users are unquestionablythe largest group of consumers, but the heavy users accountfor much more soup consumption. Meanwhile, light users arealmost as plentiful as heavy users, but their impact on themarket is negligible.

Ethnic Minorities Present Contradictory Picture

The impact of minorities on the canned soup market isnot straightforward. On the one hand, overall consumptionrates are low. African-American consumers are right on thecusp of being significantly low. Simmons data show that69.4% of African-Americans use soup or broth, 10% below thenational norm (77.5%). Other minority races are, indeed,significantly below the national norm, with only 65.6%consuming canned soups or broths.

On the other hand, African-Americans are significantlymore likely than whites to be heavy consumers of soups orbroths, and other minorities are slightly more likely thanwhites to be heavy soup consumers. The overall effectappears to be that African-Americans have a larger impact onthe soup market than their population would suggest, andother minorities have an impact that is reasonably inbalance with their numbers. (See Table 2-26.)

It should also be noted that the slight growth in thesize of the population of canned soup consumers seems tohave come from good growth among both African-American andother minorities. In the last Packaged Facts report, 64.2%of African-Americans and 58.1% of other minorities usedcanned soups or broths. The latest data show these numbershave grown to 69.4% and 65.6%, respectively. Activity inthese ethnic markets, therefore, may account for real growthin the soup market. (It should be cautioned, however, thatthese groups comprise relatively small proportions of theSimmons sample, and what we see may be due to a datashortfall rather than real market changes.) See Table 2-27 for more complete profiles of selectedcanned soup users.

Use By Category: Canned Soup (2/3)

Campbell's Condensed Soup Has Largest and Most LoyalFollowing

Table 2-28 shows consumption patterns for differentbrands of canned soup. Besides giving the percentages ofhouseholds that used different brands during a one-weekperiod, it shows whether those brands are the only onesconsumed, the primary ones consumed, or a secondary choice.The table also includes a column headed "Loyalty Factor."This column indicates what percentage of a brand's usersconsume only that brand. In that column, Campbell'sCondensed soup is notable for having a loyalty thatapproaches half its market (45%). Many other soups do noteven reach a loyalty factor of 20%. Another fact thatillustrates the strong hold of Campbell's Condensed soup isthat it is the only soup whose sole users outnumber theprimary users. In part, this loyalty probably reflectsCampbell's broad line of available soup varieties. Othermarketers do not attempt to compete through such a widerange of choices.

Campbell's Strength Is in Its Universality

The strength of the varieties sold under the Campbellbrand, and thus the strength of the Campbell brand as awhole, is its universal acceptance. Every demographic groupuses it, and uses it about equally with all the othergroups. If one variety shows an area of weakness, other

varieties pick it up. For example, Campbell's Condensedvariety shows some significant weakness in the Northeast,but Campbell's Healthy Request has significant strength inthat same region, so that overall consumption rates of theCampbell's line in the Northeast remain normal. The onlytwo exceptions to this rule are among Midwesterners and theelderly. Midwestern consumers like their Campbell's Condensedsoup. Nationally, 35.5% of consumers use it, but in theMidwest 44.2% take it. Other Campbell's varieties in theMidwest enjoy normal use patterns; none are significantlyweak. The overall effect is to give the Campbell brand aboost among Midwestern consumers. Elderly consumers, however, those 65 and older, are notCampbell's soup consumers to the same extent that other agegroups are. (Remember, we are talking about differenceswithin a brand's consumption patterns. In absolute terms,Campbell's outsells every other brand everywhere.) Elderlyconsumers are significantly less likely to use two ofCampbell's ready-to-serve varieties, Campbell's Chunky andCampbell's Home Cookin'. Nor do they make up for thisreduced interest with use of Campbell's Condensed or itsHealthy Request varieties. Consumption rates for these twovarieties are normal. The overall effect, therefore, is tomake Campbell's soup consumption among the elderly slightlybelow normal rates. (See Table 2-29.)

Use By Category: Canned Soup (3/3)

Progresso Consumers Tend To Be Upscale

Progresso soups do their best among upscale consumers.Nationally, 10.5% of shoppers use Progresso; however, amongcollege graduates, that usage jumps to 15.8%. Figure 2-15shows the steady rise in consumer share that accompanieseach $10,000 additional in income. For household incomesbelow $30,000 per year, consumption of Progresso issignificantly below the national average. For incomes above$40,000, Progresso consumption is above the nationalaverage, with an unexplained dip in the $50,000 to $60,000range.

There are also notable regional variations inProgresso's consumption rate. It is strongest in theNortheast, where 15.7% of consumers use it, and in the West.Consumption rates are significantly low in the South and inthe Midwest. (See Table 2-30.)

Healthy Choice Does Well with Professionals

Healthy Choice's sales are not tipped upscale quite asdramatically as for Progresso, but its consumers too tend tobe well educated. College graduates and professionals areboth significantly more likely to buy Healthy Choice than isthe population as a whole. However, the Healthy Choice

brand's strength comes chiefly from its ability to hold onto less upscale shoppers. There is not much significantvariation, for example, among shoppers of differinghousehold incomes, except for a sudden jump for householdsin the $60,000 to $75,000 range. Regionally, too,consumption stands within a normal range of variation. One important group of Healthy Choice consumers isamong non-African-American minorities. Their consumption issignificantly up from the national average, whereas theirconsumption rate of Progresso is significantly lower thanthe national average. Progresso is generally so muchstronger than Healthy Choice that even where Progresso isweak it does better than Healthy Choice in terms of absolutenumbers of consumers; however, among non-African-Americanminorities, Progresso is so weak and Healthy Choice sostrong that user counts are virtually matched, 8.9% forProgresso and 8.6% for Healthy Choice. These numbers arewithin the survey's margin of error, and Healthy Choicecould even be slightly outselling Progresso for this group.

Snow's Brand Is Strongest on Coasts

Although it is a small brand nationally (used by 2.9%of consumers), Snow's shows significant strength in theNortheast (4.4%) and in the West (3.8%). Educationally, ithas significant strength among high school graduates, and inhouseholds where the income is above average (over $30,000),although sales are significantly lower among the richesthouseholds, those with incomes of over $75,000.

Use By Category: Canned Broth

Use by Category: Canned Broth

Over a Quarter of Consumers Use Broth

According to Simmons Market Research Bureau, 29.4% ofprincipal shoppers buy canned broths. A much smallerpercentage (5.3%) of consumers consume only broth, and nocanned soup. Broth users have many more distinctcharacteristics than do soup users, as illustrated in Table2-31. Broth users tend to be well-educated, prosperousconsumers. The picture that emerges is of people who liketo keep variety in their lives. They eat soup, but theyalso eat broth. Households with incomes over $40,000 allshow significantly high consumption rates of broth. Collegegraduates also have significantly higher consumption ratesof broth than do other educational categories, and consumerswho did not graduate from high school have significantlylower broth consumption rates. A very different portrait emerges, however, for thoseconsumers who use only broth and not soup. By analyzing theSimmons data, Packaged Facts was able to distinguish betweenthose consumers who use soup and broth and those who useonly broth. The full portrait of broth-only consumers shows

they are the mirror opposites of those who use broth andsoup. These consumers tend to be the older and poorerpeople. Among the elderly, for example, 10% of them consumebroth, but not soup, almost double the national average. A significant share of broth-only consumers also livein households than earn under $20,000 per year. They tendto not be high school graduates and are not employed. Theyalso tend to live alone and to be divorced, separated, orwidowed. In short, consumers who buy broth, but never soup,tend to have the characteristics of people who are watchingtheir pennies very closely.

Brand Loyalty Is Not Strong Among Broth Users

Table 2-32 summarizes the brand buying habits of brothusers. None of them show an especially strong brandloyalty. This pattern is not surprising for a product whoseconsumers see it as a source of variety rather than as astaple.

Broth Brands Competing for Same Consumers

Broth brands appear to be sharing the same consumerniches. The sharpest division of strength among the brandsis in regions. College Inn is strongest in the Northeast,drawing almost half of its consumers from that one region.Swanson Broth is strongest in the West and also has asignificantly high following in the Midwest. Campbell'sCondensed broth does best in the West, but the brand's realstrength is that it sells well in every region of thecountry. There is no area where its consumer share dropssignificantly. Table 2-33 shows not only the regionalstrengths of these brands but also other demographic factorsthat favor the brand's selection.

Use By Category: Dry Soup (1/2)

Use by Category: Dry Soup

Two-Fifths of Consumers Use Dry Soup

According to data from Simmons Market Research Bureau,almost 40% of principal shoppers buy soup in some dry form.This number marks a decline from the previous Packaged Factsreport, when about 43% of principal shoppers were foundusing dry soup in one form or another. Table 2-34 summarizes the data about consumption of drysoup forms. The most popular form is bouillon and brothcubes or powder, used by almost a quarter of all consumers.Almost half of dry soup consumers do not use dry soup in anyother form.

Simmons distinguishes between two forms of instantmixes that are made by adding boiling water: the instantsoup mix and the instant lunch mix. Instant soup is themost popular mix, while instant lunches are the leastpopular. Between the two are the soup mixes that requirecooking. Table 2-35 highlights the demographic characteristicsthat favor use and heavy use of dried soup products.

Heavy Users Responsible for 61% of Consumption

Heavy users, defined as consumers who use three or morepackages of dried soup per week, account for 61% ofconsumption, although they constitute only a quarter (27%)of the dry soup buying population. Medium consumers, whouse one or two packages per week, are responsible for almostall the rest of sales. Light consumers, using less than onepackage per week, account for almost none of the market.(See Figure 2-16.)

Bouillon Brands Command Greatest Loyalty

Consumer loyalty, measured by the percentage ofconsumers who only use one brand, is generally not strongamong the major brands of dried soup. Neither Campbell'snor Lipton's commands great loyalty here. Table 2-36summarizes consumption and loyalty patterns for selectedbrands. The bouillon brands Wyler's and Herb-Ox command thegreatest loyalty. The contrast is particularly striking forKnorr. A fifth (22%) of Knorr bouillon users limitthemselves to that one brand, whereas about half that number(13%) of Knorr soup users stay with that one brand.

Use By Category: Dry Soup (2/2); Frozen Soup

Lunch Mix Has Unusual Consumers

Most forms of dried soup have consumers who match theoverall pattern of dry soup users. For example, use ofdried soup goes up with household income. This fact is truefor dried soups in general and for the different forms, bethey bouillon cubes, instant soup mix, or soup mix thatrequires cooking. However, it is not true for lunch mix.For this soup form, there is no significant variation inconsumption rates across the whole spectrum of householdincomes. Similar breaks with the general pattern can be found inother demographic categories. On the whole, dried souptends to be a white consumer's purchase. African-Americansare significantly less likely to buy dried soups, and otherminorities are right on the cusp of significance, standing

10% below the national norm. Among lunch mix users,however, "other" minorities are much more likely to use theproduct than are whites or African-Americans. Among whiteshoppers, 5.2% buy lunch mix. For African-Americanshoppers, the number is only slightly lower, 4.6%. Forother minorities, however, 13.6% use lunch mix. Creation ofthis category has established a dry soup form amongstconsumers who, otherwise, would not be buying much of theproduct.

Brand Preferences Change with Consumer's Ethnicity

On the whole, African-American consumers are not strongusers of dried soups. Their consumption rate for this soupform is 28.8%, significantly below the national norm of39.7%, and their share of heavy users is merely normal.When it comes to buying Campbell's Cup Instant Soup,however, African-American consumers suddenly come alive,with 6.3% of African-American shoppers buying the product.Only 6.0% of other minorities buy it, and 5.4% of whites.Ethnic preference also affects Nissin sales. Non-African-American minorities are especially strong among itsbuyers, with 9.4% of them using the brand (contrasted with5.5% of white shoppers). (See Table 2-38.)

Middle America Likes Lipton

High school graduates working as technicians, clerks,and sales people are significantly more likely to use Liptoneither in Cup-A-Soup or Soup Mix form. The Cup-A-Soup usersseem to be slightly less established than Soup Mix users.They are younger, have smaller households, and theirchildren are younger.

Knorr and Herb-Ox Aim at Same Niche

Knorr and Herb-Ox consumers share very similarprofiles: at least some college, management-levelemployment, high income. They are even strongest in thesame region, the Northeast. According to mechanicaltheories of competition, two cannot compete forever for thesame niche; however, loyalty data shows that Herb-Oxconsumers are particularly faithful to the brand. Itsuggests Herb-Ox has a hidden strength that allows it tohold onto consumers in this niche.

Campbell's Cup Instant Is Strong with Working Class

A significant characteristics of consumers ofCampbell's Cup Instant Soup is that they are working class.Their incomes are often low, but not the lowest. They did

not attend college, but they have high school diplomas.Their children are young. African-Americans especially likethis brand.

Nissin Consumers Are Young

Dried soup brands tend to be favored in the 35-55 agegroup, but Nissin soups find strength among consumers asyoung as 25. It has a less status-based following, showingstrength among consumers without a high school diploma.

Use by Category: Frozen Soup

Few Consumers Use Frozen Soup

Very little data about consumption of frozen soup areavailable; however, Simmons Market Research Bureau doesreport that 4.6% of principal shoppers say they or othermembers of their household use it. This figure marks a dropof about one share point from that noted in the previousPackaged Facts report on the soup market. No data areavailable to provide a profile of frozen soup users. The earlier Packaged Facts report did have access to aricher set of data, and found that frozen soup consumerstended to be poor, southern, and African-American.Presumably, this overall pattern has not changed much.These consumers are often underrepresented in other forms ofsoup. Thus, despite its small size, the frozen soup marketappears to be serving a niche that is not strongly served byother segments of the soup market.

Table 2-1: "Low" Levels of Selected Ingredients in SoupServings, 1994 Ingredients: Calories, Fat, Saturated Fat, Cholesterol,and Sodium

Maximum Allowed Ingredient per Soup Serving

Calories 40 calories Fat 3 grams Saturated Fat 1 gram and 6 calories Cholesterol 20 milligrams Sodium 140 milligrams

Source: Food and Drug Administration.This material used with permission.

Table 2-2: Growth of U.S. Soup Market: By Category, 1992- 1996

(retail dollars); Categories: Canned, Dehydrated, and Bouillon and Broth(In Millions)

Canned Dehydrated Bouillon & Total Broth

Year $ % $ % $ % $ % Sales Chg Sales Chg Sales Chg Sales Chg

1996(e) $2,870 5.0% $700 3.4% $419 5.5% $3,989 4.8%1995 2,734 2.7 677 3.8 397 3.1 3,808 2.91994 2,663 6.8 652 5.2 385 6.1 3,700 6.41993 2,493 5.3 620 1.3 363 7.4 3,476 4.81992 2,367 _ 612 _ 338 _ 3,317 _

(e) = estimated.Sources: Information Resources Inc.'s InfoScan; PackagedFacts.This material used with permission.

Table 2-3: Size and Growth of U.S. Soup Market: By Category,1992-1996 1996 (pounds); Categories: Canned, Dehydrated, and Bouillonand Broth (In Millions)

Canned Dehydrated Bouillon & Total Broth

Pound Pound Pound PoundYear Volume % Chg Volume % Chg Volume % Chg Volume % Chg

1996 2,451 1.4% 292 2.5% 368 4.0% 3,111 1.8%(e)1995 2,417 0.6 285 4.8 354 3.2 3,056 1.31994 2,403 1.9 272 3.8 343 4.3 3,018 2.31993 2,358 2.5 262 5.2 329 9.7 2,949 3.51992 2,300 _ 249 _ 300 _ 2,849 _

(e) = estimated.Sources: Information Resources Inc.'s InfoScan; PackagedFacts.This material used with permission.

Table 2-4: Projected Growth of U.S. Soup Market: By Category,1996-2001 2001 (retail dollars); Categories: Canned, Dehydrated, andBouillon and Broth (In Millions)

Canned Dehydrated Bouillon & Total Broth

Year $ % $ % $ % $ % Sales Chg Sales Chg Sales Chg Sales Chg

2001 $3,611 4.7% $844 3.8% $537 5.1% $4,992 4.6%2000 3,449 4.7 813 3.8 511 5.1 4,773 4.61999 3,294 4.7 783 3.8 486 5.2 4,563 4.61998 3,146 4.7 754 3.7 462 5.0 4,362 4.61997 3,005 4.7 727 3.9 440 5.0 4,172 4.61996 2,870 _ 700 _ 419 _ 3,989 _

Source: Packaged Facts.

Table 2-5: Projected Growth of U.S. Soup Market: By Category,1996-2001 2001 (pounds); Categories: Canned, Dehydrated, and Bouillonand Broth (In Millions)

Canned Dehydrated Bouillon & Total Broth

Pound Pound Pound PoundYear Volume % Chg Volume % Chg Volume % Chg Volum % Chg

2001 2,627 1.4% 348 3.6% 458 4.6% 3,433 2.0%2000 2,591 1.4 336 3.7 438 4.5 3,365 2.01999 2,555 1.4 324 3.5 419 4.5 3,298 2.01998 2,520 1.4 313 3.6 401 4.4 3,234 2.01997 2,485 1.4 302 3.4 384 4.3 3,171 1.91996 2,451 _ 292 _ 368 _ 3,111 _

Source: Packaged Facts.

Table 2-6: Principal Shoppers Who Buy Soup: By Category, ByRegion, 1994 (numbers); Categories: Canned Soups and Broths and DrySoups; Regions: Northeast, Midwest, South, and West (In Thousands)

Canned Soups & Dry Soups BrothsRegion All Heavy All Heavy Users Users Users Users

South 31,163 9,696 14,391 3,869Midwest 23,751 7,322 12,503 3,047West 17,611 4,690 9,965 3,029Northeast 17,296 4,508 9,160 2,463

Source: Simmons Market Research Bureau.This material used with permission.

Table 2-7: U.S. Soup Marketers and Their Brands: By ProductType, 1996 Marketer/Division/Category Brands (A-B)(Thirty-Eight CompaniesListed)

AM Look Canning

Canned Look's Atlantic

Acemark Dry Home Gourmet

Advance Food Brokers Broths, etc Moirs

Ajinomoto USA Broths, etc Aji No Moto

AlbertoCulver Broths, etc Milani, Smithers

Allen Broths, etc First Choice

AmericanHome FoodProducts Broths, etc George Washington Canned Luck's

AmericanImports Dry Amport

AmericanMarketingTeam Broths, etc Dominique's Canned Dominique's

AndreProst Dry A Taste of Thai

Andy Boy Dry Quick Cook

ArrowIndustries Dry Arrow

ArrowheadMills

Dry Arrowhead Mills

AstraImporting Dry Winiary

AtlanticFoods Frozen/ Refrigerated Marino's

BarzizaBrothers Dry Barzi

Baxter'sofSpeyside Canned Baxter's Broths, etc Baxter's

BayouMagic Broths, etc Bayou Magic Dry Bayou Magic

Bear CreekCountryDips Dry Bear Creek

Benham Dry Benco Peak

BisonCanning Broths, etc Drago

BlueBayouKitchen Broths, etc Superior Touch

Blue SurfFoods Canned Blue Surf

Boardson's Frozen/ Refrigerated Boardson's

Bob EvansFarms Frozen/ Refrigerated Bob Evans

Bob's

Red MillNaturalFoods Dry Bob's Red Mill

BookbinderFoods Canned Bookbinder's

Borden Borden Broths, etc Borden, Borden Lite Line, Borden Soup Starters, Borden Stew Starter, MBT, Steero, Wyler's

Canned Borden Ocean's Harvest, Borden Snow's,Doxsee Dry Mrs. Grass

Borden Grocery Broths, etc Los Calditos Canned Harris, Hilton Borden Pasta Dry Ronco

BrinkmanTurkeyFarms Broths, etc Brinkman's Canned Brinkman's

Brittigan's Canned Brittigan's

BroughtonCannery Broths, etc Ma Collins

BruceFoods Canned Greens of New Orleans

BrunoDuluth Canned Bruno

BryanFoods Canned Alabama Country Hits

BuckeyeBeans& Herbs Dry Aunty Patsy, Buckeye Bean and Herb, Buckeye

Funny Bunny

BunkerHillPacking Canned Bunker Hill

BurnsPhilp Specialty Brands Broths, etc Spice Island

Source: Packaged Facts.

Table 2-7: U.S. Soup Marketers and Their Brands: By ProductType, 1996 Marketer/Division/Category Brands (C-E)(Forty-One CompaniesListed)

CBHoldings Mothers Food Products Broths, etc Mother's Canned Mother's, Mother's Own Rokeach Food Canned Grandma's, Rokeach

CPCInter-national Best Foods Broths, etc Bovril, Knorr, Knorr Swiss Dry Knorr, Knorr Chef's Collection, Knorr Swiss Frozen/ Refrigerated Knorr, Knorr Ultimate Iberia Foods Canned Iberia Israel Edible Products Broths, etc Telma Dry Telma National Food Industry Dry National Food Mariquita

Cajun Fry Dry Cajun Fry

CampbellSoup Campbell Soup Broths, etc Campbell's, Campbell's Healthy Request, Swanson, Swanson Natural Goodness

Canned Campbell's Chef's Kettle, Campbell's Chunky Soup, Campbell's Condensed, Campbell's Healthy Request, Campbell's Home Cookin', Campbell's Man Handler, Campbell's Microwave Chunky, Campbell's Special Request

Dry Campbell's, Campbell's Cup, Campbell's Cup A Ramen, Campbell's Ramen, Campbell's Soupsations

Catelli-Habitant Canned Habitant Pepperidge Farm Broths, etc Pepperidge Farm Canned Pepperidge Farm Sanwa Foods Dry Caldo Pronto, Ramen Pride, Sanwa

CampsideFoods Broths, etc Campside Canned Campside

CascadeConti-nentalFoods Dry Cascade Kitchens

Ce DeCandy Dry Golden Lite

CentroFineFoods Broths, etc Cento Canned Cento, Cento Capri

ChaletSuzanneFoods Canned Chalet SuzanneChef Hans'GourmetFoods Dry Chef Hans

ChefPieroProducts Broths, etc Chef Piero

Cherchies Broths, etc Cherchies Dry Cherchies

ChoteagueSeafoods Canned Cape Cod, Chincoteague

ColonialWilliams-burg Canned Colonial Williamsburg

ConAgra Hunt-Wesson Canned Healthy Choice, Healthy Choice Thick and Hearty, Healthy Choice Traditional Broth

ConcordFoods Dry Concord

ConradRice Mill Dry Konriko

Cook-in-the-Kitchen Dry Cook-in-the-Kitchen

CosmosInter-national Dry Cal Island

D'AlyrtioFoods Canned Healthy Cuisine

Dan'lWebster Frozen/ Refrigerated Dan'l Webster Inn

DanielHilger Dry Hilger

Davis Lay Frozen/ Refrigerated Mallard's

Delallo

Packing Broths, etc Colonial Inn

Delaune'sCajunFoods Dry Delaune's

DesertGardensChili &Spice Dry Desert Garden

The DialCorpo-ration Broths, etc Armour Canned Lunch Bucket, Lunch Bucket Variety Pack

DismatCorp. Broths, etc McKay's

Double JMushrooms Dry Shitake

DouglasFoods Broths, etc Carmel, Flavor Gem Dry Carmel, Flavor Gem

DowneyFoods Canned Downey's, Dublin Bay

DudekDelica-tessenFoods Frozen/ Refrigerated Dudek

E.B.Malone Dry Canyon Country

EFCOImporters Broths, etc Hulgi

Erasco Canned Erasco

Ebro Foods

Canned El Ebro

Edward &Sons Dry Edward & Sons, Miso Cup

EmesKosherProducts Broths, etc Emes

EpicureanInter-national Canned Thai Kitchen

Estee Broths, etc Featherweight

Euroo-Direct Canned Gundelshim

Source: Packaged Facts.

Table 2-7: U.S. Soup Marketers and Their Brands: By ProductType, 1996 Marketer/Division/Category Brands (F-I)(Forty- Two CompaniesListed)

FairExchange Canned Shari's Bistro

FantasticFoods Dry Fantastic, Fantastic Noodles, Fantastic OnlyA Pinch

FearnInter-national Broths, etc Franklin Colony, Le Gout Canned Le Gout

Fleming Gateway Foods Broths, etc Specialty Club

FosterPoultryFarms

Broths, etc Foster Farms

Four CFoods Dry 4C

FourwaysRestaurant Canned Fourways

FrontierSoups Dry Frontier

G & HInter-nationalTraders Broths, etc Specialty Club Dry Lysander

GarciaCanning Canned Garcia

GenevaFoodsProducts

Gibbs WildRice Dry Gibbs

GingerbearHouse Dry Mama Osa's

Gold PureFoodProducts Canned Gold's

GoldenDipt Dry Golden Dipt

GonzalesProducts Canned Blue Runner

Goodman'sMatzohProducts Dry Goodman's

Gorton Canned Gorton

GourmetAwardFoods Broths, etc Gourmet Award Canned Port Arthur Dry Port Arthur

Goya Foods Broths, etc Goya Canned Goya

GrandImperial Dry Tung

GrandMetro-politan Pillsbury Broths, etc Hain, Progresso Canned Hain, Old El Paso, Progresso, ProgressoHealthyClassics

GrandmaBrown'sBeans Canned Grandma Brown's

HBR Canned Wye River

HASMarketing Dry Savion

HanoverFoods Spring Glen Fresh Foods Frozen/ Refrigerated Spring Glen Farm Kitchen, Spring Glen Fresh Foods

Harmon'sGourmet Dry Harmon's Gourmet California Treats

Harry Soup& Chowder Frozen/

Refrigerated Pacific Fish

HawaiiAssociatesWholesale Frozen/ Refrigerated S&S Brand

HealthHouse Dry Bag O Beans

HealthValleyNatureFoods Broths, etc Health Valley Canned Health Valley, Health Valley Fast Menu Dry Health Valley

HeartlineFoods Dry Bascoms

H.J. Heinz Heinz USA Broths, etc Heinz Great American Canned Heinz Great American Weight Watchers Broths, etc Weight Watchers Canned Weight Watchers

HersheyPastaGroup Dry Mrs. Weiss

HiltonSeafood Canned Skipper's

Hobo Soup Canned Hobo Soup

Hong Kong Canned Datung

HormelFoods Broths, etc Herb-Ox Canned Hormel Micro Cup

ISMC'SBlintzes Canned Ismc

Indo

EuropeanFoods Dry Vegetables

Interclass Broths, etc Kame Dry Kame

Ivories Frozen/ Refrigerated Ivories

Source: Packaged Facts.

Table 2-7: U.S. Soup Marketers and Their Brands: By ProductType, 1996 Marketer/Division/Category Brands (J-M)(Forty-Nine CompaniesListed)

JCL Brooke Broths, etc Adele's Choice Dry Brooke

JFCInter-national Broths, etc Dynasty Dry Dynasty, Hime, Momoya, Myojo, Myojo Udon

Frozen/ Refrigerated Welpac

Jade Isle Frozen/ Refrigerated Jade Isle

Jake'sProducts Canned Jake's

James Green Valley Fresh Broths, etc Valley Fresh

John ZidianBrokerage Broths, etc La Russa

Juanita'sFoods Canned Juanita's

Just

DeliciousGourmetFoods Dry Just Delicious

Kary's Roux Dry Kary's

Kedem FruitProducts Canned Kedem Dry Kedem

Kellogg Nhong Shim Dry Choice

KennebecBean Dry A-1

KennedyGrace Dry Grace

KikkomanInter-national Broths, etc Kikkoman Dry Kikkoman

Kirby Foods Canned Kirby

Kleen-PakFoods Dry Kleen Pak

Kona CoastProducts Dry Kona Coast

KooperativaForbundet Canned Skandia of Sweden

KosherDesserts Broths, etc Kojel Dry Kojel

LJ Minor Frozen/ Refrigerated Minor's

Legumes

Plus Dry Legumes Plus

LieberChocolate &FoodProducts Dry Lieber

Little BearBearitos Canned Little Bear Bearitos

LittleBear &WestbraeNationalFoods Dry Westbrae, Westbrae Natural

Log HouseFoods Dry Log House

LouisianaGourmetEnterprise Dry Mama Papaul's

LuccaPacking Canned Riviera

LynderFoods Dry Lynder's

MCC FoodsAmerica Canned The Rice Road

M.P.Keelin &Association Dry M.P. Keelin

MagicValleyGrowers Dry Magic Valley

MahlerSucesores& Companies Dry Mahler

Mani-schewitzFoodProducts Broths, etc Manischewitz Canned Horowitz Margareten, Manischewitz Dry Horowitz Margareten, Manischewitz

Mars Uncle Ben's Dry Uncle Ben's

MarthaWhite Foods Dry Dixie Lily

MarukaiTrading Broths, etc Marukai

Mary BrownEnterprises Frozen/ Refrigerated Mary Brown's

MayacamasFineFoods Dry Just Enough, Mayacamas

McCormick Broths, etc Crescent, McCormick Schilling, McCormick Schilling Spice Classics

McQuaidInter-national Broths, etc Tilley's Galley Dry Tilley's Galley

MitchellLaneKitchens Frozen/ Refrigerated Mitchell Lane Kitchens

Mitsubishi Sanyo Foods Dry Sapparo

Modern

Products Broths, etc Gaylord Hawser

MoonliteBBQ Inn Frozen/ Refrigerated Moonlite

Morgan Food Canned American Beauty

MouseOftsang Dry Mouse Oftsang

Mrs.Adler'sFoods Canned Mrs. Adler's

MutualTrading Frozen/ Refrigerated Kanemasa, Osho Udon

Myojo Foodsof America Dry Myojo Chukazanmai

Source: Packaged Facts.

Table 2-7: U.S. Soup Marketers and Their Brands: By ProductType, 1996 Marketer/Division/Category Brands (N-R)(Forty- Three CompaniesListed)

N.K. Hurst Canned Hurst HamBeens Dry Hurst HamBeens

RJRNabiscoHoldings Nabisco Foods Group Broths, etc College Inn

Nagatanien-Honpo Dry Nagatanien

NalleysFine Foods Canned Nalleys

NaturalValue Canned Natural Value Dry Natural Value

Nestle Nestle Dry Maggi Cuisine Francaise Nestle USA Broths, etc Maggi Dry Maggi Nestle Frozen /Refrigerated Food Co. Frozen/ Refrigerated Stouffer's

NewAtlanticFoods Frozen/ Refrigerated Northeast Harbor

New WestBaking Dry Kaplan's

NextGenerationFoods Canned Next Generation, Next GenerationChildren'sFare

Nile Hunter Dry Oriental Noodle, Quick & Natural

NishimotoTrading Broths, etc Shirakiku Dry Gusto Mio Frozen/ Refrigerated Shirakku

NissinFoods USA Dry Nissin, Nissin Cup Cuisine, Nissin Cup O Noodles, Nissin Mug Noodles, Nissin Ramen Classic, Nissin Top Ramen, Nissin Top Ramen Oodles of NoodlesNong Shim

Dry Nong Shim

Now NaturalFoods Dry Now

Oak GroveSmokehouse Dry Oak Grove Smokehouse

Olde CapeCodProducts Canned Olde Cape Cod, Olde Cape Cod Nantucket'sBest

OrganicFoods Canned Organic Foods

OrientTrading Dry Orient Chef, Souper, Souper Noodles

OsemInter-national Broths, etc Osem Dry Osem, Osem Gourmet Cuisine

OuterbridgePeppers Canned Outerbridge's Original Bermuda Classics

PT IndofoodInter-national Dry Healthy Chef, Indomie

PacificFoodsof Oregon Dry Chef's Classics

Packing &Preservation Dry Croyden House

PanolaPepper Dry Panola

Pastene Broths, etc Pastene

PatersonSoupworks Frozen/ Refrigerated Tabatchnick

Petrofsky'sBakeryProducts Frozen/ Refrigerated Bernard's

PhilipMorris Kraft USA Broths, etc Kraft, Kraft Food Service, Kraft Food Service Premier, Kraft Food Service Prestige

Phillips Canned Phillips

PlantainProducts Dry Chifles

Polfoods Broths, etc Krakus

ProducePartners Dry Produce Partners

Pro-FacCooperative Comstock Michigan Fruit Canned Mariner Cove

ProvimiVeal Dry Glace de Veau de Provimi

PurelyAmerican Canned Purely American

Quaker Oats Golden Grain Macaroni Dry Golden Grain Nile Spice Dry Nile Spice

Pritikin Systems Broths, etc Pritikin Canned Pritikin

R.M.K. Dry Mom's

R.S. Porter Dry Jack Rabbit

Ragin'Cajun Foods Dry Ragin' Cajun

Reese'sFiner Foods Canned DaVinci, Tyling Dry Tyling

RichmaidIce Cream Dry Women's Bean Project

Rienzi& Sons Canned Rienzi

RuthiesFoods Frozen/ Refrigerated Ruthies

Source: Packaged Facts.

Table 2-7: U.S. Soup Marketers and Their Brands: By ProductType, 1996 Marketer/Division/Category Brands (S-Z)(Fifty-Four CompaniesListed)

SWBDistribution Canned Streit's Dry Streit's

Sadaf Foods Dry Sadaf

SaharaNaturalFoods Dry Casbah, Couscous Cup

Salad Time

Farms Canned Salad Time

Sam YangFoods Dry Sam Yang, Sam Yang Ramen

SanFranciscoSpice Dry Perfect Recipe

San JirushiInter-national Dry San Jirushi

SandozHolding Gerber Poultry Broths, etc Gerber's Poultry Farms

Sara Lee Jimmy Dean Foods Frozen/ Refrigerated RB Rice Sweet Sue Kitchens Broths, etc Sweet Sue

Sea WatchInter-national Canned Captain Fred's

SecretGarden Dry Secret GardenSherwoodGroup Dry Soup du Jour

Sierra Spice Canned Sierra Spice

SilveradoFoods Dry Silverado Valley

Slim FastFoods Dry Ultra Slim Fast

Smithfield Smithfield Hame Canned Harris, Hilton's Frozen/

Refrige- rated Garden William- sburg Canned Peanut Shop of Williamsburg

Soparind Real Fresh Canned Anderson's

SouperiorBean &Spice Dry Souperior Bean Co.

SouthernFoods Dry King's, King's Original

SouthernSeasonings Broths, etc Bootsies Canned Bootsies Dry Bootsies

The SpiceHunter Canned The Spice Hunter Dry The Spice Hunter

Spice TimeFoods Broths, etc Spice Time

St. Ours Broths, etc St. Ours

StockmeyerExp Canned Stockmeyer

StockpotSoups Frozen/ Refrigerated Northern Cove, Stockpot

Sysco Broths, etc Imperial, Sysco

Canned Sysco

Take Stock Frozen/ Refrigerated Take Stock

Tanimura& Antle Frozen/ Refrigerated Broccoli Time

ToneBrothers Broths, etc Tone's

Toyo SuisanKaisha Maruchan Dry Maruchan, Maruchan Instant Lunch, Maruchan Yee Fu Mein

TraditionFoods Dry Tradition

TresClassique Dry Tres Classique

Uncle John'sFoods Dry Uncle John's

Unilever Thomas J. Lipton Broths, etc Lipton, Oxo Dry Lipton, Lipton Cup-A-Soup, Lipton Kettle Creations, Lipton Lite Cup-A-Soup, Lipton Recipe Secrets,Lipton SoupSecrets

Union Dry Smack Cup A Ramen, Smack Ramen

Uwajimaya Broths, etc Sun Luck Dry Sun Luck

Venice MaidFoods Broths, etc Venice Maid Canned Venice Maid

ViennaSausage Canned Bistro

Vitarroz Broths, etc Vitarroz Dry Vitarroz

VitasoyInter-national Azumaya Frozen/ Refrigerated Azumaya

VogueCuisine Broths, etc Vogue

WJ Clark Dry Bean Cuisine

Wegman's Canned Wegman's Fisherman's

Wessex Fare Canned Kylin, Wessex Fare

West Grocers Canned Tia Anita

WestfieldFoods Dry MilliesWestlamFoods Dry Evans

WilliamsWest &Witt's Broths, etc Williams West & Witts

Will-PakFoods Dry Taste Adventure

Wine &Schulz Broths, etc Judy Ann Dry Judy Ann, Paldo

WinterGardenSalad Canned Winter Garden Salads Frozen/

Refrigerated Carry Out Cafe, Winter Garden

WorthmoreFoodProducts Canned Worthmore

YaohanJapan Sakura Noodle Frozen/ Refrigerated Chikara

Zatarain's/E-IIHoldings Dry Zatarain's

Source: Packaged Facts.

Table 2-8: Share of U.S. Soup Market Sales: Top Ten Marketers,1995 (percent); Marketers: Top Ten Companies, Other

Market Bouillon/ BrothMarketer Share Canned Dry Refrigerated

Campbell Soup 59.6% x x x _Grand 7.5 x _ x _Metropolitan/PillsburyPrivate Label 5.7 x x x xUnilever/Thomas J. 4.7 _ x x _LiptonConAgra/Hunt- 3.1 x _ _ _WessonNissin Foods USA 3.0 _ x _ _Toyo Suisan 2.9 _ x _ _Kaisha/MaruchanCPC 2.6 x x x xInternational/VariousBorden 2.5 x x x _RJR NabiscoHoldings/ Nabisco Foods 1.4 _ _ x _GroupOthers 7.0 x x x x

Sources: Information Resource, Inc's InfoScan; PackagedFacts.This material used with permission.

Table 2-9: Share of U.S. Canned Soup Market: Top 10 Marketers,1994-1995 (percent); Marketers: Campbell Soup, Grand Metropolitan,ConAgra, Health Valley Nature Foods, Hormel Foods, Manischewitz Food

Share of Market Sales GrowthMarketer/Division 1995 1994 1994-1995

Campbell Soup 76.6% 76.7% 2.3%Grand 10.7 11.0 -0.2Metropolitan/PillsburyPrivate Label 5.8 5.7 3.6ConAgra/Hunt-Wesson 4.5 3.9 19.2Health Valley Nature 0.7 0.8 -11.9FoodsHormel Foods 0.3 0.3 -0.1Manischewitz Food 0.2 0.2 3.1Quaker Oats/Various 0.2 0.2 -11.3Soparind/Real Fresh 0.1 0.1 -3.4Baxter's of Speyside 0.1 0.1 25.2Other Marketers 0.8 1.0 2.5Total 100.0% 100.0% 2.7%

Sources: Information Resources Inc.'s InfoScan: PackagedFacts. This material used with permission.

Table 2-10: Share of U.S. Dry Soup Market: Top 10Marketers, 1994-1995 (percent); Marketers: Unilever,Nissin Foods USA, Toyo Suisan Kaisha, CPC International

Share of Market Sales GrowthMarketer/Division 1995 1994 1994- 1995

Unilever/Thomas J. 26.2% 25.9% 5.4%LiptonNissin Foods USA 16.5 16.2 5.8Toyo Suisan 15.8 15.4 6.6Kaisha/MaruchanCPC 9.9 11.4 -9.9International/VariousCampbell Soup 7.4 6.9 11.6Private Label 5.8 5.7 4.8Quaker Oats/Various 3.2 2.9 13.8Borden/Various 2.7 3.0 -6.0N.K. Hurst 1.8 2.2 13.8Union 1.7 1.7 1.6Other Marketers 9.0 8.7 6.9Total 100.0% 100.0% 3.8%

Sources: Information Resources Inc.'s InfoScan: PackagedFacts.This material used with permission.

Table 2-11: Share of U.S. Market for Broths, Bouillons, andSoup Starters: Top 10 Marketers, 1994-1995 (percent); Marketers:Campbell Soup, Borden, RJR Nabisco, CPC International, Hormel Foods

Share of Market Sales GrowthMarketer/Division 1995 1994 1994- 1995

Campbell Soup 37.2% 37.0% 4.1%Borden 21.8 22.6 -1.4RJR Nabisco/Nabisco 12.4 12.5 2.6Foods GroupCPC 7.6 7.5 4.2International/VariousPrivate Label 5.2 5.1 4.8Hormel Foods 4.6 5.0 -3.3Sara Lee/Sweet Sue 3.2 3.0 14.4KitchensNestle/Nestle USA 1.0 1.0 7.5Grand 0.6 0.5 23.0Metropolitan/PillsburyGoya Foods 0.6 0.5 14.2Other Marketers 5.8 5.3 12.8Total 100.0% 100.0% 3.2%

Sources: Information Resources Inc.'s InfoScan: PackagedFacts.This material used with permission.

Table 2-12: Share of U.S. Market for Frozen/RefrigeratedSoups: Top 10 Marketers, 1994-1995 (percent); Marketers: Bob EvansFarms, Ivories, Stockpot Soups, Winter Garden Salad, Yaohan Japan

GrowthMarketer/Division 1995 1994 1994-1995

Private Label 31.3% 40.6% -11.1%Bob Evans Farms 25.5 11.0 167.9Ivars 6.6 6.2 24.0Stockpot Soups 6.3 7.5 -2.4Winter Garden Salad 4.9 3.0 86.6Yaohan Japan/Sakura 4.1 4.6 2.0NoodleMoonlite BBQ Inn 2.8 3.4 -4.0Hanover Foods/Spring 2.5 0.5 449.3

GlenVitasoy 1.4 1.4 11.4International/AzumayaPaterson Soupworks 1.1 0.7 78.2Other Marketers 13.5 21.1 -26.1Total 100.0% 100.0% 15.4%

Sources: Information Resources Inc.'s InfoScan: PackagedFacts.This material used with permission.

Table 2-13: Share of U.S. Canned Soup Market: Top 10 Brands,1994-1995 (percent); Brands: Campbell Original, Campbell Chunky,Campbell Healthy Request, Progresso, Campbell Home Cookin'

Share of Market Sales GrowthBrand/Marketer 1995 1994 1994-1995

Campbell's Original/Campbell 48.8% 48.1% 3.7%SoupCampbell's Chunky/Campbell 11.7 12.2 -1.4SoupCampbell's Healthy 8.5 8.2 6.2Request/Campbell SoupProgresso/Grand Metropolitan 8.4 8.8 -2.2Campbell Home Cookin'/Campbell 7.2 7.5 -1.8SoupHealthy Choice Thick and 3.1 3.0 2.7Hearty/ConAgraProgresso Healthy 2.3 2.1 9.6Classics/Grand MetropolitanHealthy Choice/ConAgra 0.9 0.3 253.8Health Valley/Health Valley 0.7 0.8 -11.7NatureHealthy Choice 0.5 0.5 -3.8Traditional/ConAgraOther 7.9 8.5 0.0Total 100.0% 100.0% 2.7%

Sources: Information Resources Inc's InfoScan: PackagedFacts.This material used with permission.

Table 2-14: Share of U.S. Dry Soup Market: Top 10 Brands,1994-1995 (percent); Brands: Lipton Recipe Secrets, Maruchan, Nissin CupO Noodles, Nissin Top Ramen, Knorr, Maruchan Instant Lunch

Share of Market Sales GrowthBrand/Marketer 1995 1994 1994-1995

Lipton Recipe Secrets/Unilever 12.8% 13.4% -0.8%Maruchan/Toyo Suisan Kaisha 9.0 8.4 11.3Nissin Cup O Noodles/Nissin 8.3 8.4 2.4Nissin Top Ramen/Nissin 7.8 4.5 80.2Knorr/CPC International 7.1 6.5 13.5Maruchan Instant Lunch/Toyo 6.8 7.0 0.9Suisan KaishaLipton Soup Secrets/Unilever 5.0 5.0 4.1Lipton Cup-A-Soup/Unilever 4.0 5.0 -18.0Lipton Kettle 3.7 1.5 154.1Creations/UnileverCampbell's/Campbell Soup 3.7 4.6 -15.7Other 31.8 35.7 -8.9Total 100.0% 100.0% 3.8%

Sources: Information Resources Inc.'s InfoScan: PackagedFacts.This material used with permission.

Table 2-15: Share of U.S. Market for Broths, Bouillons, andSoup Starters: Top 10 Brands, 1994-1995 percent); Brands: Swanson,College Inn, Wylers, Campbell, Knorr, Swanson Natural Goodness, Herb-Ox

Share of Market Sales GrowthBrand/Marketer 1995 1994 1994-1995

Swanson/Campbell Soup 17.8% 17.7% 4.2%College Inn/RJR Nabisco 12.5 12.6 2.6Wyler's/Borden 12.2 13.0 -2.8Campbell's/Campbell Soup 11.5 12.2 -2.4Knorr/CPC International 7.3 7.2 3.8Swanson Natural 6.2 5.3 21.2Goodness/Campbell SoupHerb-Ox/Hormel Foods 4.7 5.0 -3.3Borden Soup Starters/Borden 4.7 4.5 7.5Sweet Sue/Sara Lee 3.4 3.0 14.4Steero/Borden 2.0 2.1 -2.9Other 17.7 17.4 5.0Total 100.0% 100.0% 3.2%

Sources: Information Resources Inc.'s InfoScan: PackagedFacts.This material used with permission.

Table 2-16: Prices of Selected Brands of Dry Soup: Per Pound,Per Package, and Per Serving, 1996 dollars); Product: Health Valley SoupIn A Cup, Nissin Cup Noodles, Knorr Swiss, Lipton Cup-A-Soup

Price

Product Servings Per Per Per Pound Package Serving

Health Valley Soup In A 2 $15.33 $1.59 $0.80CupNissin Cup O Noodles 3 4.74 0.67 0.22Knorr Swiss 3 11.20 1.89 0.63Lipton Cup-A-Soup 4 12.36 1.39 0.35Lipton Recipe Secrets 5 13.24 1.49 0.30Lipton Soup Secrets 6 6.06 1.59 0.27Campbell 5 4.05 1.29 0.26Nissin Top Ramen 2 1.33 0.25 0.13

Source: Packaged Facts

Table 2-17: Selected New Soup Products, 1995-1996Marketer/Brand/Line Category Product (A-F)(Seventeen Companies Listed)

Andy Boy Quick Cook/Produce Based Dry Minestrone

ArrowheadMills Arrowhead Mills/ Organically Produced 7 Beans & Barley Dry Indian Curry, French Country Herb, Homestyle

Blue BayouKitchen Superior Touch/Better Than Bouillon Broth/ Bouillon Beef; Chicken; Vegetable; Chili

Borden Mrs. Grass Dry Onion Recipe, Soup & Dip Mix - Low Sodium Borden Soup Starter Homestyle Broth/ Bouillon Chicken with White and Wild Rice

Snow's Canned Chicken Noodle; Hearty Chicken; Rotisserie Seasoned Chicken Wyler's/ Reduced

Sodium Broth/ Bouillon Beef Bouillon; Chicken Bouillon

BryanFoods Alabama "Country Hits" Canned Vegetable Beef Soup

CampbellSoup Campbell's Chunky Canned Spicy Chicken and Vegetables; Savory Chicken with Rice

Campbell's Condensed Canned Cream of Potato; Fiesta Chili Beef; Fiesta Nacho Cheese; Southwest Style Chicken Vegetable; California Style Vegetable; Fiesta Tomato

Campbell's Healthy Canned Cream of Request Chicken & Broccoli; Hearty Pasta & Vegetables; Hearty Chicken Noodle; Hearty Chicken Rice; Hearty Chicken Vegetable

Campbell's Home Cookin' Canned Harborside Vegetable; Salsa Bean

Campbell's Canned Cream of Celery; Reduced Fat Cream of Mushroom; Cream of Chicken

Campbell's Dry Santa Fe Style Black Soupsations Bean; Mexican Style Beans & Rice; New Orleans Style Gumbo; Noodles & Vegetables with Chicken Broth; Hearty Lentil; Tomato Vegetable Soup with Noodles

Swanson Broth Oriental Broth

ColonialWilliams-burg Colonial Canned King's Arms Tavern Williamsburg Peanut Soup; Captain Rasmussen's Clam Chowder

ConAgra Healthy Choice Canned Cream of Mushroom; Cream of Chicken with Vegetables

Cook-In-The-Kitchen Cook-In-The-Kitchen Dry Welsh Potato; Harvest Garden; Dilled Tomato; Farmhouse Cheddar

D'AlterioFoods Healthy Cuisine/ Organic Vegetarian Canned Minestrone Milanese; Pasta Fagioli Tuscany

Dan'lWebster Dan'l Webster Inn/Cape Clam Chowder Frozen/ Refrig- erated Lobster; Clam

DesertGardensChili& Spice Desert Gardens Dry Green Chili Stew Mix

EpicureanInter-national Thai Kitchen/ Heat & Serve Canned Hot & Sour; Coconut Ginger; Green Curry with BasilEuroo-Direct Gundelshim Canned Ready to Serve Soup

FairExchange Shari's Bistro/ Organic Gourmet Canned Spicy French Green Lentil; Mexican Bean Burrito; Indian Black Bean and Rice; Italian White Bean with Herb

Shari's Bistro/ Organic Canned Green Plains Split Pea

FantasticFoods

Fantastic/Instant Soup Club Dry Black Bean Salsa Couscous; Creole Vegetable Couscous; Sweet Corn Couscous; Nacho Cheddar Couscous Fantastic/Ramen Noodle Dry Vegetable Curry; Vegetable Miso; Vegetable Tomato; Chicken FreeFrontierSoups Frontier Dry New England Seaport Fisherman's Stew

Source: Packaged Facts

Table 2-17: Selected New Soup Products, 1995-1996Marketer/Brand/Line Category Product (G-O)(Eighteen Companies Listed)

GingerbearHouse Mama Osa's Dry Southwestern Chicken Soup

Goodman'sMatzohProducts Goodman's Quick & Hearty Dry Chicken Style with Real Egg Noodles

GrandMetro-politan Progresso Pasta Soup Dry Hearty Minestrone & Shells; Tomato Tortellini; Hearty Vegetable & Rotini Progresso/Ready to Serve Canned Chicken Noodle; Hearty Chicken; Rotisserie Seasoned Chicken Hain Pure Foods Healthy Naturals Canned Wild Rice; Black Bean; Mushroom Barley; Vegetarian Lentil; Vegetarian Lentil No Salt Added; Vegetarian Split Pea; Vegetarian Split Pea No Salt Added Hain Pure Foods Healthy Naturals Broth Vegetable Broth; Vegetable Broth No Salt Added

Hain Pure Foods Home Style Naturals Broth Chicken Broth; Chicken Broth No Salt Added

Hain Pure Foods Home Style Naturals Canned Chunky Tomato; Cream of Mushroom; Chicken Noodle; Chicken Noodle No Salt Added

Hain Pure Foods International Naturals Canned Tortellini Primavera; Chicken Burrito; Ravioli Pomodora; Hot & Sour

Harmon'sGourmet Harmon's Gourmet California Treats Dry Country Chicken; Chalupa; Split Pea; Navy Bean

HealthValleyNatureFoods Health Valley Dry Spicy Beans with Couscous; Zesty Western Black Bean with Rice & Cilantro; Chicken Noodle; Manhattan Corn Chowder; Lentil with Couscous; Pasta Italiano; Creamy Potato Broccoli Chowder; Green Garden Split Pea

Health Valley/ Pasta Soup Canned Rotini & Vegetables; Pasta Fagioli; Pasta Primavera; Pasta Cacciatore; Pasta Bolognese; Pasta RomanoH.J. Heinz Heinz/Deli Cup Soup Dry Garden Vegetable; Hearty Vegetable Beef; Minestrone; Italian Tomato with Pasta

HASMarketing Savion/ International Soup Mix Dry Chili Style Mexican; Rice & Bean Spanish; Szechuan Vegetable

Oriental; Pasta Pagioli Italian

HormelFoods House of Tsang/ Oriental Noodle Soup Dry Oriental Noodle Soup Cantonese Chicken; Moo Good Mushroom; Spring Vegetable

KosherDesserts Kojel Dry Soup Bowl Cabbage

LegumesPlus Legumes Plus Canned Country Vegetable Lentil; Wagon Wheel Lentil; Pasta-Pasta Lentil

ManischewitzFoods Manischewitz/ Homestyle Soup Mix Dry Mediterranean Black Bean; 18 Bean; White Bean & Pasta

Manischewitz Bottled Borscht with Shredded Beets

Manischewitz Passover Gold Dry Hearty Potato; Vegetarian Tomato

N.K. Hurst

Hurst Dry Pasta Fagioli Low Fat Hearty SoupNaturalValue Natural Value Canned Chicken Broth - Salted; Unsalted Dry Soup Cup - Chicken Vegetable; Santa Fe Rice & Beans; Couscous Lentil; Split Pea; Black BeanNewAtlanticFoods Northeast Harbor Frozen/ Refrigerated Shrimp Bisque; Clam Chowder

NextGenerationFoods Next Generation Canned Onion; Santa Fe Style Bean; Classic Tomato; Mushroom; Broccoli

Next Generation Children's Fare Canned Pasta Stars and Stripes in Chicken Broth

NowNaturalFoods Now Dry Vegetable

OrganicFoods Organic Foods Canned Tomato Sunrise; Four Beans & More; Lentil Supreme; Sweet Potato & Carrots; Potatoes & LeeksOuterbridgePeppers Outerbridge's Original Bermuda Classics Canned Fish Chowder; Bermuda Onion; Vichyssoise; Tomato Bisque with Wild Fennel; Corn & Crab Chowder

Source: Packaged Facts

Table 2-17: Selected New Soup Products, 1995-1996Marketer/Brand/Line Category Product (P-Z)(Twenty Two Companies Listed)

PacificFoods ofOregon Chef's Classics/ Dry Black Bean; Creamy Low Fat Mushroom; Vegetarian Chili; Savory Lentil & Rice; Broccoli & Cheese; Chicken Noodle; Split Pea; Minestrone; Potato Chowder; Mexican Pinto Beans & Rice; Curried Lentils & Rice; Italian Navy Beans & Rice; Italian Tomato; Cajun Red Beans & Rice; Caribbean Black

Beans & Rice

ProvimiVeal Glace de Veau de Provimi Dry Reduced Veal Stock

PurelyAmerican Purely American Canned St. Augustine Spanish Bean Soup

Quaker Oats Nile Spice Dry Harvest Vegetable; Potato Leek; Curry Lentil & Rice; Tomato Herb; Black Bean Salsa

R.S. Porter Jack Rabbit Dry 16 Bean/Ham; 16 Bean/Cajun

RuthiesFoods

Ruthies Frozen/ Refrigerated Split Pea Soup

SWBDistri-bution Streit's/ Instant Farfel Soup Dry Garden Vegetable; Chicken

SadafFoods Sadaf Dry Home Style Vegetarian Soup Mix - Noodle Vegi; Yogurt Vegi; Barley & 7 Beans; Pomegranate

SaharaNaturalFoods Casbah Teapot Dry Black Bean; Sweet Corn Chowder; Split Pea; Vegetarian Chili; Potato Leek; Santa Fe Rice & Beans; Milano Minestrone; Lentil; Chicken Noodle; Garden Couscous; Venice MinestroneSanFranciscoSpice Perfect Recipe Organics Dry Potato Leek; Curry Beans & Rice; Chicken Free Pasta; Tomato Pasta; Pesto Pasta; Vegie

Vegan Couscous; Minestrone Couscous; Lentil

Slim FastFoods Ultra Slim Fast Canned Vegetable Bean; Minestrone; Split Pea; Lentil; Spicy Chili Bean

SouthernFoods King's Dry Navy Bean; Split Pea

SouthernSeasonings Bootsies South Louisiana Cooking Dry Cajun Style White Beans with Seasoning and Vegetables

SpiceHunter Spice Hunter/ Oriental Noodle Soup Dry Spicy Thai Noodle; Creamy Thai Noodle

Take Stock Take Stock Frozen/ Refrig- erated Fish Stock

Tanimura& Antle Broccoli Time Frozen/ Refri- gerated Cream of Broccoli Soup

TresClassique Tres Classique/ Garden Meals Dry Neapolitan; Tuscany; Southwestern

UncleJohn'sFoods Uncle John's Dry London Fog Pea Soup

Unilever Oxo Broth Beef Bouillon Cubes

Vienna

Sausage Bistro Canned Beef Chili; New England Clam Chowder; Stockpot Vegetable; Broccoli & Cheese; Wild Rice with Chicken; Corn Chowder; Mama's Chicken Noodle; Black Bean with Sausage; Savory Chicken Dumpling; Cream of Turkey; Italian Wedding

W.J. Clark Bean Cuisine Dry Ultima Pasta E Fagioli; White Bean Provencal; Thick As Fog Split Pea; Santa Fe Corn Chowder; Island Black Bean; 13 Bean Bouillabaisse

Wegman'sFoodMarket Wegman's Fisherman's Wharf Canned New England Style Clam Chowder

Source: Packaged Facts

Table 2-18: Stability of Retail Outlet Shares of U.S. SoupMarket, 1994 vs. 1990 (percentage points); Outlets: Supermarkets, OtherGrocery, and Other Stores; Soups: All, Canned, Dry Mixes, and Bouillon

OutletSoups Supermarkets Other Other Grocery Stores

All Soups 0.5 0.2 - 0.7Canned 0.9 0.2 - 1.1Dry Mixes - 0.3 _ 0.3Bouillon - 0.9 - 0.2 1.1

Sources: Supermarket Business; Packaged Facts.This material used with permission.

Table 2-19: Incidence of Soup Use by Product Category: By Ageof Principal Shopper, 1994 (percent); Category: Canned Soup and Broth,Dry Soup and Bouillon; Age Group: 18-24, 25-34, 35-44, 45-54, 55-64, 65+

Canned Soup & Dry Soup & Broth Bouillon

Age Group All Heavy All Heavy

Users Users Users Users

18-24 71.0% 21.8% 25.4% 4.6%25-34 76.6 21.5 37.8 11.235-44 78.0 24.2 43.5 13.045-54 79.2 22.9 46.5 12.455-64 79.9 23.8 41.0 9.965+ 77.6 21.3 36.3 8.8

Source: Simmons Market Research Bureau.This material used with permission.

Table 2-20: Incidence of Use of Selected Dry Soup Brands: ByLevel of Education of Principal Shopper, 1994 (percent); Brands:Lipton's Soup Mix, All Knorr, Lipton's Cup-A-Soup, Nissin

Brand of Soup

Share Lipton's Lipton's Campbell's of Soup Cup-A- Cup Shopping Mix All Soup Instant Hor- Population Knorr Nissin Soup Herb-Ox

EducationLevelPrincipal 100.0% 9.7% 7.3% 7.0% 5.8% 5.5% 5.7%ShoppersGraduated 19.7 7.6 9.9 7.0 5.6 5.3 7.8CollegeAttended 20.6 8.9 8.5 7.2 5.4 5.0 6.5CollegeGraduated 39.6 12.2 6.6 7.9 5.7 6.2 5.5H.S.Not a H.S. 20.1 7.9 5.2 5.2 6.4 4.9 3.2Grad.

Source: Simmons Market Research Bureau.This material used with permission.

Table 2-21: Incidence of Use of Selected Soup Types: ByEmployment Status of Principal Shopper, 1994 (percent) Factor: Use BrothOnly, College Inn Broth, Swanson's Broth, Dried Soup, Heavy Dried Soup

Type of Use

Share Use College Use Heavy Use of Broth Inn Swanson Dry Dry LunchEmployment Shopping Only Broth Broth Soup Soup Soup Population MixStatus

Principal 100.0% 5.3% 6.8% 7.8% 39.7% 10.7% 5.4%ShoppersFull Time 48.9 3.4 6.1 6.8 39.2 10.4 6.0Part Time 8.4 3.0 6.9 7.4 46.3 13.0 5.3Not 42.7 7.9 7.7 9.2 39.0 10.6 4.7Employed

Source: Simmons Market Research Bureau.This material used with permission.

Table 2-22: Incidence of Use of Selected Soups: By HouseholdIncome of Principal Shopper, 1994 (percent); Soup: Canned(Non-Campbell's), Non-Condensed, Progresso, Campbell's Home Cookin'

All Household Income (In Thousands)

Shoppers $40+ $39.9- $29.9- $19.9- < $10Factor $30 $20 $10

Share of 100.0% 39.3% 14.2% 15.8% 17.7% 13.0%ShoppingPopulationCanned Soup Condensed 11.3 13.6 14.1 11.1 6.4 8.0(Non-Campbell) Non- 30.7 28.2 29.5 29.0 33.9 37.1Condensed Progresso 10.5 12.7 10.8 8.8 8.6 8.1Brand Campbell's 15.7 14.8 17.4 15.1 15.6 17.3Home Cookin'Broth Use Broth 29.4 35.7 29.5 27.6 23.5 20.6 Use Only 5.3 4.2 6.4 4.7 6.0 7.0Broth Campbell's 7.7 9.0 7.3 8.1 6.5 5.5Condensed College Inn 6.8 8.5 6.1 5.1 6.0 5.8 Swanson 7.8 8.3 8.7 7.8 7.1 6.6Dry Soup: Use Dry 39.7 47.7 39.1 35.6 34.3 28.4Soups Bouillon 23.7 30.6 22.7 20.2 19.4 13.9Cubes/Broth Pdr Instant Mix 17.2 21.7 17.5 14.3 13.6 11.5 Soup Mix 10.7 13.5 10.3 10.0 9.1 6.0(Needs Cooking) Knorr Brand 7.3 9.5 6.3 5.2 6.7 5.4(All) Herb-Ox 5.7 7.7 5.3 5.1 3.9 3.2 Campbell's 5.5 5.6 4.3 5.5 6.7 5.0Cup of Soup Non- 11.6 16.1 13.1 8.9 6.8 6.5

Campbell'sInstant Non- 10.1 14.0 11.1 6.2 7.0 6.4Lipton's Cup-A-Soup All Nissin 5.8 6.5 4.8 4.7 6.6 4.7Dried Soups

Source: Simmons Market Research Bureau.This material used with permission.

Table 2-23: Incidence of Use of Dry Soup Forms: By Occupationof Principal Shopper, 1994 (percent); Occupation: Professional/Managerial,Technical/Clerical/Sales, Precision/Craft

Occupation

Technical/ Shopping Professional/ Clerical Precision/ Population Managerial Sales Craft OtherSoup Form

Share of Shopping 100.0% 16.7% 20.2% 4.0% 16.4%PopulationDry Soup 39.7 46.3 42.3 31.0 33.7Dry Bouillon or 23.7 30.0 24.4 17.4 19.1BrothInstant Soup Mix 17.2 20.9 20.6 13.4 15.2Soup Mix 10.7 12.9 10.9 6.5 7.8(RequiresCooking)Lunch Mix 5.4 6.5 5.9 2.5 6.0

Source: Simmons Market Research Bureau.This material used with permission.

Table 2-24: Incidence of Use of Selected Soup Forms: ByRegion, 1994 (percent); Region: Northeast, Midwest, South, and West;Soup Forms: Canned Products and Dried Products

Principal Region ShoppersSoup Form Northeast Midwest South

Share of Shopping 100.0% 20.0% 24.3% 35.8% 20.0%PopulationCanned Products Heavy Users 22.6 19.5 26.0 23.4 20.2 Both Soup & 24.2 26.8 26.2 20.3 25.9

Broth Soup Only 48.1 41.5 53.7 50.1 44.2 Broth Only 5.3 6.3 4.6 4.7 5.9Dry Products All Dried 39.7 39.6 44.5 34.7 43.0Soups Bouillon and 23.7 22.9 29.5 20.4 23.4Broths Soup Mix 10.7 11.9 12.4 8.6 11.4(RequiresCooking) Lunch Mix 5.4 5.3 3.9 4.4 9.1

Source: Simmons Market Research Bureau.This material used with permission.

Table 2-25: Incidence of Use of Selected Soups: By FamilyLife-style, 1994 Soup: Canned (Condensed, Broth Only) and Dry (Cubes,Instant, Soup Mix); Lifestyle: Parental Status, Number in Hom

Canned Products Dry Products

Share Con- Broth Soup of densed Only All Heavy Cubes Instant MixLife-style Shoppers Heavy

Principal 100.0% 22.6% 46.8% 5.3% 39.7% 10.7% 23.7% 17.2% 10.7%ShopperParentalStatus 33.5 24.7 51.9 3.9 44.0 13.1 26.9 20.7 12.2Parents Non- 66.5 21.6 44.3 5.9 37.6 9.5 22.1 15.4 10.0ParentsNumber inHome One 20.1 18.2 40.1 7.5 29.5 6.6 16.8 !2.6 7.2 Two 34.1 21.3 47.1 5.7 40.9 10.3 24.7 16.2 10.4 Three 34.5 25.1 48.9 4.1 42.8 12.1 25.5 19.6 11.6or Four Five 11.3 26.9 51.4 3.6 44.9 15.0 27.3 20.8 15.5or MoreAges ofChildren No 63.0 21.0 44.5 6.1 37.7 9.6 22.4 15.3 10.1Children Under 6.5 24.8 46.9 6.4 40.3 9.9 23.9 18.3 10.92 Years 2 to 5 14.5 26.5 48.5 4.1 40.8 12.7 24.6 18.7 11.8 6 to 18.2 25.7 52.0 2.7 42.9 13.6 26.7 20.0 12.2 11 12 to 16.2 26.6 52.9 4.2 46.7 14.7 28.0 21.1 12.7 17

Source: Simmons Market Research Bureau.This material used with permission.

Table 2-26: Incidence of Use of Selected Canned Soup: ByEthnic Background, 1994 (percent); Ethnicity: White, African-American,and Others; Soup: Heavy Canned, Non- Condensed, Campbell's Chunky

Ethnic Background

Principal African - Shoppers White American OtherSoup

Share of Shopping 100.0% 84.8% 12.1% 3.1%PopulationCanned Products Heavy Users 22.6 22.0 26.9 24.1 Non-Condensed 30.7 29.6 38.9 29.9Only Campbell's 19.5 19.0 22.3 23.7Chunky Campbell's 15.7 15.2 19.4 13.2Home Cookin' Broth Only 5.3 5.1 6.2 6.0

Source: Simmons Market Research Bureau.This material used with permission.

Table 2-27: Demographic Characteristics Favoring Canned SoupUse: By Soup Category, 1994 Users: Heavy Soup/Broth, Soup, Soup Only (NoBroth), Ready-to Serve, Condensed Soup; Factor: Age, Education

Heavy Soup Soup Soup/Broth Users OnlyDemographic Users (No Ready-to- Condensed Broth) Serve SoupFactor Users Users Users

Age _ _ _ _ _

Education Not H.S. _ _ College _ Grad Grad

Employment _ _ _ _ _

Occupation Prec/Craft _ _ Tech/Sales _

Family _ _ _ _ Married;Status Parents

Race African- _ _ _ _ American

Region Midwest Midwest Midwest _ Midwest

Locality Rural _ Rural _ _

HouseholdIncome Under _ _ $50+ $40-$60(000) $10

HouseholdSize(No. of 3 or _ _ _ _Persons) More

ChildreninHousehold All Ages _ _ Under 2 6-17(Age)

_ means factor is not significant.Sources: Simmons Market Research Bureau; Packaged Facts.This material used with permission.

Table 2-28: Consumption and Loyalty of Selected Soup Brands,1994 (percent); Users: Sole Brand, Primary, Secondary, and LoyaltyFactor; Brand: Campbell's Condensed, Campbell's Chunky, Campbell's Home

Share of Principal Shoppers

Brand Users Sole Primary Secondary Loyalty Brand Factor

Campbell's 35.5% 16.0% 15.1% 4.5% 45.1%CondensedCampbell's Chunky 19.5 5.7 9.2 4.6 29.2Campbell's Home 15.7 4.3 7.5 3.8 27.4Cookin'Progresso 10.5 1.6 5.2 3.7 15.2Campbell's 9.0 1.4 5.2 2.4 15.6Healthy RequestHealthy Choice 7.1 1.0 4.0 2.1 14.1SoupSnow's 2.9 0.1 1.2 1.5 3.4Swanson Soup 2.2 0.1 0.8 1.3 4.5Other Brands 12.5 4.9 5.2 2.5 39.2

Source: Simmons Market Research Bureau.This material used with permission.

Table 2-29: Demographic Characteristics Favoring Use ofSelected Campbell's Canned Soup Products, 1994 Brand: Campbell's Chunky,Campbell's Condensed, Campbell's Home Cookin', Campbell's Healthy Request

Campbell's Campbell'sDemographic Campbell's Campbell's Home HealthyFactor Chunky Condensed Cookin' Request

Age 18-24 _ 18-24 _

Education _ _ College College Grad Grad

Employment _ _ _ _

Occupation Tech/Sales; Tech/ _ Prof/Mgr Precision/ Sales Craft

Family Single Married _ _Status

Race African- _ African- _ American; American Other

Region _ Midwest _ Northeast

Locality _ Rural _ _

HouseholdIncome (000) _ _ $30-$40 $30-$75

HouseholdSize(No. of _ 5 or More _ _Persons)

Children inHousehold Under 2 2-11 Under 2 _(Age)

_ means factor is not significant.Sources: Simmons Market Research Bureau; Packaged Facts.This material used with permission.

Table 2-30: Demographic Characteristics Favoring Use ofSelected Canned Soup Brands, 1994 Brand: Healthy Choice, Progresso,Snow's; Factor: Age, Education, Employment, Occupation, Family Status

Demographic Healthy Progresso Snow'sFactor Choice

Age 45-64 55-64 35-44; 55-64

Education College Grad College Grad H.S. Grad

Employment _ _ Not Employed

Occupation Professional/ Professional/ _ Mgr Mgr; Technical/Sal es

Family Status _ _ _

Race Other _ Other

Region _ Northeast; Northeast; West West

Locality Suburban Suburban _

HouseholdIncome (000) $60-$75 $40+ $30-$75

HouseholdSize(No. of _ 1 1Persons)

Children inHousehold _ _ _(Age)

_ means factor is not significant.Sources: Simmons Market Research Bureau; Packaged Facts.This material used with permission.

Table 2-31: Demographic Characteristics Favoring Broth Use,1994 Users: All Broth, Broth Only, Both Soup and Broth; Factor: Age,Education, Employment, Occupation, Family Status, Race, Region

Demographic All Broth Broth Only Both Soup andFactor Users Users Broth

Age 45-54 65 35-54

Education College Grad Not a H.S. College Grad; Grad Attended College

Employment _ Not Employed Part Time

Occupation Professional/ _ Professional/ Mgr;Technical/ Mgr; Technical

/Sales /Sales

Family Status Married Div/Wid/Sep; Married Non-Parent

Race _ African- American; Other

Region Northeast Northeast; Northeast West

Locality Suburban Central City Suburban

HouseholdIncome (000) $40+ $30-$40; $40+ Under $20

HouseholdSize(No. of _ _ _Persons)

Children inHousehold _ No Children; _(Age) Under 2

_ means factor is not significant.Sources: Simmons Market Research Bureau; Packaged Facts.This material used with permission.

Table 2-32: Broth Brands and Consumer Loyalty, 1994 (percent);Users: Sole Brand, Primary, Secondary, and Total; Brand: Swanson'sBroth, Campbell's Condensed Broth, and College Inn

Share of Principal Shoppers Loyalty

Brand Users Sole Primary Secondary Factor Brand

Swanson Broth 7.8% 1.1% 3.5% 3.3% 14.1%Campbell's 7.7 1.0 4.3 2.4 13.0Condensed BrothCollege Inn 6.8 0.9 3.2 2.7 13.2

Source: Simmons Market Research Bureau.This material used with permission.

Table 2-33: Demographic Characteristics Favoring Use ofSelected Broth Brands, 1994 Brand: Campbell's Condensed Broth, College

Inn, Swanson's Broth; Factor: Age, Education, Employment, Occupation

Campbell'sDemographic Condensed College Inn Swanson BrothFactor Broth

Age 45-54 45-54; 65+ 55+

Education _ Attended College Grad College; College Grad

Employment _ Not Employed Not Employed

Occupation Technical/ Professional/ _ Sales; Mgr Precision/ Craft

Family Status Married _ Married

Race _ _ Other

Region West Northeast Midwest; West

Locality _ Suburban _

HouseholdIncome (000) $40+ $40+ $30-$40

HouseholdSize(No. of 2 _ _Persons)

Children inHousehold _ _ _(Age)

_ means factor is not significant.Sources: Simmons Market Research Bureau; Packaged Facts.This material used with permission.

Table 2-34: Incidence of Dry Soup Use: By Product Form,1994 (percent); Factor: Bouillon/Broth Cubes/Powder,Instant Soup Mix, Cooking Soup Mix, Instant Lunch Mix, Alland Heavy Use

Share of Principal Dry Soup Users Shoppers

All Users 39.7% Heavy Users 10.7 Bouillon/Broth

Cubes/Powder 23.7 Instant Soup Mix 17.2 Cooking Soup Mix 10.7 Instant Lunch Mix 5.4

Source: Simmons Market Research Bureau.This material used with permission.

Table 2-35: Demographic Characteristics Favoring Dry SoupConsumption, 1994 Factor: Age, Education, Employment, Occupation, FamilyStatus, Race, Region, Locality, Household Income, Household Size

Demographic All Dry Soup Heavy UsersFactor Users

Age 45-54 35-54

Education _ Attended College/ H.S. Grad

Employment Part Time Part Time

Occupation Professional/Mgr Technical/Sales

Marital Status Married Married; Parents/ Family

Race _ Other

Region Midwest West

Locality _ _

HouseholdIncome (000) $40+ $40-$60

Household Size(No. of Persons) 5 or More 3 or More

Children inHousehold (Age) 12-17 2-17_ means factor is not significant.

Sources: Simmons Market Research Bureau; Packaged Facts.This material used with permission.

Table 2-36: Consumption and Loyalty of Selected Brands of DrySoup and Bouillon, 1994

Share of Principal Shoppers LoyaltyBrand Users Sole Primary Secondary Factor

Brand

Lipton Soup Mix 9.7% 1.1% 5.4% 3.2% 11.3%Lipton Cup-A-Soup 7.0 1.2 4.4 1.5 17.1Lipton Recipe 6.3 0.6 4.3 1.4 9.5SecretsHerb-Ox 5.7 1.4 3.0 1.3 24.6Campbell's Cup 5.5 0.7 3.4 1.4 12.7InstantWyler's 5.2 1.6 1.9 1.7 30.8Knorr Bouillon 5.1 1.1 3.0 1.0 21.6Campbell's Dry 5.1 0.5 3.2 1.3 9.8Soup MixCampbell's Ramen 4.1 0.7 2.2 1.2 17.1Lipton Soup & 4.0 0.2 2.3 1.5 5.0RecipeMrs. Grass 3.4 0.3 1.7 1.4 8.8Knorr Soup & 3.2 0.4 1.9 0.9 12.5RecipeCampbell's Soup & 2.8 0.3 1.9 0.6 10.7RecipeNissin Top Ramen 2.6 0.3 1.5 0.8 11.5Campbell's Cup in 2.4 0.1 1.4 0.9 4.2a CupMaruchan Instant 2.3 0.2 1.3 0.9 8.7LunchNissin Oodles of 2.2 0.2 1.0 1.0 9.1NoodlesNissin Cup O 2.2 0.3 1.0 0.9 13.6NoodlesLipton Lots-A- 2.0 0.1 1.0 1.0 5.0NoodlesCampbell's Cup A 1.9 0.2 1.0 0.6 10.5RamenMBT 1.2 0.1 0.4 0.7 8.3Gourmet Pride 1.2 0.0 0.7 0.5 0.0Maggi 1.1 0.1 0.3 0.7 9.1Nissin Pride 0.9 0.0 0.4 0.5 0.0Nissin Supreme 0.8 0.0 0.2 0.5 0.0

Source: Simmons Market Research Bureau.This material used with permission.

Table 2-37: Demographic Characteristics Favoring Use ofDifferent Forms of Dry Soup, 1994 Form: Bouillon/Broth/Cubes/Powder,Instant Soup Mix, Cooking Soup Mix, Instant Lunch Mix; Factor: Age

Demographic Bouillon/ Broth Instant Cooking InstantFactor Cubes/Powder Soup Mix Soup Mix Lunch Mix

Age 35-54 35-54 35-44 45-54

Education College College College College Grad Grad Grad Grad; Attended College

Employment Part Time _ Part Time Full Time

Occupation Profess/Mgr Profess/Mgr; Profess/Mgr Profess/Mg Technical/ Sales

Family Married; Married; Married; Div/Wid/SepStatus Parents Parents Parents

Race _ _ Other Other

Region Midwest West Northeast; West Midwest

Locality _ _ Suburban _

HouseholdIncome (000) $40+ $40+ $40+ _

HouseholdSize(No. of 5 or More 3 or More 5 or More 3-4Persons)

Children inHousehold 6-17 6-17 6-17 Under 2;(Age) 12-17

_ means factor is not significant.Sources: Simmons Market Research Bureau; Packaged Facts.This material used with permission.

Table 2-38: Demographic Characteristics Favoring Use ofSelected Brands, 1994 Campbell's Cup Instant, Herb Ox, All Knorr, LiptonCup-A-Soup, Lipton Soup Mix, All Nissin; Factor: Age, Education,

Campbell's Lipton Lipton Cup Herb- All Cup-A- SoupDemograph Instant Ox Knorr Soup Mix All NissinFactorAge 45-54 35-44; 35-54 35-44 45-54 25-44 55+

Education HS College Colleg H.S. H.S. Not Grad Grad; Grad; Grad Grad H.S. Attended Attended Grad College CollegeEmployment _ _ _ _ Part _ Time; Not

Employed

Occupation Other Prof/Mgr Prof/Mgr Tech/ Tech/ Tech/ Sales Sales Sales

Family Div/Wid Married Married Parents Married ParentStatus /Sep

Race African- _ _ _ _ Other American

Region _ Northeast Northeast; Northeast; Northeast; West West Midwest

Locality _ Suburban _ _ _ _

Household $10-$20 $40+ $40+ $20-$30 _ $40-$75

Income(000)

HouseholdSize(No. of _ _ 5 or 3-4 5 or 3 orPersons) More More More

ChildreninHousehold Under _ Under Under 12-17 All(Age) 2 2; 2; ages 12-17 12-17

_ means factor is not significant.Sources: Simmons Market Research Bureau; Packaged Facts.This material used with permission.

Figure 2-1: Growth of U.S. Canned Soup CategoryDollar Sales vs Pound Sales. 1992-1995

1992 2.36 2.31993 2.49 2.351994 2.66 2.41995 2.73 2.411996 2.87 2.45

Source: Packaged Facts.

Figure 2-2: Growth of U.S. Dehydrates soup Category: Dolars vsPounds 1992-1996 Dollar

Sales Pound Sales

1992 612 2491993 620 2621994 652 2721995 677 2851996 700 292

Source: Packaged Facts.

Figure 2:3 Growth of U.S. Broth and Boullon Category: Dollar Sales vsPound Sales 1993-1996

1992 338 3001993 363 3291994 385 3431995 397 3541996 419 368

Source: Packaged Facts.

Figure 2-4 Share of U.S. Soup Market Dollar Sales By Category1996

Canned Soup 72.00%Dry Soup 17.50%Broth, Bouillon 10.50%

Source: Packaged Facts.

Figure 2-5: Share of U.S. Soup Market by Category: Pound vs.Dollar Sales, 1995 (percent); Categories: Canned, Dry, Broth/BouillonVolume Dollars

Broth/Bouillon 11.80% 10.50%Dry 9.40% 17.50%Canned 78.80% 72.00%

Source: Packaged Facts.

Figure 2-6: Share of U.S. Dollars Sales vs. Volume Sales:Canned Soup Styles, 1995 (percent); Styles: Condensed vs. Ready Made

Volume Dollars

Ready-Made 38.00% 44.00% Condensed 62.00% 56.00%

Source: Packaged Facts.

Figure 2-7: Share of U.S. Retail Dollar Sales of Dry Soup: BySegment, 1995 (percent); Segments: Soup Mixes, Ramens, and Soup Starters

Soup Mixes 56.00%Ramens 41.00%Soup Starters 3.00%

Source: Packaged Facts.

Figure 2-8: Share of U.S. Dry Soup Dollar vs. Volume Sales: BySegment, 1995 (percent); Segments: Soup Mixes, Ramens, and Soup Starters

Volume Dollars

Soup Starters 2.00% 3.00%Ramens 68.00% 41.00%Soup Mixes 30.00% 56.00%

Source: Packaged Facts.

Figure 2-9: Price Competition Among Selected Brands of CannedSoup, 1995 (dollars); Brands: Pritikin, Baxter's, Healthy Choice,Campbell's Chunky, Progresso, Campbell's Condensed

Campbell's Condensed 1.07Progresso 1.25Campbell's Chunky 1.47Healthy Choice 1.51Baxter's 1.9Pritikin 2.09

Sources: Information Resources, Inc.'s InfoScan; PackagedFacts.This material used with permission.

Figure 2:10 Price Competition Among Selectd Brands of DrySoups, 1995 dollars); Brands: Knorr, Lipton Cup-A-Soup, Lipton SoupSecrets, Nissin Cup O' Noodles, Campbell's, Nissin Top Ramen Oodles ofNoodles

Nissin Top Ramen Oodles of Noodles $1.00Campbell's $2.49Nissin Cup O Noodles $3.42Lipton Soup Secrets $4.84Lipton Cup-A-Soup $8.43Knorr $13.80

Sources: Information Resources, Inc.'s InfoScan; PackagedFacts.This material used with permission.

Figure 2-11: Share of U.S. Soup Market Dollar Sales: By OutletType, 1994 (percent); Outlets: Supermarkets, Other Grocery, and OtherStores

Supermarkets Other Grocery Other Stores

All 73.60% 22.40% 4.00%Canned 72.50% 24.10% 3.40%Dry 77.50% 17.10% 5.40%Bouillon 68.70% 24.20% 7.10%

Source: Supermarket Business. This material used withpermission.

Figure 2-12: Layout of Typical U.S. Supermarket Canned SoupDisplay 6 Feet

Condensed Private Label Brand B Brand A Ready- Other to-Serve Brands Brand C Healthy

Source: Packaged Facts.

Figure 2-13: Distribution of Soup Shoppers by Age Group: BySoup Category, 1994 (percent); Categories: Principal Shoppers, CannedSoup & Broth Users, Dried Soup and Bouillon Users

18-24 7. 60% 6.90% 4.80%25-34 22.30% 22.00% 21.20%35-44 22.90% 23.10% 25.10%45-54 16.40% 16.80% 19.30%55-64 12.20% 12.60% 12.60%65+ 18.60% 18.60% 17.00%

Source: Simmons Market Research Bureau.This material used with permission.

Figure 2-14 Users and Usage of Canned Soup and Broth: ByLevel of Consumption, 1994 (percent); Level: Heavy,Medium, and Light

Users of Canned Usage Share Those Soup and Broth Responsible ForUsers Are

Heavy 29.20% 57.70%Medium 44.70% 37.80%Light 26.10% 4.50%

Source: Simmons Market Research Bureau.This material used with permission.

Figure 2-15: Relation of Progresso Consumption to HouseholdIncome, 1994 (percent)

Under $10,000 8.10%$10,000-$19,999 8.40%$20,000-$29,999 8.80%$30,000-$39,999 10.80%$40,000-$49,999 12.60%$50,000-$59,999 11.20%$60,000-$74,999 12.60%$75,000 or more 14.00%

Sources: Simmons Market Research Bureau; Packaged Facts.This material used with permission.

Figure 2-16: Users and Usage of Dry Soup and Bouillon: ByLevel of Consumption, 1994 (percent); Level: Heavy, Medium, and LightUsers of Dried Soup and Bouillon Usage Share Those Users Are ResponsibleFor

Heavy 27.00% 60.70%Medium 47.90% 39.30%Light 25.10%

Source: Simmons Market Research Bureau.This material used with permission.

LA-43303 THE MARKET FOR SOUP IN EUROPE AND JAPAN

Note

This chapter, covering the market for soup in Europeand Japan, was written by an independent, European-basedanalyst.

I. THE PRODUCTS

The Products: Introduction; Price Categories; Seafood and EthnicSoups

The Products

Introduction

The popularity of eating soup in Europe has grownrapidly due to its availability, the convenience it offers,as well as for reasons of economy. Soup is a versatilefood. It can be served hot, tepid, or cold. It is seen asan appetizer, a snack, as well as a wholesome meal, andexists in a wide variety of different cuisines. Demand for soups combining nutritional value and quickpreparation along with affordable prices is strong. Thelatter factor has become especially pronounced in the wakeof the recession in most parts of Europe. Even in Japan,where consumers were less demanding and more free-spendingthan their U.S. or European counterparts, the collapse ofthe so-called "Bubble economy" has meant a more consciousconsumer, who seeks quality products at affordable prices. Differentiating soups, especially canned soups, frommost other food categories is the fact that consumersfrequently buy soups in large quantities for storage, andthe perceived durability of the product and its packaging,therefore, become important factors. Consumers also want soups to be well prepared. Intoday's market, consumers are increasingly choosy about someother aspects of what they buy. Most importantly, consumersare concerned about the freshness and health-related effectsof soup products. Nevertheless, they still require that the soup tasteexactly as what they consumed in their childhood. Thisposes a considerable challenge to soup companies. Soup companies seek to sustain the interest ofconsumers, via building brand loyalty and introducinginnovative products that catch consumers' attention andstimulate impulse buying. With several soups, including anumber of best-sellers, already used as recipe ingredients,most companies are now also positioning soups asingredients.

Most European Soups Fall into One of Two Distinct PriceCategories

Most soups in Europe can be categorized into two broadsegments, based primarily on selling price. Some soups areseen as everyday commodities and are selected and consumedalmost wholly on the basis of price. Private-label productsare making considerable inroads in this "standard soup"segment. This, since the prices of private-label soups inEurope are generally equal to or lower than the cheapestdiscounted prices of branded soups. This trend correspondsto that prevailing in the wider foods market. The other main segment consists of premium-pricedsoups, which are bought mainly and regularly by higher-income consumers. Others also buy these products, thoughthese purchases are largely impulse. This market segment

(with prices about 30% to 40% over those of standard soups)is much more sensitive to successful advertising andmarketing, along with innovative product development. Most premium soups are positioned as adult or familysoups. Examples in the United Kingdom include the Brand'sline, Baxter's Vegetarian and Tartan brands, and CampbellSoup Company's Tastes of the World. Some private-labelproducts from retailers, such as Specialty (from Tesco) andGourmet (from Sainsbury), also have a presence in thissegment. Due to the increase in competition from private labels,it is becoming increasingly untenable in Europe to createand sustain middle-rung brands (which seek to occupy theground between standard and premium). Indeed, in the UnitedKingdom it was just this positioning that led to the rapidloss of consumer awareness of Nestle's Crosse & Blackwellbrand.

Seafood-Based Soups Important in Europe and Japan

Seafood has an enduring appeal in Europe, and soupsbased on seafood have seen an increasing pace of new productintroductions. Seafood soups are found in all Europeancountries, and are part of the line of most large companies(as well as some small companies, specialized in niches). In Japan, seafoods are, of course, specially favored,given the country's fish-eating traditions. In the cannedsegment, clam chowder is a popular product. Seaweed is alsoa common ingredient in several soups.

Ethnic Soups Gain Favor

Chinese soups have long been popular in Europe, and areespecially favored by supermarket in-house manufacturers.More recently, many convenience foods categories (especiallysauces, but including soups) have been considerablyinfluenced by the cuisines of new ethnic minorities inEurope. Knorr Stir Fry Cubes, for example, are a popularproduct, available with Far Eastern and Indian seasonings.Regional cuisines too play a role in differentiating themarket. In Germany, for example, there are several soupsbased on Bavarian cuisine. Indian cuisine has a significant presence on theEuropean soup market, especially in the United Kingdom. In1991, Campbell Soup Company introduced Curried VegetableSoup. In 1992, Heinz launched an upscale Vegetable Kormasoup bearing its new H.J. Heinz brand. In 1994, Heinz addedChicken Tikka to this line. Another U.K. company, Patak's,which specializes in Indian spices, also has a popularMulligatawny Soup in its product line. The New CoventGarden Company has based several new soups on traditionalbut relatively unfamiliar Indian spices such as cumin,nutmeg, and coriander. Creole and Latin American cuisine too have made theirmark. Heinz, for instance, in 1995, launched Chicken Creole

and Chilli Con Carne soups. One potentially interesting segment in Europe isbelieved to be couscous soups (based on a popularMediterranean dish). Although couscous is used ratherwidely in Europe as a foodstuff (especially in countrieslike Belgium and France with large Arab ethnic minorities),the availability of couscous-based soups is yet to becomewidespread. On the other hand, in Japan, couscous soup, provided asinstant soup in a cup, is already a relatively popularimported item (sourced from the United States). Growing foreign travel for both business and pleasurecontinues to swell demand for ethnic foods, and provides thefoundations for a receptivity in Europe to ethnic soups,along with a willingness to experiment with new cuisines. In Japan, ethnic soups especially those derived fromKorea and other Far Eastern cuisines have long been popular.The best-selling ethnic soup is Tom Yam Koong. Otherexamples include Shark's Fin, Yukkejan, Nantai, and TailSoup.

The Products: Global Scope; Convenience; Regulations

Global Scope with Local Preferences

Unlike many other areas of the foods market, some soupsare inherently international in nature. A cream of tomatosoup or chicken bouillon cube, for example, is madeessentially the same way whether in the United Kingdom,Italy, or Germany, or in Japan. Baseline product specifications for soup, therefore, donot pose as many entry barriers as do some other food-marketcategories. In addition, the elimination of trade barriersin Europe after completion of the Single Market has enabledcompanies to consolidate soup production for the Europeanmarket in a few countries, and thereby achieve substantialoperational economies. Nevertheless, companies have to take considerable carein adapting soup brands to local preferences this includestexture, appearance, and flavors as well as wider issues ofbusiness culture. In Japan, Campbell Soup Company brandsare based on local flavors and culinary traditions. This isalso the case elsewhere in Asia. In Hong Kong, for example,a favorite product from Campbell Soup Company is watercress-and-duck gizzard soup. In Europe, too, local tastes count. For example, whitewine is used in certain soups, especially seafood-basedsoups. The Scandinavian market has items like BobIndustries' Raspberry Soup with Apple and Grape.

Convenience Important Element of Packaging

The most important criteria for successful packaging ofsoups is convenience with good and demonstrablefunctionality. Single-serve packs and containers have longbeen used for soups, as have retort pouches. Other formats

include gable top cartons. Premium soups are available in both cans, and aschilled soups in plastic cups and cartons, or cryovacbags which has a superior image for consumers. In Japan, domestic chilled brands are packaged inpackets and boxes, and are also prepared in sealed plasticcups. Canned soups in roughly 300-gram cans are the mainformat for imports from the U.S. Most soups have the following listed on theirpackaging: ingredients, caloric content, preparation method,and oftentimes recipes. New packaging techniques for soup are introducedconstantly, oftentimes shared with other convenience foodsegments. In early 1996, European rights to Relok, a neweasy-to-open, reclosable packaging system, were acquired bya company called FCP Group. Relok, which is a rival toother packaging techniques, is targeted at the dry and semi-moist food markets, including soups. It uses ultrasonicsealing technology to create an airtight pack, thus doingaway with the need for an inner bag or for using hot-meltadhesives. The need to adapt to local conditions is also evidentwith packaging. In Japan, consumers are especiallyreceptive to innovative new-style packaging. Campbell SoupCompany cans, for instance, are found in Japan with metalliclabels and pull-tab tops (as a result, average unit pricesare higher). Meiji Seika's retort pouch packaging for soupshas also been a big hit in Japan. Also in Japan, Jake's hassought to differentiate itself from Campbell Soup Company'sclam chowder by catering to the Japanese habit of eatinglarge portions of this soup. It offers its soup in a 425-gram can, as opposed to Campbell's 305-gram can. In Sweden, Nestle replaced cans for its Findus brandsoups with glass jars following a similar move for its babyfood and mayonnaise. The reason was consumer perception ofglass, which provides an image of higher quality and allowsfor repeat use (closability) as well as recycling all ofwhich rank high on the list of the Scandinavian public'sconcerns. Tetra brik cartons are also popular inScandinavia. On the other hand, Heinz has been handicapped by thefact that the packaging format for its H.J. Heinz brand iscans, which are seen as less attractive by consumers thanare cartons, which are the fastest-growing format in thepremium market.

Food and Beverage Regulations

Food-quality regulations in both Japan and Europe arewidely regarded to be onerous and strict. In Japan, theumbrella law for food (governing a full range of topics,from additives to labeling) is the Food Sanitation Law. Europe has a battery of laws and rules at both Europeanand national levels, covering the entire food chain import,production, transport, detention, conservation,distribution, and sale. It is estimated that about 75% of

food-related regulations are European; the rest are national(and sometimes local). In general, umbrella acts (e.g.Germany's "Deutsches Lebensmittelgesetz" of 1974) providethe framework within which is woven a complex network ofindividual regulations. Different aspects of these areenforced at national, regional, and frequently, locallevels. The main rules concern ingredients, colors, sweeteners,and other additives, as well as residues and contaminants.Rules also extend to labeling and presentation of foodstuffsand their advertising. The European Commission, as part of its 1996-1998Consumer Policy Plan, has highlighted problems with thepurity and safety of foods, which it intends to deal with ina Green Paper on foodstuffs legislation. In Eastern Europe, meanwhile, renewed attention to food-quality laws was drawn after an incident in early 1996 inBudapest, Hungary, when more than 3,000 people (includingabout 2,000 children) were struck by an outbreak of foodpoisoning, and had to be rushed to the hospital. The causewas reported to be cold fruit soup, delivered to schools andsenior citizens' homes.

Simplifying Regulations

There is now a move in Europe to simplify food rules.In Japan, too, wider food-labeling and importprecertification rules are being streamlined, and areexpected to have an indirect impact on simplifying theregulatory environment in other areas of the food industry. In June 1995, the European Union's so-called `MolitorReport' on deregulation (named after a former Germaneconomics ministry official, Bernhard Molitor) said the EUshould simplify or deregulate in several areas, includingfood hygiene. This, it said, would be imperative to improveEuropean competitiveness.

II. THE MARKET

The Products; The Market: General, Size and GrowthNote

For purposes of this report, "Europe" includes all thecurrent member countries of the European Union (Austria,Belgium, Denmark, Finland, France, Germany, Greece, Ireland,Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden, andthe United Kingdom), as well as two other Western Europeancountries Norway and Switzerland. The market figures also include Eastern Europeancountries (the Czech Republic, Hungary, Poland, andSlovakia). However, due to the unavailability of verifiabledata or information, states of the former Soviet Union areexcluded from the market figures, as are the other remainingcountries of Eastern and Central Europe.

Methodology for Sales Estimates

Estimates on the current market size as well asprojections about the future market have been derived bycompiling information from the following sources:

- Personal interviews with industry executives;- News articles and reports appearing in the financial,marketing, and trade press (both published and on-line); and- Abstracts from government and industry statistics andresearch reports.

However, the figures should be considered as broadestimates due to certain factors:

1. The absence of official or industry statistics on soupconsumption in some countries, and the lack of harmonizedstatistics across Europe.2. The difficulty in demarcating definitions, especiallyin Japan between soups, noodles, and stews; and theoccasional overlap3. between convenience foods, at-home foods, and dining-out foods (canned soup served at restaurants).4. The impact of exchange rate shifts, both betweenEuropean currencies and vis-…-vis the U.S. dollar.

Figures Reported in U.S. Dollars

All market figures are in constant year-end 1995 U.S.dollars, with currency conversions based on exchange ratesshown in Table 3-1.

Market Size and Growth

Soup Sales Cross $3.7 Billion in Europe

Sales of soups in Europe are estimated at some $3.7billion in 1996, an increase of 2.5% over the previous yearand 12.5% when compared to a figure of $3.3 billion in 1991. (See Table 3-2.) Though the European market is relatively mature, Germanconsumption of soup grew sharply in the early 1990s, largelydue to the impact of reunification and the sharp growth ofnew demand in the East. Overall, Germany is estimated tohave recorded the highest market growth rate for the period

1991-1996. The United Kingdom followed Germany as the market withthe second-highest growth rate. Soup sales in the UnitedKingdom were galvanized in the early 1990s by theintroduction of upscale, chilled brands such as The NewCovent Garden as well as in-house retail brands fromWaitrose and Marks & Spencer. Until the late 1980s, soupconsumption mainly by the over-45 age group had beendeclining in the United Kingdom. The newer chilled and UHT(ultra-heat treated) soup segments contributed to growth inboth France and the United Kingdom.

Japanese Soup Sales Show Little Growth

In Japan, sales of soups in 1996 were valued at morethan $590 million, an increase of slightly more than 1% overthe previous year and about 6% above the figure of $556million in 1991. The five-year 1991-1996 CAGR was only1.2%. The collapse of the Japanese "bubble economy" in themid-1990s has led to a persistent recession. This has ledto major changes in the food-processing industry. Thoughfood industries were hit hard by the decline in personalconsumption (and have had to adjust massively to a new, lesspassive Japanese consumer), one positive effect of therecession has been the dismantling of Japan's closeddistribution system. This system essentially consisted of set prices, withfixed rebates paid by food manufacturers to cement ties withdistributors, due to price discounts determined by theformer. This structural barrier, for all practicalpurposes, had long blocked access to the Japanese market byforeign companies. As the experience of Campbell SoupCompany shows (see below), even the establishment of localsubsidiaries has not been sufficient to crack the market.

Factors for Future Growth, Market Projections

Factors for Future Growth

Demographic Factors

In the longer run, demographic factors (above all, theaging of the population) will play an important role in thedevelopment of the soup market. These are discussed in theconsumer chapter below.

Life-Styles

Changes in life-styles are expected to continuefavoring growth in the soup market. This is above all a consequence of changes in thenature of working life. In the sphere of modern workinglife, short lunch breaks are an obvious factor favoringsoups. People also want to spend less time cooking andpreparing meals, while family members frequently eat atdifferent times, often alone, especially when women work.This is true in both Europe and Japan. In Japan, currently54% of married women have jobs. With 10% to 15% of adults unemployed in the differentEuropean countries, and the steady increase in the number ofdivorces and single-parent families, eating alone is fastbecoming commonplace. This trend is strengthened by recentreforms to laws on the elderly (e.g. the U.K.'s CommunityCare Act), which encourage retired people to stay at homerather than have residential care.

At-Home and Healthy Niches

Across Europe, the 1990s have seen a mounting demandfor "fresh" and "biological" food products. Some smallercompanies, like Avonmore Soups (with its Country Ladle lineof fresh soups), have focused their entire marketingstrategy on catering to this image. Meanwhile, Batchelor'shas overhauled its advertising strategy toward a home andhearth, "fireside" image. The larger companies are also well aware ofopportunities in such niches, and several newer brands bearthe "fresh," "wholesome" or "country" catchwords. Heinz,for instance, overhauled its entire U.K. advertisingstrategy in an effort to reach out to vegetarians,especially in the younger age groups. In Japan, Nestle hasrecently launched a new vegetable bouillon. European consumers also continue to show a growinginterest in diet foods (low fat, low sodium, MSG-free) aswell as high-quality specialty products and salads. Thoughpresent in all European countries, such a trend isespecially strong in Germany, the Netherlands, andScandinavia. It is also growing rapidly elsewhere inEurope, including Italy. There is thus considerable opportunity for high-qualitysoups focused on these new dietary concepts (e.g. usingvegetable-based oils and lean meats). Another developmentis vitamin and mineral-fortified soups (e.g. the Biosoupline from Knorr launched in 1993).

Market Projections

European Market to Exceed $4.1 Billion

Sales of soups on the European market are projected toexceed $4.1 billion in the year 2001, corresponding to afive-year CAGR (1996-2001) of 2.1%. The growth rate isslightly slower than that achieved in the 1991-1996 period,and indicates the maturing of the market, as well as thecontinued persistence of price competition from the fast-growing private-label sector. The Japanese market, which includes sales of Japanese-style soups, is projected to also grow at a relativelysluggish pace, with sales reaching $652 million in the year2001, corresponding to a five-year CAGR of 2.0%, somewhathigher than in the previous 1991-1996 period. Table 3-3 provides details of sales on the two marketsfrom 1996 to the year 2001.

The various country markets in Europe will grow atdifferent rates. The fastest growth is forecast for EasternEurope. As free-market economies continue to be establishedin this region and life-styles correspondingly adjust, thisregion will move closer to the consumer patterns exhibitedin Western Europe. However, their contribution to theoverall European market is still expected to be relativelysmall.

Market Composition

Market Composition

Germany Is Largest European Market

By country, Germany was the largest European market forsoups in 1995 with a share of 18.4% of all sales. Italy wasin second place, accounting for 16.9% of sales, followed bythe United Kingdom with 14.9%, and France with a share of10.1%. These large countries (the "Big Four") togetheraccounted for just over six of every 10 dollars spent onsoup in Europe in 1995. Figure 3-1 provides details of the market shares ofthese and other major European countries in 1995.

Market Composition by Product Type

Statistical data for the European market for soups canbe divided into three categories: canned soups and bouillon,packet (or dehydrated) soups, and chilled and UHT (ultra-heat treated) soups. The latter are not only frozen but,due to the special heat treatment, are additionallyprotected from bacterial action. In unit terms, the largest category on the Europeanmarket in 1995 consisted of canned soups and bouillon,

credited with about 85% of total soup sales. Followingconsiderably behind, with a 13% share of units shipped, werepacket soups. The remaining category, consisting of chilledand UHT soups, was in third place, with a share of about 2%. In the canned soups category, premium products alreadyhave a 10% to 15% share on most markets. This is furthermorerising. Prices of premium products are about 30% to 40%higher than standard products, and the rapid pace of newproduct launches in this segment is due to manufacturers'efforts to counteract stagnating unit sales with higher-margin products. Packet soups have an especially high presence on theFrench and German as well as Dutch markets, with unit sharesof about 20% and over in each. In Spain, too, their shareis about 15%. Currently, chilled and UHT soups still have arelatively low presence on the market. However, theirimpact is forecast to increase due to the shift towardhealthier eating habits. In France and Belgium (where about75% of total soup is still homemade), the penetration ofthese sectors has been relatively higher due to their freshand traditional image. To an extent, this is also true inthe United Kingdom. In several countries, the premium segment hasoutperformed the market during the recession. In the UnitedKingdom, for instance, this segment recorded annual salesgrowth of about 20% to 25% between 1990 and 1992, and in1993 accounted for about 15% of all canned soup sales. Thisis the main reason why a company like Heinz, which leads theUnited Kingdom canned soup sector, has entered the premiumsector (with its H.J. Heinz line). In unit terms, the largest category on the Europeanmarket at the turn of the century will still consist ofcanned soups and bouillon. However, its share is forecastto fall, from the current 85%, to 80% of total soup sales,largely the result of the continued trend to favor productswith a more "fresh" image. The trend of decliningshipments is already very strong on some markets, like theUnited Kingdom, and is expected to be repeated elsewhere. There are some product innovations in the packet soupscategory (e.g. Knorr's Stir & Serve). However, challengesfrom other eat-alone products are expected to hold downgrowth. As with canned soups and bouillon, sales of packetsoups will also continue to be affected by the move inEurope toward fresh and frozen foods as healthieralternatives. Packet soups' share of the market will also fall,though less strongly, to 12.5% from its current 13.0%. The chilled and UHT soups category will see its sharerise. Though it will remain in third place, it has afavorable image for those consumers with health concerns, aswell as those seeking freshness and high quality. Its sharein unit terms is forecast to rise to 7.5%. Table 3-4 provides details of category shares in unitterms on the European market in the years 1995 and 2001.

Packet Dominates Japanese Soup Market

For Japan, sales data are provided for the packet soup,canned soup, and all other soups categories. The largestshare of the market in 1995 was made up of packet soup, witha share of 75% of sales. Canned soups accounted for a shareof about 4%. Other categories constituted the remainder ofthe market. (See Table 3-5.) By the year 2001 canned soups are expected to increasetheir share of the Japanese market to about 8%, an effectivedoubling in share within a slowly growing market. Campbell Soup Company's joint venture with NakanoVinegar Company is likely to succeed in extending thepresence of canned soups outside the major cities, wheredemand for such items is considered to be high. Packet soups will see their share of Japanese soupsales decline slightly to 73%.

Seasonal Swings

Soup is a seasonal product, with consumption peaking inthe winter season, usually beginning from October. Anextended spell of six to eight weeks of cold weather oftenaccounts for up to 30% of a year's total sales.

III. THE MARKETERS

The Marketers; Competitive Environment (1/2)

The Marketers

International Companies Are Market Leaders

The leading companies in the European soup market arepart of wider foods-sector companies (e.g. Nestle, Heinz,Campbell Soup Company) and even larger consumer goods giantssuch as Unilever. Large companies like Nestle and Unileverhave a presence in all European markets. Heinz too operatesin all markets, though Heinz soups are not found on somemarkets. CPC International has subsidiaries and affiliatesin 20 countries, European headquarters in Belgium, and aresearch and development center in Germany. Aside from soups, examples of other food sectors inwhich companies are active include ice cream, pasta, yogurt,tea, butter, margarine, pickles and preserves, etc. Campbell Soup Company, for example, has since the 1980sdiversified into several product segments (frozen foods,biscuits and confectionery, pasta, pickles and preserves,etc.). It owns (or has owned) an array of high-profilebrand names such as Delacre (biscuits), Godiva (chocolates),

Groko (frozen vegetables), Lacroix (gourmet food), as wellas Continental Foods, Kattus, Lamy Lutti, etc. However,Campbell's soup sales in Europe remain marginal. Unilever's food-sector activities are best known by itsoperating companies and brands (Oxo, Batchelor's, Royco,Iglo, Bird Eye, Wall's, Brooke Bond, Lipton, Lever, Van denBergh, etc.). Canada's McCain is present on the market in severalcountries (e.g. Belgium, France, Germany, Italy, and Spain),especially in the chilled soup segment. McCain'sacquisitions of plants and operations across most Europeancountries has positioned it well to mount an expansion inthe soups market. However, its focus remains potatoprocessing, in which it is a European market leader.

Japanese Joint Venture with Campbell

The only international company with any significantpresence on the Japanese market is Campbell Soup Company,though Nestle's Maggi brand is strong in the bouillonsegment. However, like most other food sectors, theJapanese soup market has also been tough to enter forWestern foods companies. Though Campbell Soup has had asubsidiary in Japan for several years, it too has facedmassive difficulties in this marketplace, largely due to theclosed nature of Japan's distribution system. Otherdifficulties for Campbell have included high real estatecosts and a lack of qualified bilingual employees.Additionally, prices of canned soups, Campbell's main areaof operation, are high, about twice those in the U.S.(partly the result of the previously noted pull-tab tops andmetallic labels). Campbell Japan Inc. has been selling soup (vegetablesoups, clam chowder, cream of mushroom, and cream ofbroccoli, as well as corn potage and cream of shrimp) onlyin two Japanese markets, Tokyo and Osaka. It also sellsGodiva chocolates, V8, and other vegetable juices. Campbell Soup Company is also taking another approachto the Japanese market. At the end of 1993, it set up Campbell Nakano Inc., a51:49 joint venture with Nakano Vinegar Company, a nearly200-year-old company and leading distributor of branded foodproducts in Japan, with sales of over $1.5 billion. Thejoint venture gives Campbell access to Nakano's 350-strongsalesforce and its contacts in stores and institutions. TheU.S. company is also seeking to educate Japanese consumersabout the advantages of canned soup, which accounts for only3.0% of the Japanese soup market. Most still consider it agourmet item (which its high price justifies). Via itsjoint venture, Campbell expects Japanese sales of its cannedsoup to pick up substantially from a level of $10 million in1993 (about 500,000 cases). However, by mid-1996, thecompany still had only a 2.5% share of the entire soupmarket, although this represented more than half of all

canned soup sales.

Many Small Companies Active in Local Markets

There also are many small soup companies in Europe thatare active mainly on local-market basis. Due to theirinability to provide adequate advertising and promotionalsupport, most of the smaller companies are active inselected niches only (e.g. vegetarian, ethnic, seafood).Examples include Avonmore Soups in Ireland; the U.K.'sBaxter's, Brand's, John West, Telford Foods (mainly inprivate-label diet packet soups), and The New Covent GardenCompany (the latter was started up in 1988, and has added toits range of mainly vegetable soups with new seafood soups);France's Soup'Ideale (which has strengthened its presenceconsiderably after opening a new plant at Arras); and Heroin Spain. In Germany, Zamek Nahrungsmittelfabriken andMeica Ammerlander have a successful range of ethnic andother soups (some in microwaveable forms in plastic bowls).Liebig has a strong presence in the bouillon sector inEurope. In Japan, there are also a number of domestic players(e.g. Ajinomoto, Meiji Seika, Nissin Foods and Ima FoodsIndustries, which specializes in mail order).

Marketer List by Category

Table 3-6 provides a list of the leading marketers ofsoups in Europe.

Local Tastes Remain Important Factor

Within Europe, product development, marketing anddistribution strategies face language barriers as well asdifferences in the approach to business and consumermarketing. Even after the Single Market, these are likelyto persist. For example, in its promotional deal withDisney (see below) Nestle illustrated selected Disneycharacters for promotion in different countries on the basisof local preferences Britain's favorite, for instance, isMickey Mouse, while in France and Germany it is Donald Duck. In short, in spite of the growing internationalizationof the soup market, companies will have to continue toremain sensitive to local tastes if they are to succeed. CPC International seems to have struck a correctbalance. Though it is one of the most international of U.S.food companies (deriving over 60% of revenues from abroad,compared to about 35% for Campbell Soup Company), it is alsoseen in most of its markets as a company with a strong local

identity. Interestingly, on its home U.S. market, CPC hasbeen seeking to transform Knorr, a strong Eurobrand, intoone perceived as mainstream American by U.S. consumers). Companies that have realigned their brand strategiestoward worldwide markets insist that the strategic approachfor each soup brand will continue to be applied differentlyin different countries. Such a stance often reaches back toconsumer research and product development. For example,Nestle's research and development (R&D) is handled on thebasis of local and regional markets by what are called"recos" (for research companies). There are 20 recos aroundthe world, staffed by over 2,500 scientists. Unilever's experimental innovation centers too havebeen set up in key markets around the world.

The Important Role of Research and Development

In a mature and increasingly competitive consumerproducts market like soups, companies have long acceptedthat the key to success lies in the ability to introduce newproducts that will favorably influence consumer behavior.Also, it is inevitable that success by a new productinspires competition, and only those who continuously launchnew products will win. Successful companies require that both margins andquality are built systematically into their product lines,and the major players in a consumer market like soup place agreat deal of emphasis on research and development.Creativity and innovativeness, coupled to solid marketresearch that quickly senses and anticipates shifts inconsumer preferences (and thereby creates new markets), iscrucial to not only gain advantage (by being first tomarket), but also to maintain the latter against thecompetition which inevitably follows. This requires close relationships with both retailers(downstream) and suppliers (upstream), a facet earlier leftto marketing departments but now increasingly adopted byR&D. Companies seek to capitalize on new productdevelopments in other, related segments of the food markettoo. One advantage is the ability to harness expertise inthe common fields of ingredients, flavors, nutrition, aswell as agronomy, microbiology, toxicology, and now,biotechnology. Batchelor's, for example, has developed a"new" lentil which instantly absorbs boiling water, thuspermitting more attractive soup recipes (e.g. tomato andlentil, bacon and lentil). Another obvious advantage is common brand recognitionfor more than one food category, usually by the sameconsumer group. For example, less than a year after thelaunch of its Stir & Serve soup, CPC International moved toadapt its Stir & Serve technology to the European dry saucemarket, with a string of new sauces. In recent times, it is also considered increasingly

important to bring an innovative new product to market in asshort a time interval as possible. For example, CampbellSoup Company's Stealth (low-fat) line extensions in the U.S.in the early 1990s were taken from concept to store shelf ineight months. Knorr's Stir & Serve was in stores in justsix months. To reduce time to market, some of the largercompanies have supplemented dedicated R&D centers with newpilot plants to run test batches under realisticformulation, filling, and packaging conditions at nearproduction line speeds, without having to share productiontime in a manufacturing plant.

Competitive Environment: New Product Introductions BuildCompany/Brand Shares

New Product Introductions Build Company/Brand Shares

The dehydrated soups market has since the late 1980sbeen inundated by low-quality products. As a result, it hasexperienced a market share decline, and some manufacturershave sought to revitalize it. In late 1992, for example,CPC International launched its new Knorr Stir & Serve line,based on an innovative "universal binding system," whichresults within seconds in a creamy textured, roux-based soupwith a fresh-cooked taste. The product won several awardsin the United Kingdom and elsewhere, and by mid-1993 hadhelped push Knorr's soup growth to over 25% at least one-third of which was at the expense of canned soups. Other new soups from Knorr include the Biosoup line,launched in 1993. The line, which consists of Seaweed,Cream of Veal, and Lentils, are all fortified with vitaminsand minerals. In 1994, Knorr added Norwegian Fish Soup toits International Gourmet soup line in Germany. Morerecently, in Germany, it has also introduced a consomme, acrab-and-shrimp soup, and a new potato soup (under thePfanni brand, which it acquired in the early 1990s). Campbell Soup Company has also launched a series of newproducts. In 1991, it introduced four new canned soups inthe United Kingdom as well as a new Cream of Prawn varietyin the premium segment (to add to its existing Tastes of theWorld line). Sales of Campbell Soup's Healthy Request in the UnitedKingdom, introduced in 1994, have been especially strong.Some consumers, however, continue to identify Campbell'swith its heritage, seeing it as a producer of condensedsoups. In an effort to hold its market leadership in cannedsoups against premium segment players like Baxter's, Heinzlaunched the Kitchen Garden line of six soups. In 1993, italso entered the premium segment with its new H.J. Heinzline (the closest it had earlier come to the premium segmentwas its chunky Big Soups line, launched in the mid-1970s).The new H.J. Heinz line has been differentiated as a sub-brand, with a distinct green rather than the company's usualred branding. The soups are targeted at upper-income

housewives and positioned as adult and special. Theirlaunch was announced with a broad promotional campaign,which included trade advertising, TV ads, and coupons to onemillion households via direct mail (in regions not coveredby TV). Other new products and line extensions from Heinzinclude a line of entirely ethnic selections in 1994 ChickenCreole, Chicken Tikka Masala, Chilli Con Carne, Beef Satay,and Beef Rendang. Its Pasta Soups line was alsoinvigorated, during 1994, by the introduction of VegetableGiardina. Heinz also topped up its Weight Watchers line inearly 1995 with six new soups; newcomers in its canned soupssegment included Wholesome Potato & Leek and WholesomeCountry Vegetable & Chicken, while instant soups saw no lessthan four products Mediterranean Tomato & Pepper, OrientalChicken Noodle, Leek & Potato, and Italian Cheese & Noodles. Unilever and Nestle too have launched a series of newproducts. In early 1996 Nestle launched a series of newMaggi soups in Germany (including shrimp and crab, andseveral soups based on German regional cuisines). InNorway, Unilever launched its new Mills and Delikat brandsat the end of 1994, one of the main factors behind the risein its share of Norway's packaged soup market to 18%. Inthe United Kingdom, Batchelor's used its "new" lentil todevelop 12 mainstream and reduced-calorie canned soups forthe lunch market. Though many smaller companies place a great deal ofemphasis on the safer (but less rewarding) strategy of beingquick followers, some small companies and private-labelmanufacturers have been at the forefront of productdevelopment. In the late 1980s, for example, the U.K.market was galvanized by the introduction of pioneeringchilled brands such as The New Covent Garden Company, aswell as in-house retail brands from Waitrose and Marks &Spencers. Another in-house retail brand, Fresh CreamyMushroom Soup from Safeway's, won the 1994 Super MarketingBritish Quality Food Award. In 1992, The New Covent Garden Company added to itsline of more than 30 mainly vegetable soups with two fishsoups Smoked Haddock Chowder and Soupe de Poissons, whichthe same year won the Super Marketing British Quality FoodAward. Like its other similarly small counterparts, thecompany counts a great deal on authenticity, freshness, anda made-at-home appeal. Since then, new products havesteadily emerged from its pipeline (1996 examples includeCarrot & Coriander, Spinach with Nutmeg, Spicy Vegetableswith Peanut, Lentil & Tomato with Cumin, Tuscan Bean, aswell as Classic Gazpacho). In a move to increase itsviability as a foods company, The New Covent Garden Companyhas recently added sauces to its portfolio.

Marketing and Product Trends (1/4): Product Development, HealthConcerns, Retailers' Clout

Marketing and Product Trends

Product Development

Soup companies have long accepted that the key to theirsuccess lies in the ability to introduce new products thatwill favorably influence consumer behavior. Most newproducts (about 70% to 80%) are line extensions, with trulyinnovative products accounting for the remaining 20% to 30%.Line extensions consist of improvements, additions, andmodifications to flavor or variety. Often, these areaccompanied by additional sizes as well as changes topackaging formats. The goal of soup companies is to not only developdifferentiated products but also to communicate theirrelevance to the consumer. In today's market, however,informing consumers is no longer considered to be enough.The old rationale of a consumer-driven market has yieldedplace to one where companies drive consumers. Marketingcommunication strategies have in consequence become muchmore sophisticated, flexible, and fine-tuned than everbefore. Product development in all categories of the soupmarket is now focusing on freshness in look and taste, withtastes tuned to local culinary preferences.

Health Concerns

Consumer consciousness in Europe and Japan about thehealth risks of fat-rich foods is growing, though it isstill less pronounced than in the United States. Forseveral years, companies have expanded their lines toinclude low-fat and fat-free soups. The aim is to providenutrition-conscious consumers low-fat alternatives totraditional cream soups. Such efforts have been rewarded. For example, CampbellSoup Company's Healthy Request, introduced in 1994 in theUnited Kingdom, was an instant success, with sales boomingimmediately after launch. Indeed, it was only after itsrunaway U.K. success that Campbell decided to introduce low-fat cream soups to the United States. Heinz's innovative, reduced calorie Weight Watchersbrand was launched in Europe in 1985, beginning with soupsand salad dressings, and extended later to a dozen othercategories (including ice cream, cheese, pasta, and pizzas).Its image was boosted in 1992, when a survey of over 70packaged grocery categories found it to be the U.K.'s best-selling healthy-eating brand. Heinz has since thenintroduced several new products to the Weight Watchers line,and is currently developing Weight Watchers as a Eurobrand. Heinz has, however, faced stiff competition in theUnited Kingdom from diet packet-soup market leader,Batchelor's with its Slim-a-Soup line, introduced in 1987(and consisting of Spicy Vegetable, Broccoli and

Cauliflower, and Tomato and Lentil). Other food company brands dedicated to health-consciousconsumers include Nestle's Findus sub-brand LeanCuisine/Cuisine Legere and Unilever's Healthy Options. Yet another recent health-related trend is to use brothas a butter/oil substitute, due to continuing (and stillunclarified) concerns over the health risks of heatingbutter or even some kinds of oil.

Growing Clout of Retailers

Currently, soup companies remain squeezed between thegrowing clout of retailers (who control access to storespace) and cost-conscious consumers. Given the increasing price competition from privatelabels, Heinz reduced prices to retailers in key marketslike the United Kingdom, while maintaining those toconsumers, thus increasing retail margins. The company,however, chose to resist sweeping price cuts, which wouldnot have allowed it to return to normal levels after theeconomic slowdown. Within their marketing budgets, soup companies now alsohave to balance their attention to trade marketing (byoffering better terms of trade to retailers), with consumerbrand awareness.

Marketing and Product Trends (2/4): Consumer Price Consciousness,Consolidating Manufacturing, Restructuring Management

Consumer Price Consciousness

European soup consumers continue to show increasingprice sensitivity. However, there have been two paralleltrends. As the recession bit in the early 1990s, soup (andother canned foods) were the first target for those buyingcheaper, a process aided and abetted by in-house brands fromthe large retailers. On the other hand, consumers(especially young white-collar workers) are also willing topay more for the quality edge offered by premium products.Finding the correct price point (where the consumer sees itstill carrying value), has been no small challenge for themajor soup companies, especially with newly launched premiumproducts. In the wake of the recession, Heinz has adopted a newstrategy called price-based costing. Instead of calculatingcosts and then adding margins to obtain prices, Heinz claimsto have turned this logic upside down to adopt coststructures for products that correspond to the price pointpreferences of consumers. Among other means devised to holdon to existing consumers, soup companies have focused onextra-value activity (mainly in terms of special value-for-money promotions) for consumers. Price cuts have beenresisted, largely to avoid long-term damage to brand image.

Similarly, in Japan, after a period of so-called "pricedestruction," the system has now moved closer to openpricing. For its part, Campbell Soup Company has decided toestablish a joint venture with a strong and well-establishedlocal partner. At the same time, the Japanese market has aproliferation of private-label (and unbranded generic)products, mainly sourced from Thailand, Malaysia, and SouthKorea, and generally catering to the ethnic segment of themarket.

Consolidating Manufacturing

Most soup companies have streamlined or consolidatedtheir activities, accompanied by restructuring, which hasseen drops in their workforces. During the recession, whenprofitability was squeezed, the overriding goal was tomaintain or minimize drops in market share, especially toprivate-label competitors who took the economic downturn asan opportunity to enter or consolidate their hold on themarket. In Europe, the approach of the European Single Marketsaw several food companies seeking to run their plants on apan-European (or global) scale, with all its attendanteconomies. Procurement was consolidated across Europe, withraw materials (vegetables, tin, glass, paper) and othersupplies sourced from the lowest-cost suppliers, often on anannual basis. In 1993, CPC International made a move toconsolidate its European soup manufacturing operations byrelocating production of Knorr packet soups and stock cubesfor the U.K. market to France and Italy. With the increase in competition, soup companies havealso sought higher manufacturing efficiency, accompanied bytotal quality control accreditations to the ISO-9000 series(an international quality control standard). Aided byadvances in process technology and engineering, severallarge soup companies have doubled (and in some casestripled) line speeds at their plants, as compared to levelsin the late 1980s. Since the mid-1980s, Heinz has been operating under arationalization plan, highlighted by its Low Cost Operatorprogram. In Europe and throughout the world, Heinzcompanies have been modernizing, rationalizing, andoccasionally refocusing their operations. In the period1991-1994, Heinz's operations (including its Kitt Greenplant in northern Britain and its Italian factory at Latinanear Rome) have benefited from over $1 billion in investment. This process has more recently been accompanied bymanagement restructuring as well as layoffs. In the UnitedKingdom, it set up a new operations center at Kitts Green,transferring its R&D, engineering, and purchasing away fromHayes Park, Middlesex. It also outsourced services likemedia relations and public relations to externalcontractors, both to hold down costs and reduce payrolls.

In Japan, domestic soup companies (in keeping with thegeneral trend in the food-processing industry) have begunshifting production overseas, especially to Southeast Asia.The main reason is the massive strengthening of the yen inthe last three years. Nissin Foods, the so-called "ramen king," is a pioneerin overseas production. For several years now, it hasoperated a noodle production plant in Hong Kong. MeijiSeika sees overseas operation as a competitive lifeline inorder to hold down costs.

Restructuring Management

The main tenet of soup (and food) company management inEurope is to find the correct strategic mix betweencentralization and local autonomy. Though the past practiceof strong country managers and national profit centers hasyielded to a pan-European scale of product development,branding, and logistics, several companies continue to leavemarketing to individual country market experts. Unilever's European management system has, for example,recently been modified moving away from its previousemphasis on pan-European centralization (as the 1993European Union (EU) Single Market approached) to a mixedsystem where production is on a continental European scalebut marketing is handled along national lines. In each EUcountry, Unilever's food operations are now organized intojust two units one for frozen foods and ice cream, and theother for non-frozen foods. On the European level, oneboard director is responsible for frozen foods and the otherfor non-frozen foods. Due to this operationalrestructuring, cost savings in Europe are reported to betwice their 1993 level. Unilever's profits in Europe rose7% in 1995. Since the early 1990s, Nestle too has reorganized itsmanagement structure. One of the most important changes hasbeen to divide its internal business groups by brands,rather than technologies (e.g. canned or frozen). At itsheadquarters in Vevey, Switzerland, Nestle now has sevenstrategic business units (SBUs). Six are focused on productgroups coffee and beverages, milks and creams, catering,foods, ice cream and confectionery, petcare. The foods SBUincludes soups as well as chilled and frozen products. Theremaining SBU is dedicated to Nestle's Buitoni brand.

Marketing and Product Trends (3/4): Mergers and Aquisitions,Disposals, New Asian Markets

Mergers and Acquisitions, Disposals

In recent years, one of the main routes to growth forsoup companies has been through overseas acquisitions ofstrong (often complementary) brands and companies.

Several of the acquisitions are intended to leverage acompany's presence in the wider food-processing market. Such an approach was begun by U.S. companies, giventhe slowdown in growth on their own home market. CPCInternational, for example, has made about 65 acquisitionsin the past eight or nine years of companies averaging about$30 million in annual sales. The company in fact explicitlysought acquisitions as a means to outpace average foodindustry growth. A related benefit of internationalacquisitions is the ability to balance market growth in oneregion with a slump in another as well as counteract shiftsin exchange rates. Companies have generally focused on acquiring well-established players in local food and foodservice markets tocomplement their own network, or to give them a springboardfor market entry. CPC International's objective, forexample, is to attain market synergies. After acquiring alocal company, it uses the latter's distribution system tointroduce CPC's own products, while also selling the newlyacquired brand in its markets elsewhere. CPC International made several foodsector acquisitionsin Europe in the early 1990s. Major buys includedSmithKline Beecham's Ambrosia, Marmite, and Bovril brands inthe United Kingdom, and Germany's Pfanni (a companyspecialized in potatoes and dumplings, which recentlylaunched a new potato soup in Germany). In 1995, CPC madetwo major acquisitions. It took over the Lesieur mayonnaiseand salad dressings business in France and acquired theGolden Wonder Pot Noodle instant hot snacks line fromDalgety in the United Kingdom. The company has since soughtto build synergies, especially with its Knorr soups, andplans to extend these lines geographically. For companies like Campbell Soup Company, Europe hasbeen the focus of their worldwide program of acquisitionsand reorganization since the early 1980s. Campbell targetedmid-sized companies in Europe that would be a stepping stoneto establishing it in selected niches. In 1988, it acquiredU.K. frozen foods company Freshbake, which immediately gaveit third position in the U.K. frozen foods market. Morerecent acquisitions by Campbell include Fray Bentos of theUnited Kingdom, a manufacturer of canned meats, which waspurchased in 1993 from Unilever's Brooke Bond Foodssubsidiary. And in 1995, it acquired Homepride Sauces, theU.K.'s largest cooking sauce brand, from Dalgety. Bothacquisitions are designed to strengthen the company's lineof heat-processed food products, including soups. In 1990, the company disposed of a string of companiesin peripheral or overlapping business areas, selling someoperations, while closing down others. The castoffs, whichaccounted for 20% of its European earnings, included theU.K. vegetable division of Campbell Foods PLC, Irish Foodsand Mallow Foods in Ireland, and Campbell Seafoods (withoperations in Belgium and Britain). In early 1996, Campbellsold the Netherlands-based Groko operation to Danish foodand drinks company Danisco. And in May 1996, Campbellcompleted the disposal of its frozen seafood interests toU.S.-based Van de Kamp's.

In spite of this impressive pace of acquisition,Campbell lags behind its main competitors, CPCInternational, Nestle, and Heinz, in Europe. Its Europeanmargins are also relatively low, at 6% pretax in 1995. In January 1996, Heinz acquired Britwest, a majorBritish foodservice supplier specialized in single-servecondiments, beverages, and sauces, and with activities inthe United Kingdom and France. In May 1996, Heinz took overthe Mareblu Italian tuna fish brand from Kraft. Unilever has also made a series of food sectoracquisitions, (in the early 1990s at the rate of one to twoper month). Between 1991 and 1995, it acquired 64 foodcompanies and disposed of 28. In 1993, it took a largerestructuring charge, mostly to cover the cost of shuttingdown food factories in Europe (about 140, however, are stilloperating). In early 1993, Unilever made an about-turn inits drive to gain market share. While it had earlier frowned upon joint ventures as ameans to develop and sell food products in new markets, thecompany decided to tie up with French foods group BSN (nowDanone) to market a new range of iced snacks. Its reasonfor the U-turn was the increasing costs of innovation andmarketing of new products worldwide.

Opportunities in New Asian Markets

In the future, international soup companies' majortargets are almost certain to include Southeast Asia as wellas the giant Chinese and Indian markets. Demand forconvenience foods in these areas will increase massively aslife-styles change with industrialization, the growingstrength of their consumer markets, and an increasingacceptance of Western foods. Another factor in favor of focusing on Asia is thatsoups (albeit home-cooked varieties) are already a part ofmost diets. In 1991, Campbell Soup Company set up a$500,000 research facility in Hong Kong to determineconsumer preferences and to explore opportunities on theChinese market. One of its findings: The Chinese have theworld's highest per capita consumption of soup, with 99%eating soup every day. About a year later, Campbell Soup launched 17 selectedproducts (soups, broths, and vegetable juices) in Guangdong,the country's most affluent province, under the Swanson, V8,and traditional Campbell's red-and-white labels. Chickenbroth and cream soups with corn and mushrooms have been thetop sellers. Other Asian markets targeted by Campbell SoupCompany include Malaysia and Indonesia. In Australia,Campbell's cream of pumpkin is already the best-sellingcanned soup. Heinz too has targeted Asia and the Far East, whosepopulation and economic growth rates give them the potentialto become the world's largest markets. In the babyfoodmarket, Heinz has made acquisitions in India and Australia,

and in 1995 overtook Gerber as the world's leading producerin this field. It has also targeted ketchup and sauces aswell as the wider foodservice sector. In June 1996, itacquired Australia's Southern Country Foods, a leadingmanufacturer of corned beef with a presence in many FarEastern markets. However, the company has yet to make asoup acquisition in this area. Since the early 1990s, Unilever has also targeted Asiafor strategic opportunities. Currently, emerging markets generate food sales of some$7 billion, twice the level reported by the company for1992. These markets now claim more than a quarter of totalfood sales. In 1995, for the first time, the share ofUnilever food sales outside Europe and North America washigher than the share of North America. Such a long-termtrend is reflected in its acquisitions, which have beenmainly in markets outside the U.S. and Europe.

Marketing and Product Trends (4/4): Looking East, Concentration onBrands, Future Outlook, Private-Label Opportunities

Looking East

After the fall of the Berlin Wall, food companies madea spate of acquisitions in Eastern Europe largely tocapitalize on opportunities as this region caught up withliving standards in the West. Large consumer goods companies like Unilever, which in1992 acquired Czech state-owned cosmetics and edible oilscompany PTZ (Povltavske Tukove Zavody), saw this as astepping stone to setting up nationwide sales anddistribution networks for its wider corporate interests.CPC International also obtained a presence in EasternEurope, acquiring local soup companies in Poland andHungary. Heinz too has stepped up its efforts to acquire asignificant presence in Eastern Europe. Last year, it madetwo major investments taking majority control of KecskemetiKonzervgyar in Hungary, a leading canning company, and ofCzech babyfood and dairy products company PMV/Zabrek. International companies operating in Eastern Europehave also sought (or plan to seek) new and potentially hugeexport markets in Russia. However, competition in thisrelatively underdeveloped region is also expected toincrease.

Concentration on Brands

In spite of the seemingly furious pace of recentacquisitions, some soup companies have also chosen toreverse their focus to a handful of high-potential brands,market segments, and/or country markets. Campbell SoupCompany, for instance, is to narrow its future focus to

market leaders and dispose of lower-performing products,possibly including several soups. Heinz's strategy has long been to be a niche leader ineach of the markets it is involved in. In Europe, thecompany has an especially strong presence in the UnitedKingdom. Heinz is also a brand leader in each segment ofthe canned soup market in which it is active (in the UnitedKingdom, for example, having market leadership positions inthe ready-to-serve, large dice, and reduced-calorie cannedsectors). In 1993, Nestle shifted its global strategic focus tofour brands and two product areas. Soups and sauces (whichspan Maggi in continental Europe, Crosse & Blackwell in theUnited Kingdom, and Contadina in the U.S.), and milks andcreams (Nestle and Carnation brands) are product areas wherebrands are still largely based on country markets. Othersegments such as chilled and frozen products are still basedon geographical areas. The four brands marked for the new worldwide marketingstrategy are Nescafe (coffee), Nestle (confectionery),Friskies (pet food), and Buitoni (pasta). In spite of theshift to a global stance, the central strategic approach forthese brands will be applied according to the specialfeatures of different national or regional markets. At theend of 1995, Nestle was also reported to be considering amassive $31 million campaign to revive awareness in theUnited Kingdom of the 170-year old Crosse & Blackwell brand(and its sub-brands). In 1992, Nestle had been consideringscrapping the brand altogether and replacing it with a moreglobal brand like Maggi. Meanwhile, Unilever too has been streamlining its foods-sector lines. In 1989, it merged Brooke Bond Oxo andBatchelor's, and at the end of 1992, merged Matteson Wall'sand Van den Bergh Foods. In 1994, it consolidated BrookeBond Foods and Van den Bergh. The aim of this process is toobtain cost savings in distribution and administrativeoverheads, with savings ploughed back into R&D andpromotion. The company has also been disposing of some ofits peripheral operations.

Future Outlook

In an age of globalization, a key challenge is tobalance the requirements of the national with theinternational. Europe is a typical example of a region withseveral local markets, and national brands account for themajority of soup sales (and will continue to do so). Formajor companies, the issue is to balance internationaleconomies of scale with attention to local tastes. Thus,Nestle and other companies, which have recently shiftedtheir brand strategies to global scales, insist that thestrategic approach for each brand will be applieddifferently in different countries. Similarly, at a time when innovative new products pour

into the market, the challenge is to build and sustain pan-European or global brands, with successful ones rarelynumbering more than one or two a year. Yet anotherchallenge is to adapt advertising to increasinglysophisticated products and well-informed consumers.

Manufacturers See Private-Label Opportunities

Sales of private-label canned soups have been risingrapidly in Europe. In the United Kingdom, for instance,unit sales grew by over 20% in both 1994 and 1995. Seeing this, some large manufacturers have enteredprivate-label production. In August 1995, Heinz shocked theBritish food industry by admitting it was supplying private-label spaghetti and baked beans to supermarkets. Its reasonwas ostensibly spare capacity in its plants due to highermanufacturing efficiency. Heinz also added that it (ratherthan retailers) specified recipes for its private label.Heinz has, of course, long been active in the private-labelsegment in the U.S. as well as in continental Europe, andits move to this segment in the United Kingdom was to beexpected. Critics, however, maintain that it was a clearcase of a company succumbing to competition. Nestle toosupplies private-label products pasta and dressings. Several other branded foods companies (e.g. P&G, Coca-Cola and Kellogg) publicly asserted after the Heinzannouncement that they would never follow suit. Otherspointed out that the Heinz move was a thin edge of thewedge. Brand manufacturers, they claim, would losebargaining power further to retailers once the latter becomeaware of their costs and the link to quality differentials.Consumers, too, especially those most sensitive to prices,are likely to suspect that private label is not reallydifferent from a branded product. Though most such moves have so far been directed atother categories, in the future, soup could also beincreasingly affected. Heinz for one is reported to beconsidering private-label soup in the United Kingdom too.

Advertising and Promotion: Strategy, Direct Marketing

Advertising and Promotion

Advertising Strategy

The above developments (mergers and acquisitions,production, and managerial streamlining, etc.) herald acomprehensive realignment of the approach that is beingtaken by soup companies in their relationship with themarket. However, the key to future success will lie in howsoup companies and their products are perceived byconsumers.

Towards this, most soup companies have overhauled theiradvertising strategies, and a few have severed long-termrelationships with ad agencies in their quest for newthinking. As this report was being written, Campbell Soup Companywas reviewing its $200 million global advertising account.Like most large food companies, it wished to assign oneagency to each global brand (along with some assignments forsmaller brands) and wanted to reduce the number of adagencies it used from eight to four. In 1991, Heinz removed Y&R (with whom it had worked forover 40 years, and which created the Beanz Meanz Heinzslogan) from its roster, reducing its agency roster tothree. The same year, Heinz resurrected its famousgrandfather and grandson duo for TV commercials in theUnited Kingdom, junking London cabbie George and his family,who had been the standard bearers for its ads between 1988and 1990. Though George was hugely popular, Heinz thoughtthe theme had limitations with regard to changes in themarket, mainly changes in demand patterns and consumerdemographics. The grandfather/grandson campaign has alsobeen updated, with the grandson replaced by anenvironmentally conscious university student to whom Heinzis targeting vegetarian soups. Heinz has also overhauled its advertising and promotionstrategy. Its marketing budget has been redirected, with anew, mainly poster-based ad campaign moving away fromproduct-specific promotion to boosting the company'scorporate identity (or "Heinzness"), seeking to drawattention to the quality aspects of its entire product line, including newer brands such as H.J. Heinz.

Direct Marketing

In recent years, many of the larger companies have beenseeking to look at below-the-line opportunities for theirfood (and other consumer product) activities. The aim is tobypass the clout of both retailers and media owners and tobuild one-to-one relationships with individual consumers. First of all, the growing power of retailers has madeit harder for product launches. New brands often require months of attention, whileretailers (looking for maximizing returns on shelf space,and aided by ever more advanced scanning systems andsoftware for realtime personal consumption data) think interms of weeks. Further, the continued growth of newbrands, along with heightened competition, also implieslimitations to supporting each brand on television. Yetanother challenge for traditional advertising strategy isthe proliferation of TV channels (including cable TV, pay-for-view, and video-on-demand services), which makes itharder to reach the consumer and to obtain adequatefeedback. In Europe, Nestle was one of the first food companies

to establish direct one-to-one communication (relationshipmarketing) with consumers. In 1993, it launched the Buitoniclub, to make Buitoni the world's leading Italian foodbrand. Consumers, according to Nestle, will be willing topay a 10% price premium for a quality brand, if theyidentify with it, feel a "sense of belonging." The namesand details of Buitoni Club members will be used to build adatabase for conducting market research on a much widersample than average. Meanwhile, paralleling the attention to its brands,Nestle has also sought to raise the profile of its own name(dispel its previous mystery) and corporate identity. Itsaim is to build a U.S.-style relationship with financialmarkets and the public. One source of inspiration for thisis its acquisition of Britain's Rowntree, which had anexcellent image and relationship with the British public. In 1994, Heinz too moved to endorse direct marketing byannouncing that it would match its $8 million U.K.television budget with a new $8 million direct-marketingbudget focused on specific products. Television would befocused on an umbrella Heinz corporate campaign, whiledirect mailings would be used for promoting individualbrands. Soon after, the company mailed over 5.5 milliondiscount vouchers to households identified as Heinz productbuyers. In September, Heinz sent out Heinz at Homemagazines to about 3.5 million households. It found theresponse encouraging with 68.0% of recipients spontaneouslyrecalling receipt of the first issue, and 40.0% saying theywould keep it for reference. About 1.5 million took up themagazine's coupon offers and contacted its helpline. Heinzsaid that its soup share increased 6.4%, while other productsectors too recorded gains. Currently, there are fiveversions of Heinz at Home, and the company is planning tofurther segment it. It is also seeking to expand it acrossEurope. This shift in focus is strategic, rather than atactical move for a brand. Heinz itself had earlier beenrewarded by a babyfood direct-marketing campaign with datacollected from baby packs issued to mothers at childbirth.This was followed by personalized mail messages at differentstages in the child's life. The campaign saw Heinz'sbabyfood market share soar from 50% to almost 60%. Thereasoning now is that any brand can be treated like a nichebrand, and soup consumers are as definable as new mothers. Though Heinz later insisted there would be no cutbackon its mainstream media spending, the move shook up theEuropean marketing establishment as well as the mass media.In the United Kingdom, a Sunday Times banner headlineannounced that "Brand giants switch from TV to junk mail." Soon after the Heinz announcement, Nestle rolled out a2.5 million door-to-door leaflet drop for Oxo, asking forresponses to purchasing habits. And in 1995, Unilever addedfurther to the uncertainty in the ad industry by appointinga director to make an appraisal of below-the-lineopportunities for all its U.K. product groups. AnotherBritish foods group, Albert Fisher, is to follow suit. Somecompanies, including Unilever, have taken up this path on

purely defensive grounds because "everyone else is doingit." In spite of such moves, the consensus in the industryis that the future of direct marketing remains unclear dueto the still unknown efficacy, costs, and durability ofdatabase construction and maintenance.

Advertising and Promotion: Promotional Activities; Distribution

Promotional Activities

Major new promotional campaigns are centered onstimulating impulse buying, trials, and repeat purchases.Most manufacturers support new product launches not onlywith strong print and television advertising, but with in-store promotions at large supermarkets. Companies are nowalso considering new or relatively untapped channels (suchas radio and health-related magazines) as well as venturinginto areas like weather forecasting. The bread and butter of promotional techniques consistsof recipe ideas on the back of the soup pack (or on leafletsdropped door-to-door), as well as new product informationand money-off vouchers. With the onset of the recession, many manufacturersfound value-for-money multipacks as a means to attractconsumers. For loyalty, several companies provide proof-of-purchase seals, which allow participation in sweepstakesand/or discounts. Other approaches include free ordiscounted entry tickets to leisure parks and holidayresorts, as well as point-of-sale sweepstakes. Somecompanies have also been reported to be considering frequentbuyer swipe cards. Elsewhere, soup companies have sought inthe 1990s to embark on sports sponsorships. In the field of promotion, one of the most attractivedeals was struck in 1992 by Nestle, when it obtainedexclusive rights to use Disney merchandising in itspromotion of food products across Europe. Nestle hassuccessfully exploited the Disney connection for thepromotion of its dehydrated soup as well as other foodproducts. The 11-year, $100+ million contract is exclusive,in keeping with Disney's practice of preventing overexposureof its characters. The Disney deal has helped Nestle create new markets,especially in the children's segment. Shortly afterstriking the deal, Nestle introduced Donald Duck soup (aswell as canned pasta in Disney shapes). At the Euro-Disneypark outside Paris, Nestle has also developed new Disney-based characters exclusively for the park. It is alsoentitled to use "live" Disney characters for salespromotions. Both Disney and Nestle see the dealstrengthening certain shared aspects of their corporateimage family orientation, quality commitments, etc.

IV. DISTRIBUTION

Distribution

Supermarkets and Groceries Are Major Outlets

The major outlets for soups are supermarkets andgrocery stores. In Japan, the latter are known as"specialty" stores, and are frequented by young housewives.In general, supermarkets are favored for bulk purchases tostock soup (and other food items) for longer periods, whilegrocery stores are the preferred outlet for immediate usepurchases. In high-growth segments like chilled premium soups incartons, supermarkets have an advantage due to thepossibility of overnight distribution to their network.This is, in fact, one reason why some companies, like Heinz(with a concentration on canned soups), are seeking totarget cash-and-carry chains and independent conveniencestores, which are more likely than supermarkets to stocklong-life products. With distributors seeking to maximize profits fromlimited selling space, there is a strong trend toconcentrate on a core range of strongly advertised products,especially brand leaders. Private-label soups too have seen a sharp rise insupermarket sales, both due to the recession (whichredirected consumer spending to lower-priced goods), as wellas the growth of information technology). Most Europeansupermarkets have savers' cards and other loyalty programs,with real-time electronic data about individual consumersand their buying patterns. Based on this information, theyhave tailored promotions to redirect consumption frombranded to their in-house soups. Service station forecourt (convenience) shops are alsodeveloping rapidly as a distribution channel for soups,especially in some countries (e.g. the United Kingdom). However, their share of the market still remains small.In Japan, department stores also account for a small shareof the market mainly stocking imported brands. In the future, several new or alternative channels areunder consideration in Europe for distributing soup. Theyinclude mail order and vending machines (e.g. at offices).In France, recent restrictions on the start-up of newhypermarkets is seen as a factor that will spurdiversification of distribution channels. The eventual goalis still more convenience. However, too much novelty isalso not always appreciated in Europe. For example,automatic vending machines for a popular food item likefrench fries did not succeed in Belgium, and had to bewithdrawn.

V. THE CONSUMER

The Consumer

The Consumer

Shopping Habits

In Europe, soup tends to be bought by consumers mainlyin supermarkets. Groceries are preferred for fresh foods such as meats,bread, or seafood. As with other aspects of the market, the frequency oftrips to supermarkets varies considerably from one countryto another. Greeks have the highest number, averaging morethan four times a week. The French have the lowest, atabout once a week. The European average is estimated atabout two visits per week. Europeans are also relatively more likely to persist inusing one store (either grocery or supermarket) than doAmericans.

Demand and Demographics Age Most Telling

In the industrialized countries, the number of thoseconsuming soup has long matured. Market growth has recentlybeen based less on increasing consumers or the frequency ofsoup consumption than on increasing prices (often via newproduct launches). However, with the aging of thepopulation, the soup market is expected to benefit. Those aged 55 and over consume soup more than youngadults, and in the long term, the demographic trend in bothEurope and Japan of an aging population will play animportant role in development of the soup market. The European Commission recently reported that, bar anyunusual events, the number of people over 60 years willincrease from the 1995 figure of 76.3 million to 113.5million in the year 2025, with an especially pronouncedincrease in numbers from the year 2006 onward. During thisperiod, the number of people under 20 years of age will fallby 9.5 million or 11%. The number of adults aged between 20and 59 years will also fall, but not as sharply (i.e. by6.4%). However, this will correspond to a drop of more than13 million in their numbers. Similar demographic developments are also expected inJapan. While the numbers of youth and working-age peopledecline, the over-65s in Japan are expected to see anincrease in their share of the population from 12% in 1990to 17% in the year 2000 and an estimated 26% in the year2025.

Youth Market Also Promising

In spite of a preference for soup by the olderpopulation, younger adults are now also being targeted bysoup companies (especially in segments like vegetariansoups).

Indeed, this was one reason why Heinz changed its adstrategy to accommodate ecology-minded university studentsand vegetarians (whose numbers are fast growing in severalcountries of Europe, especially the United Kingdom and theNetherlands). In the United Kingdom, several of its newerproducts (e.g. Potato & Coriander, Vegetable Korma) areendorsed by the Vegetarian Society. About 51% of vegetarianfood products in the United Kingdom are bought by youngadults under the age of 35. In Japan, under-30s account for an estimated 15% ofconsumers. The bulk of consumption, however, remains withthose in their 30s and 40s (who account for about 65% ofpurchases).

Single Persons

One traditional target group for soup companiesconsists of single-person households. In the UnitedKingdom, this demographic segment represents one in fourhouseholds, and is the fastest growing in size. Given the circumstances of modern living, an estimated30% to 40% of all eating occasions involves a single personor a family member eating alone, and up to a third of soupconsumption is estimated to be by single persons.

Women Reign

Men are a minority in terms of soup purchases. InJapan, women account for 70% of all soup purchases; thefigure for Europe is estimated at 60%.

Premium Soup Consumers

In the United Kingdom, about 78% of the populationconsumes standard soup. These are seen as safe and reliable as well as good forchildren. However, they have a stodgy and unexciting image,in comparison to premium soups. Premium soups are consumed largely by white-collarworkers and middle-aged adults with no children (groupstargeted by pioneering premium soup companies such as TheNew Covent Garden Company for its new lines, when launchedin the early 1990s). Premium soups are viewed as more of a goody than otherproducts. In the United Kingdom, they are seen as veryBritish and somewhat aristocratic. Branded products generally have a better chance thanprivate label in this segment, since consumer perceptionsidentify the latter with no more than acceptable quality. Premium soups are available in both cans and as chilledsoups in cartons (which has a superior image amongconsumers). Heinz's new H.J. Heinz line is targeted at standardcanned soup consumers wishing to move up to premium soups.

The company sees a large consumer group falling betweenstandard and premium users.

The Global Consumer

It is now accepted by the larger companies that thereis something called an "international consumerconstituency" groups of consumers in different countries whoshare the same concerns and tastes. Given the trend toglobal branding and marketing, the priorities of thisconstituency have to be addressed for real long-termsuccess.

Table 3-1: Exchange Rates to the U.S. Dollar: For SelectedEuropean Countries and Japan, December 30, 1995 Country: Belgium,Denmark, Finland, France, Germany, Italy, Netherlands, Norway, Portugal

ExchangeCountry Currency Rate

Belgium Franc 29.4Denmark Kroner 5.54Finland Mark 4.34France Franc 4.89Germany Mark 1.43Italy Lira 1,586Netherlands Guilder 1.60Norway Kroner 6.32Portugal Escudo 149.3Spain Peseta 21.3Sweden Kroner 6.626Switzerland Franc 1.151United Kingdom Pound 0.644Japan Yen 103.2

Source: Financial Times.This material used with permission.

Table 3-2: Size and Growth of the Soup Market in Europe andJapan, 1991-1996 (In Millions) Europe Japan

Year Sales % Change Sales % Change

1996 (e) $3,726 2.5% $591 1.2%1995 3,635 2.3 584 0.91994 3,553 2.1 579 0.51993 3,480 2.9 576 0.51992 3,382 2.1 573 3.11991 3,311 _ 556 _

(e) = estimate.Source: Packaged Facts.

Table 3-3: Market Size Projections of the Soup Market inEurope and Japan, 1996-2001 (U.S. dollars) (In Millions)

Europe JapanYear Sales % Change Sales % Change

2001 $4,134 1.9% $652 1.9%2000 4,057 2.0 640 2.11999 3,977 2.1 627 2.31998 3,895 2.2 613 2.01997 3,811 2.3 601 1.71996 3,726 _ 591 _

Source: Packaged Facts.

Table 3-4: Share of European Soup Market: By Category, 1995vs. 2000 (percent); Category: Canned Soup and Bouillon, Packet Soup,Chilled and UHT Soup

Category 1995 2000

Canned Soup and 85.0% 80.0%BouillonPacket Soup 13.0 12.5Chilled and UHT Soup 2.0 7.5Total 100.0% 100.0%

Source: Packaged Facts.

Table 3-5: Share of Japanese Soup Market: By Category, 1995vs. 2000 (percent); Category: Canned Soup and Bouillon, Packet Soup,Chilled and UHT Soup

Category 1995 2000

Packet Soup 75% 73%Canned Soup 4 8Others* 21 19Total 100% 100%

* Includes UHT/chilled soup.Source: Packaged Facts.

Table 3-6: Major Soup Marketers in Europe and Japan, 1995

I n t e r n a t i o n a l M a r k e t e r s

Name Leading Brands/Sub-Brands

Campbell Soup Company Condensed, Main Course, Bumper Harvest, Healthy Request, Tastes of the World

CPC International/Knorr Packet & Instant, Stir & Serve, International Gourmet, Soups of the World

Heinz Heinz Standard, Weight Watchers, H.J. Heinz Premium, Big Soup, Higher Fibre Wholesoups

McCain McCain

Nestle Maggi, Crosse & Blackwell, Findus

Unilever Oxo, Royco, Mills, Delikat, Batchelor's, (Packet, Traditional, Wholesoups, Quick Serve), Iglo (chilled)

L o c a lC o m p a n I e s

Origin/Main CountryName of Operation

Ajinomoto JapanAvonmore Soups United KingdomBaxter's United KingdomBrand's United KingdomHero SpainIma Foods Industries JapanJohn West United KingdomLeibig GermanyMeica Ammerlander GermanyMeiji Seika JapanNissin Foods JapanPatak's United KingdomSoup'Ideale FranceTelford Foods United KingdomThe New CoventGarden Company United KingdomZamekNahrungsmittelfabriken Germany

Source: Packaged Facts.

Figure 3-1: Share of European Soup Market: By Country,1995 (percent); Country: Germany, Italy, United Kingdom, France,Netherlands, Spain, Belgium, Other Europe

Germany 18.40%Other Europe 18.00%Italy 16.90%United Kingdom 14.90%France 10.10%Netherlands 8.80%Spain 8.70%Belgium 4.20%

Source: Packaged Facts.

LA-43304 COMPANY PROFILES

Company Profiles: Borden, Inc.

Borden, Inc.

100% of Borden Stock Is Sold

All of the stock in Borden, Inc. was bought by KohlbergKravis Roberts and Co. on March 15, 1995. The previousshareholders received shares in RJR Nabisco in place oftheir old Borden shares.

Borden Sales Drop Below $6 Billion

Total Borden sales in fiscal year 1995 exceeded $5.9billion, down 5.1% from almost $6.3 billion in 1994. Thechief reason given for the decline is a divestiture ofprevious holdings. The 1990s have been a time of financialloss. The company lost $442.5 million in 1995, althoughthat marked an improvement over the $566.2 million losssuffered in 1994.

Borden Is A Highly Diversified Company

Borden began as a dairy products company with the famedElsie the cow symbol for its milk. Today it is a highlydiversified company with five segments: food, dairy,chemical, decorative products, and other consumer products. The food segment itself is quite diversified andincludes pasta and pasta sauces, processed cheese, non-dairycreamer, sweetened condensed milk, reconstituted lemon andlime juices, bouillon, confections, dehydrated soups, andwhole milk powder. The dairy products segment handles milk, ice cream,sherbet, yogurt, cottage cheese, frozen novelties, low-fatdairy products, and fruit drinks. It also provides milk-based products for the foodservice trade. Borden's chemical segment includes adhesives for theforest products industry, foundry and industrial resins, andUV curable coatings and specialty inks.

Its decorative products segment includes residentialwallcoverings, flexible vinyl films and sheeting and heattransfer paper. Perhaps the best known of the other consumer productssegment is Elmer's glue. The segment also handles bakeryproducts and salty snacks.

Company Profiles: Campbell Soup Company

Campbell Soup Company

Sales Reach $7.3 Billion

For the fiscal year ending Aug. 1, 1995, the net salesof the Campbell Soup Company approached $7.3 billion, anincrease of 8.8% over FY1994's sales of $6.7 billion. Netearnings after taxes were $698 million, an increase of 10.8%over the previous year's earnings of $630 million. Campbell is a multinational corporation with its worldheadquarters in Camden, New Jersey.

The Corporation Has Three Divisions

The company has organized itself into three divisions:U.S.A., Bakery & Confectionery, and International Grocery.Each of them enjoyed their best sales year ever in FY1995. The U.S.A. division is the largest section, accountingfor 59% of the corporation's sales. It includes most of thefoods and brands that are Campbell's most famous products inthe United States. The Bakery & Confectionery division is a worldwideoperation with Pepperidge Farm in the U.S., Arnotts Limitedin Australia, Delacre and Lamy Lutti in Europe. It also hasa worldwide brand, Godiva Chocolatier. This divisionaccounts for 22% of the company's sales. The final 19% of sales comes from the InternationalGrocery division, which handles all food sales (mainly soup,sauces, juices, and frozen foods) outside the United States. Beginning in early 1993, Campbell Soup has beenreorganizing itself, selling off a number of underproductivemanufacturing plants and businesses. This increasedefficiency is part of the reason the growth of net earningshas been outpacing net sales growth. The corporation has also purchased other companies. In1995 it acquired Fresh Start Bakeries, Inc., a food servicebaking company with operations in the U.S., Europe, andSouth America; Pace Foods, the world's leading producer andmarketer of Mexican sauces; and Stratford-upon-Avon Foods, acanned vegetable and fruit company in England. CampbellSoup also increased the size of its ownership in Australia'sleading biscuit manufacturer, Arnotts Limited. CampbellSoup now owns 65% of that company.

Major Brands

Campbell boasts many leading brands in differentcategories with about two dozen products that are ranked asbest or second-best sellers in their categories. Brandsinclude Campbell's, Franco-American, Godiva, Great Starts,Healthy Request, Home Cookin', Hungry-Man, Lunch and More,Mac & More, Marie's, Mrs. Paul's, Open Pit, Pace, PepperidgeFarm, Prego, SpaghettiOs, Swanson, V8, and Vlasic.

Investments Important To Maintaining Leadership

Campbell Soup invests just under a fifth of its netsales income in programs aimed at preserving the company'smarket leadership. In 1995 the company spent $1.4 billionon marketing and selling and $88 million on research anddevelopment. That totals 19% of net sales.

Company Profiles: ConAgra

ConAgra, Inc.

1996 Sales Reach $24.8 Billion

ConAgra, Omaha, NE reported sales for the fiscal yearending May 26, 1996, reached $24.8 billion, up almost 3%from FY1995's $24.1 billion. Net income for fiscal 1996 was$916.4 million, up 11% from the previous year's $825.4million.

ConAgra Has Highly Diversified Structure

ConAgra is divided into five companies that oversee 48other companies. This structure allows the corporation toorganize and control its enormously diversified range ofactivities. Table I-1 shows the companies and their placein the corporation's structure. It should be understoodthat these companies remain a part of ConAgra's overallstructure and can share in ConAgra properties, like brandnames. For example, the Healthy Choice brand of soups ishandled by the Hunt-Wesson company, which is part of ConAgraGrocery Products, but the Healthy Choice brand also appearsas a meat product under the control of ConAgra RefrigeratedFoods. The largest sales comes from the ConAgra RefrigeratedFoods company, with 52% of the corporation's sales, althoughits sales total slipped 4% from 1995. ConAgra's Agri-Product and Trading and Processingcompanies combine to provide 27% of the sales. Their saleswere up 13.% from the previous year. The Grocery and Diversified Product companies combineto provide 21% of ConAgra's total sales. This group's totalsales for 1996 were up 9% from 1995 totals.

Refrigerated Foods Undergoing Extensive Restructuring

In May, 1996 ConAgra announced a restructuring planthat will change its Refrigerated Foods company more thanany other part of the corporation. The plans include plantclosings and reductions in personnel. Brands in thisdivision include Armour, Brown 'N Serve, Butterball, Cook's,Decker, Eckrich, Golden Star, Healthy Choice, HebrewNational, Longmont, National Deli, Swift Premium, andWebber's. Products include hot dogs, bacon, hams, sausages,cold cuts, turkey products and kosher meats. TheRefrigerated Foods company controls thirteen furthercompanies, and they in turn control eight more companies.

Trading & Processing Deals In Marketable Commodities

ConAgra Trading & Processing oversees nine othercompanies that deal mostly in the distribution ofcommodities used as ingredients in food products and asfoods for raising meat and poultry. Its largest company isConAgra Grain, which has grown dramatically through thecombined effects of a new management team, strong exportdemand, and high grain prices. It also has extensive grainprocessing operations, such as milling. The companyaccounted for about 15% of FY1996's total sales.

Agri-Business Provides Products To Make Foods Grow

ConAgra Agri-Products controls two further companies.Their major businesses market products like crop protectionchemicals, fertilizers, and seeds used by farmers to growtheir products. They also have a specialty retailingbusiness and participate in a number of land developmentbusinesses. The specialty retailing includes a chain ofgeneral stores devoted to products for country living. Agri-Products accounts for about 12% of ConAgra sales.

ConAgra Grocery Products Controls Many Leading ConsumerBrands

The ConAgra Grocery Products Company controls two othercompanies, and one of them, Hunt-Wesson, controls eightfurther companies. The Grocery Products company handlesmany popular brands, including Chun King, Gebhardt, HealthyChoice, Hunt, Knott's Berry Farm, La Choy, Manwich, OrvilleRedenbacher, Peter Pan, Rosarita, Snack Pack, Swiss Miss,Van Camp, Wesson, and Wolf.

As Its Name Implies, ConAgra Diversified Products Does ManyThings

The ConAgra Diversified Products Company oversees fiveother companies and one of them, ConAgra Shrimp/Singleton

Seafood, then oversees another three companies. Theyoperate in the seafood market, the pet products market, andin the U.K.'s frozen microwave food market.

Company Profiles: Grand Metropolitan Plc

Grand Metropolitan Plc

Grand Metropolitan's Sales Exceed $5 Billion

London based GrandMet, as Grand Metropolitan callsitself, enjoyed sales of œ8,025 million in fiscal 1995 ($5.1billion), up 3% from 1994. Pre-tax profits reached œ920million ($590 million), up 41% from the previous year. Thestrong profits growth reflected the results of restructuringthat dramatically reduced overhead.

Food and Drinks Are the Company's Specialties

The company is divided into two overall segments, FoodOperations and Drinks Operations. Food is responsible for58% of sales, while drinks account for the remaining 42%. Food Operations are divided between several divisions,the largest being the Pillsbury unit. Others are the BurgerKing fast food chain, a European Foods unit, and PearleVision, a retail eyewear company that is under the controlof the Food Operations division, although it does not sellfood. The Drinks Operations is responsible for itsInternational Distillers & Vintners (IDV) unit. IDV boastsownership of five of the top 20 spirits brands in the world:Smirnoff, J&B Rare, Baileys, Malibu, and Jose Cuervo. Theunit operates throughout the world, on all continents northof Antarctica.

Pillsbury Is Food Operations' Most Profitable Unit

The Pillsbury unit, whose brands include Pillsburybaked goods and mixes, Green Giant vegetables, Progressosoups, Haagen-Dazs ice creams, and Old El Paso Mexicanfoods, accounts for 36% of GrandMet's profits. Itsoperating profit grew 23% in 1995 even before the additionalmoney's gained through its purchase of the Pet corporation.It accounts for 59% of the Food Operations' profits. TheU.S. market brings in 79% of Pillsbury's profits. Becauseof the importance of the dollar to Pillsbury sales, theslight weakening of the dollar against the British pound hashurt GrandMet's total balance sheet. Pillsbury began as an American company and its salesare still centered in the United States, but PillsburyInternational markets products throughout the world. ItsGreen Giant brand is the world's largest marketer of brandedvegetables (fresh, frozen, and canned). In Europe, many of

Pillsbury's brands are marketed through the corporation'sEuropean Foods unit.

Company Profiles: Nissin Food Products Co., Ltd.

Nissin Food Products Co., Ltd.

Total Sales Approach $3 Billion

Total sales for the Nissin Food Products Company infiscal 1995 was •266 billion, or about $3.0 billion, up 3%from 1994; however, the dollar value of the sales iscalculated according to the exchange rate that prevailed onMarch 31, 1995, the end of Nissin's fiscal year. The rate(US$1 = •89) was at a time of an extremely weak dollar and avery strong yen. Net profits for FY1995 were •6,917 million ($78million), down 16% from the previous year.

Instant Noodle Division Is Largest

In Japan, Nissin divides itself into four divisions:Instant Noodle, Food, Frozen Foods, and Chilled Foods.Sales from Nissin's Instant Noodle Division account for 79%of all sales and were up 4% from 1994 levels. Brands inthis division include Nissin Rao, a noodle product thatboasts a long shelf life but a fresh taste. Another brandis Gonbuto, instant forms of traditional Japanese noodledishes. A third brand, Spa-O offers instant spaghetti.Other brands include Chicken Ramen, Donbei, Men no Tatsujin,and Cup Noodle. The Food Division includes breakfast cereals, instantsoups, snacks, and confectioneries. The Frozen FoodsDivision is largely aimed at Japan's growing use ofmicrowave ovens. It includes frozen ramen soups and frozenversions of traditional Japanese dishes. The Chilled FoodsDivision match the Instant Noodle Division. It offers avariety of Japanese noodle dishes, frequently packaged infamily-size portions.

Company Encourages Internal Competition

Nissin is organized to encourage competition within thecorporation itself. Within the company's divisions brandmanagers have the authority to change established productsand to introduce new ones. The managers compete amongthemselves to show that they can make their brand grow moreenergetically than other brands within the division. Theirgoal is to establish each of their brands as categoryleaders.

Company's Presence Has Become Worldwide

Nissin is now found in many countries beyond Japan.Its U.S. subsidiary, Nissin Foods (USA) is its largestoverseas operation and operates plants in Lancaster, Pa andMemphis, Tenn. A second American subsidiary, Camino RealFoods is based in California and markets frozen foods. Aresearch company maintained in the USA is the NissinMolecular Biology Institute, based in Boston, Mass. Other subsidiaries are based in Brazil, Canada, China,Germany, Hong Kong, India, Indonesia, Philippines,Singapore, Thailand, and the Netherlands.

Company Profiles: Quaker Oats, Inc.

Quaker Oats, Inc.

Quaker Oats Sales AT $6.4 Billion

In fiscal year 1995, the worldwide operation of QuakerOats had net sales of almost $6.4 billion, up 7% from theprevious year. $1.3 billion of that came from sales ofassets that were divested and another $96 million of growthcame from favorable improvements in currency rates. Thus,the net growth did not reflect strong sales growth andwithout those special conditions the net sales would havemarked a decline. Net income in FY1995 was $802 million, upa dramatic 246% from FY1994. The 1994 data reflectcomplicated restructuring and special charges. Quaker Oats is a multinational corporation, with itsworldwide headquarters in Chicago.

Organization

Quaker Oats is a food company with two distinct groceryunits, organized by the territory served. The largest division is its U.S. and Canada GroceryProducts unit, which accounts for 73% of net sales. Growthin FY1995 was 9%, driven chiefly by the acquisition ofSnapple beverages; however, sales of Snapple, the largestacquisition ever made by Quaker Oats (price $1.7 billion),have not approached expectations. Disappointment overSnapple performance has led to some reorganizing of thisdivision. Besides selling through grocery outlets, QuakerOats does expensive business with food service outlets. Itsbreakfast products cereals, pancake mixes, and syrups areespecially strong. The International Grocery Products division accountsfor the other 27% of company sales. This division operatesin much of the world with branches in Latin America, Europe,and the Asia/Pacific region. Its presence is particularlynotable in Argentina, Australia, Brazil, Colombia, Italy,Korea, Mexico, the Philippine Islands, and Venezuela.

Quaker Has Many Famous Brands

Many of Quaker Oats' brands are well-known in theircategories. Major U.S. brands include:

- Breakfast cereals: Cap'n Crunch, Life, Quaker ToastedOatmeal, Quaker 100% Natural, Quaker Oatmeal Squares, andQuaker.- Beverages: Ardmore Farms, Gatorade, Made From the BestStuff on Earth, and Snapple.- Snacks: Quaker and Quaker Chewy.- Others: Aunt Jemima, Celeste, Golden Grain, Mission,Mrs. Richardson's, Near East, Nile Spice, Pasta Roni, andRice-A-Roni.

Company Profiles: Unilever Plc and Unilever N.V.

Unilever Plc and Unilever N.V.

Unilever's Worldwide Sales Almost $50 Billion

British-based Unilever Plc, together with Rotterdam-based Unilever N.V., form one of the world's largestconsumer products companies. Its sales for 1995 reached$49.7 billion, up some 9% from 1994's $45.4 billion. Profitbefore taxes stood at $3.66 billion, virtually identical tothe previous year's $3.65 billion.

An Unusual Structure

Together, Unilever Plc and Unilever N.V. have asomewhat unusual structure. Although it operates as asingle entity, Unilever consists, technically, of a group ofbusinesses with identical boards of directors. Thesecompanies are linked by numerous agreements concerningdividends and shareholder rights.

Operations are Worldwide

Unilever operates on every inhabited continent. In1995, 52% of its sales came from Europe; North Americaaccounted for 19% of sales; Asia and the Pacific wereresponsible for 14% of sales; Latin America brought in 9% ofsales, while Africa and the Middle East were responsible forthe final 6%. The best growth areas are in Asia and LatinAmerica. Particularly notable growth has been achieved inIndia, where there has been a strong rise of interest inconsumer products.

Principal Product Areas: Food, Detergents,

Personal Products and Specialty Chemicals

Unilever markets products in four main areas: food,detergents, personal products, and specialty chemicals.Half of Unilever's business consists of the manufacture andsale of packaged food and drink, a side of the business thatflourishes primarily in Europe. Under the detergent segment of its operations, Unileverincludes not only fabric detergents, but other soaps andcleansers, including bar soaps, household cleaners, andindustrial cleaning products and systems. Unilever's many personal care products are marketedmostly through subsidiaries such as Chesebrough-Pond's,Elizabeth Arden, Calvin Klein Cosmetics, and Faberge. A fourth major operation area is specialty chemicals,which makes and manufactures adhesives, specialty resins andstarches, fragrances, flavors, and food ingredients. Theseoperations are controlled through the subsidiaries:National Starch and Chemical (starches and resins); QuestInternational (flavors, food ingredients, and fragrances);Unichema International (oleochemicals); Crosfield (silicatesand silicas); and Loders Croklaan (specialty fats). Anothersubsidiary, Unipath, handles Unilever's microbiologicaltesting and medical diagnostic business.

Major Brands

Familiar Unilever brands include the detergents Wisk,Surf, All, Omo/Persil, Comfort and Skip; bar soaps Dove,Lever 2000, Lux, Lifebuoy, Haman, and Sunlight; the Vaselineline of petroleum products, the Vaseline Intensive Care lineof hand and body moisturizers, Signal, Mentadent,Croissance, Sangoyl, Zhongua, and Maxam oralcare; Clearblueone-step home pregnancy test, and Brut cologne.

Table 4-1: Companies Within ConAgra, 1996

ConAgra Agri-Products United Agri Products ConAgra Retail

ConAgra DiversifiedProducts Arrow Industries ConAgra Foods ConAgra Pet Products ConAgra Shrimp/Singleton Seafood O'Donnell-Usen USA Meridian Seafood Products Gelazur Lamb-Weston

ConAgra GroceryProducts ConAgra Frozen Foods Hunt-Wesson ConAgra Grocery Products International

Hunt Foods Hunt-Wesson Food Service Hunt-Wesson Grocery Products Knotts Berry Farm Foods La Choy/Rosarita Foods Orville Redenbacher/Swiss Miss Foods Wesson/Peter Pan Foods

ConAgra Refrigerated Foods Armour Swift-Eckrich Armour Swift-Eckrich Processed Meat Butterball Turkey Decker Food Longmeat Foods National Foods Australia Meat Holdings Beatrice Cheese ConAgra Fresh Meats ConAgra Poultry ConAgra Broiler Professional Food Systems Country Skillet Catfish ConAgra Refrigerated Foods International Cook Family Foods E.A. Miller Monfort Beef and Lamb Monfort Finance Monfort Food Distribution Swift & Company

ConAgra Trading &Processing ConAgra Commodity Management ConAgra Europe ConAgra Flour Milling ConAgra Grain ConAgra Specialty Grain Products International Trading Milinos de Puerto Rico United Specialty Food Ingredients

Source: ConAgra. This material used with permission.

LA-43305 ADDRESSES OF SELECTED MARKETERS

Addresses of Selected Marketers

Borden, Inc.277 Park AvenueNew York, NY 10172(212) 573-4000

Campbell Soup CompanyCampbell PlaceCamden, NJ 08103-1799

(609) 342-4800

ConAgra, Inc.One ConAgra DriveOmaha, NE 68012(402) 595-4000

CPC InternationalInternational PlazaP.O. Box 8000Englewood Cliffs, NJ 07632(212) 89404000

Fantastic Foods, Inc.1250 N. McDowell BoulevardPetaluma, CA 94954(707) 788-7801

Goya Foods Inc.100 Seaview DriveSeacaucus, NJ 07094(201) 348-4900

Grand Metropolitan200 South 6 St.Pillsbury CenterMinneapolis, MN 55900(612) 330-4966

Health Valley Natural Foods16100 Foothill BoulevardIrwindale, CA 91706(818) 334-3241

Heinz USA106 Progress StreetPittsburgh, PA 15212(412) 237-5757

Manischewitz, B., Co.1 Manischewitz PlazaJersey City, NJ 07304(201) 333-3700

Nissin Foods USA2001 West Rosecrans AvenueGardena, CA 90249(213) 321-6453

Quaker OatsQuaker TownP.O. Box 049001Chicato, IL 60604(312) 222-8503

Spice Hunter254 Granada DriveSan Luis Obispo, CA 93401(805) 544-4466

Uncle Ben's5721 Harvey Wilson DriveHouston, TX 77020(713) 674-9484