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SOUP'S ON

Ready-to-serve soups are simmering, with both sales and merchandising activity on the increase in supermarkets.The leading manufacturers have been adding to the number of ready-to-serve soups that they offer to meet demand for what consumers increasingly perceive is an inexpensive and highly convenient meal.What's more, many ready-to-serve soups now also are being billed as healthy alternatives, with

Ready-to-serve soups are simmering, with both sales and merchandising activity on the increase in supermarkets.

The leading manufacturers have been adding to the number of ready-to-serve soups that they offer to meet demand for what consumers increasingly perceive is an inexpensive and highly convenient meal.

What's more, many ready-to-serve soups now also are being billed as healthy alternatives, with less fat, cholesterol and sodium than their condensed counterparts. That trend also is helping sales, retailers told SN.

In response, some chains are making more shelf space available to ready-to-serve soup cans. Besides consumer interest, another incentive is healthy retail margins, supermarket buyers said.

Nationally, ready-to-serve soups attracted $925 million worth of sales in supermarkets in the 52-week

period ended May 15, 1994, an increase of 3.4% over the previous year, according to Information Resources Inc., Chicago.

In total, canned soups had supermarket sales of $2.484 billion during that same period, a jump of 4% from year before, IRI's figures show.

The biggest players in the canned soup category are Campbell Soup Co., Camden, N.J., and Pet Inc., St. Louis, with its Progresso line. Other players include ConAgra, Omaha, Neb., with Healthy Choice and Quaker Oats Co., Chicago, with its Pritikin line. H.J. Heinz Co., Pittsburgh, has a substantial share of the private-label soup market.

"The canned soup category has been growing in general, with the major part of the growth coming in the ready-to-eat soup segment," said William Vitulli, vice president of government and community relations at A&P, Montvale, N.J.

"Manufacturers keep coming out with new flavors and combinations of ready-to-serve soups. They are taking up more shelf space, but they warrant the shelf space because the movement is good," Vitulli said. "Years ago the soup department was 4 linear feet, but today, including the packaged instant soups, it has grown upwards of 20 feet in some of our stores."

The market is still dominated by condensed soups, but as Bennett Mark, buyer with D&W Food Centers, Grand Rapids, Mich., put it, "Anything that offers convenience to the consumer is good for our business, and the ready-to-serve soups lend themselves to that.

"The low-sodium and health-related soups that are out there have certainly benefited the category," Mark said. D&W has eliminated some of its boxed soup mixes to make room for ready-to-serve soups. "We typically go through the section in the middle of the summer, evaluate who is doing what kind of business, and make decisions off of that for the winter months," he said.

Peter Jost, a buyer with Harp's Food Stores, Springdale, Ark., said he has had to eliminate many single-serve cans to make room for the increased varieties of ready-to-serve items.

"Single-serve has really gotten trounced on with today's consumer being the way it is. There is still some good validity there; unfortunately, we just don't have the shelf space based on the SKU selection," he said.

Sharon Arrowood, a buyer at C.B. Ragland Co., a Nashville, Tenn.-based wholesaler, said consumers apparently are more willing than they used to be to pick up ready-to-serve cans, judging from movement out of the company's warehouses.

"The whole ready-to-serve segment has done well, and it is because of the convenience they offer, along with the quality being dramatically improved over the last few years," said Bob Ewbank, merchandising manager at Fleming Cos.' Fresno Division, Fresno, Calif., which services more than 200 supermarkets.

Ewbank said soups are currently proving to be an ideal meal option. "Out here, there are a lot of dual-income households that don't have time to cook and that is helping sales."

Jost at Harp's said ready-to-serve soups are also going head to head with "quick meal" foods.

"We are competing against what the consumer is going to eat for lunch or dinner. A soup and a sandwich is a quick meal. Promoting the ready-to-serve segment gives us an opportunity to hedge, because pricewise it will hit that consumer's budget for less than a fast-food alternative," he said.

Robert Kopplin, buyer at Dan's Supreme Super Markets, Hempstead, N.Y., said ready-to-serve soups are being scooped up "by a cross section of consumers, who buy because they like the variety. We have had some success with some of the new healthy soups coming out." The new nutrition labeling requirements are likely to prompt more light items as a growing second generation of the established major brands, the merchandisers said. "People will know what they are eating. I think that can only help some of the lights and create a greater niche," said Ewbank of Fleming.

Bob Rieck, grocery buyer at Seaway Food Town, Maumee, Ohio, said he is seeing healthy soups cannibalize sales of their condensed counterparts. "The margins on these items are better. Being new, they are not being footballed around like tomato and cream of mushroom," Rieck said.

Ready-to-Grow

Ready-to-serve soups make up more than a third of the total canned wet soup market. For the 52-week period ended May 15, 1994, the ready-to-serve segment grew 3.4% to $925 million.

CANNED WET SOUP SALES

In millions of dollars for the 52-week period ended May 15, 1994

Condensed Soup $1,356

Microwave $27

Broth $156

Ready-to-Serve $925