New Covent Garden, the UK's largest chilled soup brand, announced a major push earlier this week with the launch of six varieties. The company, owned by Singapore Food Industries, hopes the move will attract new customers to the fresh soup category. Katy Humphries caught up with New Covent Garden marketing manager Nick Munby to find out more about the group's plans for the sector.

just-food: You've announced that six new varieties will be added to your range of chilled soups. What does New Covent Garden hope this will achieve?

Nick Munby: All our marketing efforts are around bringing new people to the fresh soup category. Our number one objective this year is to hit 18% household penetration on the brand. Those consumers that fit the profile of a fresh soup consumer but don't actually buy fresh soup.

j-f: Does the company also hope to drive market share gains?

Munby: That is not our primary objective, although if we are successful and the new flavours build penetration and deliver sales growth then share will obviously be a natural consequence of that.

j-f: Innovation is obviously very important to driving both market share and category growth. Is there any other NPD in the pipeline?

Munby: We do have some others in the pipeline. We've got these six [Butternut Squash & Sage; Red Pepper & Rocket; Scotch Broth; Beef & Irish Stout; Chicken, Lemon & Tarragon and Oxtail]. We'll start with these six in September, which is the start of what we call the "soup season" and we'll look to bring out more through the winter. In our presentations to the trade this summer we've actually been presenting more than six soups. The intention is to keep a regular rollout of innovation.

j-f: Are these innovations also likely to be line extensions?

Munby: Yes. We have got 28 different flavours in our range and we don't really want to go bigger than that. Any new line extensions that we bring in would be replacements for current flavours in the range. It's about keeping the range fresh and exciting and constantly rotating the tail of our range. Our top 12 or 15 soups will remain the same for years to come probably.

j-f: There are advantages to innovating through the introduction of new varieties. It is often viewed as the safest, most cost-effective form of innovation. Did such concerns inform your decision to expand the existing line, rather than expanding into new areas?

Munby: We are the experts in chilled soup. We created the category. We are the number one brand, so that is really our core competence. Expanding into new areas is something that we have tried in the past to extend the NCG brand into other categories. We have had some successes, we have had some failures in extending the brand into other areas, A common statistic used is only one in ten product launches actually succeed. I think branching out into other areas is always going to be more risky and more costly. This winter is about concentrating on our core area - which is fresh soup.

j-f: A lot of the varieties you are bringing out seem to be 'old favourites' - things like Scotch Broth. Was that a deliberate move?

Munby: We wanted to provide a mix of some new, different, exciting soups but also some timeless classics. Soups like Scotch broth and oxtail are pretty well represented in ambient soup, in canned soup, but no one has really done them very well in chilled soup.

There are lots of people out there who are only buying tinned soup and not fresh soup. Something like Scotch broth and oxtail will hopefully attract consumers who are familiar with those soup in tinned soup but are willing to try the fresh version because of the fresh attributes that will deliver a perceived better quality and taste than the tinned variety.

j-f: In ambient, we have seen the likes of Baxters looking to make their offering seem more sophisticated in order to broaden their appeal. Is ambient becoming more of a challenge to fresh soup? Is there a competitive relationship between the categories?

Munby: When we came into the recession our concerns were around the perception of chilled soup being a lot more expensive than ambient soup - and that people were regressing back into tinned soup because it's seen as better value for money and you haven't got worries about shelf life. But we haven't really seen that. The number of people who have bought into ambient and fresh has actually grown over last winter. Chilled soup still represents really good value for money. The average unit price in chilled soup is about GBP1.50, and that is for a 600g carton. You have a two-portion meal solution there, so actually when you compare chilled soup to ready meals and any other convenient meal solutions it still represents really good value. That is why we haven't seen people regressing back into tinned soup; we have actually seen the migration continue to be the other way.

j-f: Do you think chilled and ambient soup also, to an extent, cater for different niches?

Munby: They do serve different functions. Chilled is obviously a planned occasion because it's got a short shelf-life, so when you are shopping for chilled soup you are thinking about when you are going to eat it - whether it's Saturday lunchtime or a quick meal during the week. I think tinned soup plays a role for stock loading the cupboard for those emergencies, but chilled soup is more of a treat and much more of a planned occasion.

j-f: Since the onset of the recession, has soup proven to be a resilient category?

Munby: All the data that we get would suggest that it has held up really well. The category is still growing at 6% in value year-on-year. We've seen big penetration gains by the category this year - more people are buying it than ever before. All our main measures in the market are all pretty positive at the moment, so it would absolutely suggest that it's been a resillent category during the recession.

j-f: Has competition intensified around price?

Munby: We've seen a change in promotional strategy over the past year, which has probably been mirrored right across the trade. A lot of the promotional activity has gone into money-off, deep-cut, single-price promos rather than multi-buy deals or value-added promotions. In that sense it has got more competitive on price, simply because the retailers are wanting to offer a better bargain and consumers are definitely shopping for promotions much more than they used to.

j-f: Has this had much of an impact on your margins or have you been able to offset the expense elsewhere?

Munby: It has had an impact on margins because we are offering deeper-cut promotions to the trade. We are not in the business of reducing the quality of our product to compensate for that. The new soups that we are bringing out this year contain protein, and red meat at that, which is an expensive raw material. We are actually investing more money in the quality of our soup. If you are promoting deeply at the same time then the natural consequence is that there is going to be a margin impact.

j-f: Over the past year, we have seen quite a few launches into the fresh soup category and the expansion of smaller players, such as Glorious. Is it becoming a more crowded space?

Munby: I wouldn't say it is. Heinz have come and gone. Their Farmers Market range exited chilled soup in about February. There are one or two secondary brands, which have expanded their distribution over the past year - you mentioned Glorious, Yorkshire Soup is another one. But the organic brands in the category have declined heavily and almost disappeared. Simple Organic went bust. Duchy Originals is declining heavily. If you look at the value share of the market, 94% is split between NCG and own label. So in that sense, I would say it has become less congested over the last year.

j-f: What role does private label play in the chilled soup category?

Munby: All of the major retailers have price tiering amongst their own-label range so they can act as an entry point to the category. Tesco in particular have focused on the discount level within the market. They launched a discount brand, called Oak Tree Estate, which is their entry point. Their [retailers] standard own-label ranges mirror what we are doing on the brand but offering a cheaper version. The premium ranges like [Sainsbury's] Taste the Difference and [Tesco's] Finest offer something a little bit different at a premium price.

j-f: Is competing with retailers' own brands becoming more of an issue given the challenging economic conditions?

Munby: It is a challenge that has always been there. Since the chilled soup category first came about in the late eighties, early nineties has had one name brand - New Covent Garden - and own label. There is still the battle between branded and own label but I think that it has intensified over the last few months with retailer focus on own label. Sainsbury's Switch and Save, for instance, targeted New Covent Garden.

j-f: What are you doing to fight off this challenge?

Munby: Because we are the brand leader the onus is really on us to talk to consumers about the benefits of fresh soup. We do things that own label can't do. We talk to consumers, we engage with them on a one-to-one basis about our product, we advertise, we go out and sample. We have a programme called 'Soup of the Month', bringing a new soup every month and that gives us a good PR tool because there is always something new and exciting as a fixture. Our total marketing activity is what differentiates us from the own label offering.