Just add water: To improve sales, Campbell remakes its condensed soups - NewsOn6.com - Tulsa, OK - News, Weather, Video and Sports - KOTV.com |

Just add water: To improve sales, Campbell remakes its condensed soups

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CAMDEN, N.J. (AP) _ When Campbell Soup Co. began selling its condensed soups in their red and white cans, it couldn't have been easier _ just add water and heat.

But this convenience food has been surpassed by even more convenient foods, and now the company is trying to convince the public that its products, including stalwarts like alphabet soup, are really M'm! M'm! Better!

Campbell isn't relying on advertising alone. It's making changes to the soups themselves in an effort to stop consumers from defecting to other foods.

The alphabet soup, for example, now has 40 percent more letters and the vegetable chunks are crisper.

Doug Conant, who became Campbell's CEO nearly two years ago, said the company does not expect to revolutionize dinner tables.

``Our goal is to stabilize our condensed soup business,'' he said.

Sales of Campbell's condensed soups have been falling between 1 percent and 2 percent a year, canceling out some of the growth in other businesses for Campbell, which also sells Pepperidge Farms cookies and crackers, Pace picante sauce and Godiva chocolates, among other brands.

Whether the changes are enough to stabilize sales could determine the fate of the condensed soup market, some analysts say.

Andrew Lazar, an analyst for Lehman Brothers, said if the soup upgrades flop, the company will have even more soul-searching to do.

``Does this management team throw in the towel on condensed?'' Lazar asked.

Campbell officials say condensed soup, with sales of around 1 billion cans a year in the United States, is here to stay no matter what. Three soups _ tomato, chicken noodle and cream of mushroom _ are among the 15 best-selling products in U.S. supermarkets, company officials said.

Campbell has tinkered with its soups before _ adding more chicken to the chicken noodle, for example _ but the company has never had an overhaul like this. It is midway through a three-year plan to improve the soups.

So far, 10 vegetable soups including its minestrone, vegetable soup with alphabet-shaped noodles and Southwest-style chicken vegetable, have been revamped. Next year at this time, the company plans to have 14 more soups reconstituted using the same process.

In the past, Campbell's soups have been in plants roughly the way people at home would make soup from scratch: in one big pot.

The company is now using a new cooking technique, called ``cold-blending,'' which allows different ingredients to be added at different points in the process and some ingredients to be cooked less. The result is a soup with a clearer broth and crisper ingredients.

Walter Gordon, 72, of Cinnaminson, tried some of the new vegetable beef for lunch recently and said he liked it because it was meatier than the old version.

``If they say that they're making similar changes in the others, I'd be inclined to try them,'' said Gordon, the retired provost of Rutgers University's Camden campus.

A group of financial analysts also tried the new soups a few months ago. Lehman Brothers' Lazar said he was impressed, but with a caveat: ``It was still condensed soup.''

The changes are expensive. The company won't say exactly how much the new equipment that makes them possible is costing, but it spent $300 million to upgrade the technology in all its plants during the fiscal year that ended July 31.

Analysts say store brands have improved their quality over the years and cut into Campbell's business, particularly in the condensed market. But the company thinks the changes will put Campbell in a better position.

``It's going to be very much harder for our competitors to follow,'' said R. David C. MacNair, Campbell's chief research officer.

Analyst Mitch Pinhero, who follows Campbell for Janney Montgomery Scott, said that beyond changing the soups, ``there's not a whole lot more they can do unless they cut prices.''

The company also needs to make its products easier to find. In a supermarket in Maple Shade recently, two shoppers stared at the soup section and complained about the difficulty at finding what they wanted from the sea of varieties all in red and white cans.

Campbell's knows about that problem and has tried to fix it. Business director Michael J. Ferry said about two-thirds of the nation's supermarket chains have agreed to at least some of the company's proposed new soup organization principles, which call for grouping soups by brand and flavor group.

If the changed taste and organization of the condensed soups doesn't draw customers, Campbell's has one more trick to attract buyers interested in convenience: putting on easy-open tops that will make can-openers unnecessary. It's already in place on the company's ready-to-serve varieties.
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