Soup Market in the United Kingdom-Dissertation Writing Help
Headlines
·
5% current value growth from
2007 to £542 million in 2008
·
Healthy soup boosts growth
·
Chilled soup most dynamic with
9% current value growth in 2008
·
Instant soup sees sharp dip in
growth from 4% current value growth in 2007 to stagnancy in 2008
·
Unit prices increase above
level of inflation in 2008
·
Heinz Co Ltd gains over a
percentage point in value share to lead with 33% share in 2007
·
2% volume decline but 10%
constant value growth expected over forecast period
Trends
·
Towards the end of the review
period, health trends had a major impact on soup. UK consumers became
increasingly conscious of the benefits of leading a healthy lifestyle and as a
result products perceived to be healthy enjoyed a boom, with chilled soup
exhibiting particularly strong growth as a result. Companies responded to this
trend in innovative ways. Premier Foods for example launched Waistline Soup, which
features hourglass-shaped cans to suggest a connection with soup consumption
and a shapely figure, thus emphasising its positioning as a healthy product.
Leading canned/preserved soup players Heinz and Baxter also offer healthy
versions of their products in order to appeal to health-conscious consumers.
·
Soup recorded current value
growth of below 5% in 2008, slightly lower than the review period CAGR. Chilled
soup and UHT soup experienced rapid growth earlier in the review period but
showed growing maturity towards the end of the review period. Growth rates
remained impressive, however, with chilled soup growing at over 9% in current
value terms in 2008 over the previous year due to its healthy image. Dehydrated
soup meanwhile continued to experience decline, suffering from a public
perception of being an inferior quality and unhealthy foodstuff.
·
Growth in soup was driven by
chilled and canned/preserved soup in 2008, which saw current value growth of 9%
and 4% respectively over the previous year. Significant growth reflected
increased health awareness, with leading players reducing salt, sugar and fat
levels, and a drive towards premiumisation. In addition to the presence of
mainstream premium soup brands such as New Covent Garden and Premier Foods’ Loyd
Grossman, smaller brands such as Rod & Bens also gained share.
Canned/preserved soup, although mature, saw resurgence in popularity due to the
reformulation of many recipes and a focus on healthy and unusual ingredients,
such as for Baxters Stilton and White Port soup.
·
The unit price for soup as a
whole rose by over 3% in current value terms in 2008 over the previous year.
Growth was due to rising raw material costs and increasing fuel costs.
Producers were forced to pass on increased costs to consumers due to pressure
on profit margins. In addition, a growing consumer interest in premium soup
further boosted unit prices.
·
Traditional flavours such as
chicken and cream of tomato continued to hold prime position in sales of soup
towards the end of the review period. However, British tastes are becoming more
adventurous. In line with this trend, New Covent Garden introduced a range of
fruit-based soup in summer 2008. The range, retailing in Waitrose stores
nationwide, includes Apple Vichyssoise and Beetroot & Redcurrant and is
designed to be eaten cold. The launch capitalises on strong popularity for
fresh and healthy soup and also the growing acceptance of gazpacho-type soup.
In consumer foodservice, Prêt a Manger also introduced low-fat gazpacho soup
into its range in summer 2008.
·
New product development focused
on increasing convenience and addressing the continuing rise in single-person
households. This saw a surge in popularity for single-serve pouches, which seek
to address the needs of consumers who are eating fewer meals at home. Baxters,
the New Covent Garden Soup Co and Loyd Grossman all launched products in
single-serve pouch formats towards the end of the review period.
Competitive Landscape
·
Heinz Co Ltd remained the
leader in soup with 33% value share in 2007. The company has a longstanding
presence in canned/preserved soup where it dominated with 59% value share in
2007. Heinz offers an extensive range designed to appeal to a wide range of
consumers, including Heinz Big for those seeking more filling soup, Heinz
Weight Watchers for those seeking to lose weight and Heinz Microwaveable Cups
for those attracted by convenience.
·
Heinz also saw the strongest
growth in value share in soup in 2007 over the previous year, increasing by
over a percentage point. The company invested heavily in new product
development towards the end of the review period, with the launch of three new
ranges: Heinz Farmers' Market, Heinz Taste of Home and Heinz Soups of the
World. Heinz Farmers' Market marked the company’s entry into chilled soup,
where the high-profile Heinz brand name ensured an immediate success. The
company thus accounted for 2% value share in chilled soup in 2007.
·
The other leading players in
soup were Campbell Grocery Products Ltd, Baxter & Sons Ltd and New Covent
Garden Soup Co Ltd with a combined value share of 32% in 2007. New Covent
Garden retained a steady share, facing growing competition in chilled soup from
Heinz. However, its introduction of a fruit-based gazpacho range in summer 2008
is expected to reinvigorate the brand.
·
Companies that failed to keep
pace with changing consumer tastes experienced the biggest decrease in 2007.
Baxters suffered from a lack of new product development in recent years and saw
the biggest drop in value share in 2007 over the previous year, falling by over
a percentage point. However, the company sought to ride the trend for snack
foods that are both convenient and healthy and recognised the limits of its
outdated packaging format. The company thus launched new microwaveable pots for
its UK soup brands at the end of 2007. The new soup bowls are packaged with a
heat-proof sleeve, so consumers save on washing up. It also means the pots can
be picked up straight from the microwave. The soups are made with fresh
vegetables such as tomatoes, butternut squash, carrots, beans and lentils and
are free from artificial colourings and flavours. This launch should boost the
company’s share in 2008.
·
Heinz and New Covent Garden
Soup Co were the most significant advertisers in soup in 2007. Heinz emphasised
the health credentials of its products with its “Better Make Some Room”
campaign, which sough to highlight its soups’ increased vegetable content. An
accompanying website encouraged city dwellers to grow their own produce.
Meanwhile, New Covent Garden Soup Co focused on humbling inferior soup with its
headline-grabbing “Ban the Can” campaign. The company’s £3.5 million media
spend also included an on-pack promotion for reduced-price membership of the
Royal Horticultural Society, boosting its natural image.
·
Private label remained strong
in 2007 with a value share of 23%. It is particularly strong in chilled soup
with a value share of 45%, thanks to supermarkets/hypermarkets being pioneers
in this area. However, private label faced growing competition towards the end
of the review period due to strong branded new product development and
marketing. Consequently, private label lost share across soup. It saw a
particularly sharp drop of three percentage points in value share in chilled
soup in 2007 over the previous year, due to the high-profile entry of Heinz to
this product area.
·
Premier Foods Plc, the owner of
Branston Pickle, bought the UK and Irish businesses of Campbell Soup Co for
£450 million in 2006, citing admiration for the iconic and powerful brand image
of the company. Campbell Grocery Products Ltd had the second largest value
share in UK soup with just over 12% in 2007.
Prospects
·
Premium fresh soup is expected
to continue driving growth in soup during the forecast period. This will be
tied into innovative launches targeting new consumption occasions. The overall
trend in packaged food for specifically formulated offerings for children is
likely to take off in soup, with the launch of premium fresh soup targeting
children. New Covent Garden Soup’s range of gazpacho-style fruit-based soup is
also expected to create a new niche, with copycat launches seeking to encourage
the consumption of soup outside of the traditional peak sales time of September
to April.
·
Soup is anticipated to achieve
constant value growth of 10% over the forecast period to reach £596 million by
2013. Growth will be driven solely by growth in chilled and canned/preserved
soup, with these product areas forecast to post constant value growth of 32%
and 5% respectively. Growth for soup will be lower over the forecast period
than seen in the review period. This reflects the growing maturity of chilled
soup and a slowing of growth for canned/preserved soup. Players in
canned/preserved soup will struggle to maintain the pace of new product
development seen during the review period, when there were numerous launches of
premium and/or healthier variants.
·
Soup is expected to continue to
see seasonal sales peaks and troughs. If climate change continues to lead to
warmer summers and milder winters, this could put pressure on the traditional
peak season of sales over September-April, which could hinder growth.
Manufacturers may be unable to convince consumers to purchase cold soup recipes
such as gazpacho in order to fuel year-round sales. Soup sales continue to be
dominated by traditional recipes and it may prove difficult to convince
traditional consumers to purchase new formats.
·
Soup is expected to see a sharp
increase in constant value unit price during the forecast period, with volume
declining by 2% in contrast to the 10% growth expected in constant value terms.
The rising cost of raw ingredients and fuel, as well as an increase in the cost
of tin, will increase costs and thus force players to increase prices. In addition,
players and consumers will continue to focus on premium variants. These trends
are expected to have the strongest impact on canned/preserved soup, where
volume sales are expected to decline by 5% due to a general declining interest
in canned/preserved food, while constant value sales are expected to grow by
5%.
·
Dehydrated soup and instant
soup are expected to continue to see sharp decline during the forecast period,
with volume sales declining by 25% and 18% respectively. These product areas
will suffer due to a growing focus on fresh ingredients, with many regarding
powdered soup as artificial and poor quality. Dehydrated soup is expected to
see the sharpest decline, due to its more complicated preparation. Consumer
demand for convenience will hinder this product area during the forecast
period.
