What trends are approaching the soup broth industry?
The Soup Market
Soup – it’s been a staple in our lives from the time we were children. A nice tomato soup accompanied with a grilled cheese, or a hearty bowl of chicken noodle to help fight off a cold. Soup has been around for generations and will continue to be a staple, allowing the opportunity for industry leaders to grow their market share, provided they understand their consumer’s behaviour.
The soup industry is one that has been around for a while with Campbell Soup Company and General Mills Inc. being the industry leaders. While IBISWorld reports a -2.8% decline in total revenue in the United States, as well as a soup sales decline in Canada to $699.9 million in 2017 from $709.4 million in 2012 (reports Financial Post), there has been a growth in the soup industry by 1.6% and projections show the market will have a compound annual growth rate of over 4% by 2024.
Here at Caddle we conducted a survey asking over 10,ooo of our consumers their soup broth purchasing habits which we believe could help explain the current soup broth industry and forecast how it could be improved upon.
For starters, when we asked what is most important when purchasing ready to use soup broth, 35% of our members agreed that taste and flavour was the driving purchasing decision while there was an over-indexing score of 38% when targeting Gen Z consumers. This is interesting as global flavours such as Campbell’s introduction to Pho broth have become a popular choice. With the introduction of popular broths entering their product lines it’s also important to remember that “consumers want their food to be made with recognizable, desirable ingredients,” says Melissa Mendoza, director of marketing for Campbell Canada.
With the Millennial and Gen Z generations making their way to being the majority population, the soup industry may want to consider some newer innovations to increase revenue. To adhere to the demographics wants, Campbell’s has reduced sodium, added vitamin D to their condensed soups and only added ingredients that people can actually pronounce. While this is a step in the right direction to generating more revenue, our survey offers another innovation as well.
When presented with a list of options, we asked our members what product they’d most likely like to try and 30% of members said that they are interested in ready-to-drink chicken bone broth. While we thought this was surprising, after further research we found this data to be accurate when we discovered a +100 search intent on Google Trends. This new innovation is one that is on the rise in popularity for its collagen benefits, support in digestive health and arthritis relief. With a younger demographic wanting healthier options in their soup, perhaps bone broth is one innovation to consider.
When you think of a soup brand perhaps one of the first brands that come to mind is Campbell, Knorr, or Progresso. But much to our surprise, we found that 1/3 Canadians are loyal to their broth brands. So how might a company in the industry increase brand loyalty? For starters, since the soup broth market projected to increase over 4% by 2024 this offers the opportunity for new entrants to be entering into a lucrative industry. On the other hand, this could also create significant competition between industry leaders and new entrants. Therefore in order to generate brand loyalty, it may be important for production companies to consider creating healthy broth alternatives such as lower sodium broths or ready-to-drink bone broth.
Soup has been our lives since as long as we can remember, everyone loves a good soup and sandwich. But no one likes working in an industry that doesn’t know their demographics wants and needs. That is where Caddle steps in. We provide industry leaders with insights that will help them understand market trends and how they can increase revenue and brand loyalty. If you’re a soup broth industry, our insights suggest that there should be a continued effort to create broths that are flavourful and healthy. By creating a flavourful broth that attributes to the health trends such a bone broth, this could allow for the potential for consumers to regularly buy the product and in turn, increase brand loyalty.