1. Soup
May 2010

2. Key themes
How have the two driving forces of the soup category, health and convenience impacted on sales?
What role has new product development played in the soup category?
How are manufacturers responding to government pressure to introduce healthier soup ranges?
What are the key things that influence the type of soup format consumers buy?
When are the main occasions consumers choose to eat soup?
© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.

3. Summary “Soup-er” sales help category growth
The UK retail market for soup has experienced strong growth with sales increasing by 11% between 2007 and 2009 to reach £511 million
The canned soup sector was hit by rising steel prices, which added to the production costs for canned soup manufacturers
Heinz grows its share
Heinz has continued to dominate the soup market, and has contributed significantly to the soup category’s growth
As consumers tighten their belts and find ways to cut costs, manufacturers have been taking on the high street sandwich chains with portable, healthy and cost efficient soup ranges
Consumer soup preferences
Soup penetration has continued to fall, especially as the category faces competition from a widening choice of convenience meal and snack options
Soups in tins and pouches have the highest penetration; however these formats have experienced the sharpest drop in penetration compared to dry packet soups and chilled options 2
© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.

4. Internal Market Environment
The seasonal nature of soup consumption has meant that manufacturers are heavily reliant on the winter months for sales
Consumers are returning to their kitchens as the current economic downturn prompts them to cook from scratch at home more often
Soup
The growth in convenience foods has been a counter-trend to the increased incidence of scratch cooking
Salt levels in food have been an important issue that the Food Standards Agency has been tackling
© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.

5. Broader Market Environment
Canned soups have been affected by the rising cost of steel which is used in the production of soup tins
The number of one-person households will experience the greatest growth in the next five years
Soup
The number of adults in full-time employment will increase by an estimated 2% in the next five years to 2015
The growth in the number of ABs offers opportunities for fresh soup as these consumers take into account the freshness and quality of ingredients 4
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6. Strengths and Weaknesses
Canned soups have a long shelf life, and are therefore a store cupboard favourite for just over half of all consumers
New product launches in microwaveable formats have added more convenience to the ambient wet soup category
Soup offer consumers a value for money quick snack or meal
The chilled soup sector has continued to experience an increase in penetration as chilled soups meet consumer demand for a fresh and healthy meal
Soups offer consumers a versatile meal that can be customised to suit individual tastes
A wide range of soup options to suit different tastes, and at a wide range of price points
High brand awareness with leading brands like Heinz dominating the market, also ensuring brand loyalty
Limited innovation in reduced salt soup options, compared to other markets like the USA and Canada
The continued reliance on price promotions in the chilled soup category will erode margins in the long term
Some soup ranges have been found to have unacceptably high levels of salt
The seasonal nature of soups leaves retailers and manufacturers overly dependent on the colder winter months to drive sales
Poor in-store merchandising has meant that cross-category sales opportunities are not being fully exploited
Retail sales of soups face strong competition from sandwiches, as well as soups sold in high street sandwich chains
Manufacturers have limited their marketing support for their core brands, with new product launches receiving limited above the line support in 2009
© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.

7. Who’s Innovating ?
New product innovation in the soup category was dominated by launches of ambient varieties
Dried soups have fallen behind in new product development, despite their ease of use and preparation
The need for convenience has been a key element of new product launches, with the microwave easing the way for convenient formats like plastic packaging and cartons
Branded manufacturers like New Covent Garden Food Co and Heinz dominated new product launches in 2008, with Sainsbury’s leading innovation in 2009

8. Forecast of UK Retail value sales of soup, 2005-15
Market Value and Forecast
Forecast of UK Retail value sales of soup,
Retail value sales of soup in the UK experienced strong growth, increasing by 11% between 2007 and 2009 to reach an estimated £511 million
Soup is seen as the ultimate in comfort food, and wet summers and recent cold winters had a positive effect on soup sales
Branded manufacturers like New Covent Garden Food Co. as well as Heinz have actively launched new product ranges, expanding the flavours and variants available to consumers
Source: Mintel
© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.

9. UK retail sales of soup, by sector, 2005-09
Segment Performance
UK retail sales of soup, by sector,
The chilled soup category experienced strong sales growth in 2009, helped by continued new product innovation from category leader New Covent Garden Food Co.
Cans have seen their share of sales rise as retailers like Baxters re-launched their ranges with new packaging
A key driver of sales in the dried soup category has been convenience; however, dried soups are not thought of as being as healthy as chilled soups.
Source: Mintel
© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.

10. Branded soup manufacturers market shares, 2005 – 2009
Source: Mintel
Heinz has continued to dominate the soup market, and has contributed significantly to the soup category’s growth
The relaunch of the Baxters soup range in 2009 aimed to re-energise interest in the brand’s premium range, with new packaging and recipes
Symington’s Ainsley Harriot inspired instant soup range outperformed the dried soup category
New Covent Garden soups have continued to dominate the fresh soup category, tapping into consumer demand for healthy soups 9
© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.

11. Main monitored media spend on soup, 2006-09
Brand Communications and Promotions
Main monitored media spend on soup,
* January – April 2010
Source: Nielsen Media Research/Mintel
Advertising support declined from £5m million in 2007, to just under £1.5 million in 2009
The sharp drop in spend occurred as brand like Baxters and Heinz reduced their support of the core product ranges
Up until 2008, TV was the dominant medium used by soup manufacturers, however from 2009, press accounted for just over half of all media spend
© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.

12. Soup usage
Consumption of soup in the last 12 months, by soup format,
Base: adults aged 15+/users
Soup penetration has continued to fall, especially as the category faces competition from a widening choice of convenience meal and snack options
Soups in tins and pouches have the highest penetration; however this format has experienced the sharpest drop in penetration compared to dry packet soups and chilled options
Across all the soup categories, more than half of all the consumers are light users, consuming soups once a month or less
Taken from the TGI survey of around 25,000 adults
Source: GB TGI, Q1 Kantar Media UK Ltd (Oct-Sep)/Mintel
© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.

13. Soup occasions Soup is lunchtime favourite for two thirds of consumers
Occasions when soup is eaten, January 2010
Base:1,000 Internet users aged 16+
Soup is lunchtime favourite for two thirds of consumers
Convenience plays a significant part in the consumption of soup, as consumers move towards more informal meal occasions
Consumption of soup as a snack is highest among the over-45s, and low among the under 25s
Just under a fifth of consumers use soup as a cooking ingredient
Source: Toluna/Mintel 12
© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.

14. Soup formats: Factors taken into account
Factors taken into account when choosing a soup format, January 2010
Base:843 Internet users aged 16+ who eat soup
Cost is the most important factor when buying soup
A recurring theme for consumers when choosing a soup format is freshness and quality of ingredients
Source: Toluna/Mintel
© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.

15. Soup attitudes and Motivations
Attitudes to soup, January 2010
Base:1,000 Internet users aged 16+
Canned soups appeal as a store cupboard favourite appeals to just over half of all consumers
About two-fifths of consumers eat soup when the weather is cold, while just under a third eat it all year round
Two fifths of consumers make their own soups from scratch at home, with a tenth customising ready prepared soups
Source: Toluna/Mintel 14
© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.