With an almost 130% increase in sales in the last four years, prospects look good for the chilled soup market, according to a report published in a recent issue of Retail Intelligence’s industry monitoring Consumer Goods UK.

The key to increasing sales is to get more people to try chilled soup and the growing popularity of soup bars could be crucial in this respect. New Covent Garden has been involved in the catering sector for some time, but the last year or so has seen a new wave of soup bars appear on the High Street. Souperdouper, Soup Opera and Soup Works are all contributing to the rapid uplift in sales. The inspiration for soup bars comes from New York, where soup bars are fashionable among lunching workers.

Soup bars are relatively upmarket operations, offering an internationally-inspired menu of soups made with natural ingredients, placing an emphasis on quality and, in turn, continuing to raise the profile of the soup sector.

The 1998 increase of 14% shows a slight slowdown in the rate of growth (the five year average is 25% pa), but still indicates a buoyant market. Double digit growth is predicted well into the new millennium, with a further expansion of 80% forecast for the next five years. In addition to the development of new distribution channels, the growth in sales is driven by innovative product development by key producers and the lifestyles of today’s consumers.

Self-Service Re-fuelling

The trend for convenience foods is well established, a boom market driven by changes in traditional eating patterns. Retail Intelligence highlights the way that dining trends are moving towards the less formal, particularly in smaller households and on the increasingly number of “light meal” occasions. Even in larger families, the direction is towards a fragmentation of mealtimes, with the home often seen as a “self-service re-fuelling zone” for individual family members. The pressure for easily-prepared food has led to the reinventing of the role of soup as something other than just a starter. In addition, consumers are becoming more discerning, demanding healthier food and a wider variety of flavours. Chilled soup offers customers the perception of freshness, and producers have worked hard to offer a large range of – often ethnically centred
– flavour options. Technology has also had a hand in the increasing demand – chilled soup is both microwaveable and freezable, furthering the convenience factor.

Carrot and Coriander

Responding to ever-increasing consumer demand, companies such as leading brand The New Covent Garden Soup Company have introduced new combinations of flavours – using more exotic ingredients – and used promotional ideas (such as the Soup of the Month and Soup of the Season concepts) to add further stimulus to sales. However, the favourites remain the fairly traditional options: Carrot and coriander, tomato variants, leek and potato, and mushroom. They vary the options regularly, particularly to counter the problem of seasonality (winter month sales are 20% to 30% higher than the annual average).

Soup Kitchens

The New Covent Garden Soup Company remains the branded market leader (indeed, the only significant brand), but its market share has been showing a gradual decline under pressure from the major own-label suppliers. This is not a surprising development, as the grocery multiples are overwhelmingly dominant in distribution in this sector (if Marks & Spencer are included), with over 90% of all sales.

However, New Covent Garden is fighting back with its first TV advertising campaign (January 1999), and has had to be equally innovative in distribution terms – it has moved into the lucrative foodservice sector, as a supplier to sandwich shops, in-store restaurants, pubs and theme restaurants – and well as developing their own range of SOUP bars. Retail Intelligence expects this company to win back lost market share as a result.

Details of reports from Retail Intelligence click here