With much of the eastern parts of the US hit by the coldest weather for years in recent weeks, soup makers would appear well-placed to prosper.

Campbell Soup Co., however, is causing furrowed brows throughout the investor community. Last week, the company cut its sales targets for its financial year and, on Monday (22 February), the group's latest results - including a 8% fall in US soup sales in the three months to the end of January - disappointed investors.

It was in ready-to-serve soup that Campbell suffered. Sales fell 18% amid weak consumer spending and, critically for Campbell, against a backdrop of increased competition from, according to president and CEO Doug Conant other "simple meals".

Conant said it had managed to increase sales of condensed soup and broths on a volume basis but admitted a lack of promotional activity from the company had held back ready-to-serve soup sales - something, he insisted, which would be rectified in the months ahead.

A succession of analysts questioned Conant on the performance of Campbell's ready-to-serve business, prompting a bullish reaction from the executive, who claimed the second quarter was merely a "hiccup".

Conant also brushed off concerns over competition from other convenience foods. "We're built to compete with any simple meal. We just have to get the right formula for success as the market evolves. I have no concerns about our ability to compete," Conant said.

Conant and Campbell's plans to revitalise its domestic soup business rest on promotions behind its ready-to-soup products, which will see continued investment in healthier recipes.

The company is also planning a major push behind its condensed soup, with Conant telling analysts at last week's CAGNY conference that the business would "fire up" sales from that side of the business.

Conant admitted Campbell had made a "mistake" in not promoting its ready-to-serve soups during the quarter but soup, he insisted, still remains "highly relevant" to US consumers.

Industry watchers are not so sure. Alexia Howard, packaged food analyst at Sanford Bernstein, said Campbell had managed to grow its share of US soup during its second quarter but insisted the category remained challenging.

"The deterioration of overall US soup sales growth from -3% last quarter to -8% this quarter as the comparable improved from 12% to 4% is disappointing, and speaks to the weakness of the category despite sequential improvements in Campbell's share trends this quarter," Howard wrote in a note to clients.

The cold snap in the US seems to have had little effect on how consumers perceive soup. Conant insisted the popularity of soup remained strong. "Soup is still the number two item at lunch; it's still in the top ten at dinner. It's still the highest unit volume in the entire centre of the store for simple meals," he said on Monday.

However, the Campbell boss did admit the company had seen a "step up" in promotional activity across ten competing "simple meal" categories that the business monitors. And, with consumer confidence still weak, shoppers seem to be shying away from soup.

"In our view, these results have been indicative of the fact that there are some value-added conveniences that today's cash-strapped consumers are unwilling to pay up for," Morningstar analyst Erin Swanson tells just-food.

"Generally speaking, competitive pressures throughout the packaged food space are intense. For instance, with the frozen meals category, companies have referred to the significant pricing actions that have been taken in order to drive sales in that aisle."

Further investment in promotion could take its toll on Campbell's margins. The company reported an increase in margins on Monday, although they were boosted by gains in productivity and reduced advertising expenditure. More spending behind ready-to-serve soups and its revamped condensed range could put pressure on profits.

Howard believes better productivity at Campbell will continue to drive "modest" margin growth at the business, despite the upcoming investment behind its brands. And, according to Morningstar's Swanson, Campbell's condensed soup should "appeal" to consumers who are dining at home more often.

However, with soup facing a battle with other simple meals for consumers' plates and bowls, and with the likes of Heinz revealing it plans to ramp up its promotions, Campbell's advertising and promotion activities will need to be on the money.