Soup 2.1
NJ’S CAMDEN: Soup 2.0 from Campbell Soup Co. has one main objective, and that’s to retain as many new consumers in the category as possible. Sales of Campbell’s soup decreased at a compound annual growth rate (CAGR) of minus 2% over the four years, from fiscal 2015 to 2019. The company claims that the CAGR for the soup industry increased to 6% between fiscal 2019 and 2021.
“During the company’s virtual investor day on December 14, Campbell’s Meals & Beverages business unit president Christopher D. Foley stated that the soup category is healthier, more relevant, and stronger than it has been in a long time.” Every week, there are 92 million soup situations at home, with 22 million of those happening in millennial families. Younger users are more inclined to eat soup throughout the day in between meals as they become aware of its variety.
Eating at home is the company’s main “soup 2.0” strategy tailwind. According to an estimate by market research firm Gartner, 53% of US workers will work remotely by 2022.
“We’ve seen a significant increase in our share of soup occasions at lunch, which is good news, especially for a category like soup,” Mr. Foley stated. “Eating at home has become more popular and has changed over time. One important finding is that consumers expect meals to be prepared in even less time—now, less than eighteen minutes. They’re worn out from preparing elaborate dinners and cooking at home.
The management wants to use modernising the portfolio, expanding its strength, and speeding up innovation as strategies to keep the soup company flourishing. Cooking is one area where Mr. Foley saw room for modernization.
“We have seen significant growth in this space, and soup is such a great catalyst for simple meals,” the speaker stated. So, we see numerous ways to increase relevance and continuously reinvent the culinary experience, whether it’s by introducing healthier or more convenient forms or growing our Pacific brands to include organic or plant-based options.
Ensuring that every brand has distinct areas for growth will be necessary to expand the soup business’s strength.
According to Mr. Foley, “the Campbell’s brand and condensed soup business are rooted in a ready-to-create and simple goodness mentality.” We’re keeping up the innovation against eating well and feeling well for our Well Yes! brand. Our premium positioning and artisan meals are found in our organic brand, Pacific. Chunky remains the soup that can be consumed like a whole meal. Swanson is, at last, the key to successful domestic cookery.
All five of these brands are in spaces that we feel good about for growth, and all will have unique areas of investment and innovation to continue to drive that growth. No one else brings such an iconic and unique range of brands to fully meet our consumers’ and our retailers’ needs.”
The COVID-19 pandemic forced Campbell Soup to pause some of its innovation efforts and focus on supply continuity. As the market has adapted to the pandemic, the company is focusing innovation on texture, taste and functional wellness.
“We’ve had great success with our crunch in lines when we first launched with Slow Kettle and now our Campbell’s All Family Crunch,” Mr. Foley said. “We’ve taken some of our most iconic products, like Goldfish crackers, and connected them with tomato soup to bring a unique experience solution at lunchtime or snack time.”
He highlighted the range of flavors available in the Well Yes! brand of Power Bowls as on trend. Varieties include spiced chickpea, vegetable chili, harvest vegetable, Cajun style chicken and Southwest style chicken.
The Pacific brand will lead Campbell’s foray into functional wellness with plant-based broths, oat milk soups and wellness bone broth. The company also announced plans to expand Pacific into the sauce category in 2022.
“We have made strong progress as we transform the soup category in the profitable center of the store,” Mr. Foley said. “We will continue to stay focused as we work to modernize soup to ensure it stays relevant for tomorrow’s consumers. Our mission to unlock growth is not over but we are very pleased with the strength of the foundation we have built on this important business.”
Analysts participating in the investor day presentation asked management to outline soup category growth opportunities beyond pandemic-induced trends.
“One of the things that we do feel good about is that in the midst of elevated demand and certainly in (a) terrible set of circumstances, there is no question about the tailwind that has come from in-home consumption and the elevated demand across most all of our categories,” said Mark A. Clouse, president and chief executive officer. “But I do think our performance on share is an important place where we have really emphasized in this moment how do we establish better relationships with our brands and consumers, how do we take the opportunity of being in this moment to solidify some of those relationships, especially with younger households …”
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Mr. Clouse added that the soup category is often thought of as a homogenous business but plays a lot of different roles in consumer eating occasions.
“I think that’s one of the reasons that we feel so good about our portfolio because it allows us to reach a variety of different consumers but also a variety of different occasions,” he said. “And I think that is going to be part of the compelling kind of win in soup 2.0 through this lens of versatility that brings a more significant level of innovation, continued high levels of support.”