The current image of soup is that of something between a snack and a meal. And that emanates from a blend of high frequency marketing and production innovation, which have repositioned the category and added versatility to the product’s previously sterile image.
Tangy tomato, creamy mushroom, babycorn and spring onion, sweet corn chicken, Thai lemony noodle, creamy chicken, chicken malai tikka, hot and sour chicken, mixed vegetable and so on. Well, this is no multi-cuisine menu of an eatery but a sample of the wide range of cook-up or easy-to-cook soup mixesavailable in the market today. Strolling down the supermarket aisles or in traditional grocery stores, one can now be flooded with choices of easyto- cook soup mix packs, offering something to match everyone’s taste Buds.
Over the years, supported by advancements in food processingcoupled with manufacturer interest in matching the pace of changing consumer preferences, the soup category has evolved significantly in India. According to a study by Euromonitor in September 2008, the soup category is comparatively small in India, but grew at a rapid pace of 16 percent CAGR between 2003 and 2008. The category registered even faster growth during the year 2008 at a rate of 20 percent. Some market observers, however, are even more generous in their estimates. Ajaay Gupta, MD, Capital Foods, for instance, says, “The cookup soups market size is estimated to be around Rs 100 crore for the year 2008-09 at retail level, and is growing at a satisfactory rate of 30 percent year on year.”
Referring to data from AC Nielsen, Thomas Varghese, CEO of Aditya Birla Retail believes that the market size of the category is Rs 156 million (metric tonnes). “This works out to approximately 25 percent of the instant food segment,” he adds. “It is a rapidly expanding category.
While penetration levels are currently low, there is huge latent potential in the segment. Currently, it is not as sharply segregated as you would witness in western and other oriental countries but consumer acceptability is growing rapidly. Also, as children are the key audience and they are enthusiastic on trying new products, novelty becomes an important factor. Hence the category is bound to see experimentation in terms of new products and flavours.”
So, what has driven expansion and innovation in the soup category? Enumerating the factors propelling expansion in the category, Guptasays, “Firstly, over the last few decades more and more Indians have travelled abroad and experienced varying food habits, including consumption of soup, which led to the introduction of soup consumption in the country and later induced manufacturers to innovate in the segment.” “Secondly, the large media exposure and access to various food channels have directed Indians towards the consumption of foreign cuisines, apart from just staples and traditional Indian snacks.”
The soup is not a typical Indian food item; even to make a basic tomato soup, one first needs to blanch tomatoes, peel them up and so on, which could take up to a good hour. In many urban homes, soups were prepared only to feed an invalid or an ailing person. Indeed, many households still regard the soup as a quasi-medicinal food.
“In case of the more complex variants such as Chinese lemon coriander etc, typically housewives either do not know how to make them or the process appears too complicated and time-consuming,” Gupta points out. “Cook-up soups offer an advantage of choice and convenience. This has certainly driven the proliferation of ready soup mixes.”
Until fairly recently, soups were mostly consumed outside the home – at a party or in a fine dining restaurant, as an appetiser to the main meal. For the few consumers who did consumer soup once in a while, the broth was cooked at home, but most restricted experimentation to conventional tomato and vegetable soups – they were either unaware of other recipes or simply wanted to avoid the complexities of concocting a more exotic variant..
The entry of multinationalbrands in the category has lifted the soup’s earlier indifferent existence to one that is aggressively advertised on various planks, and whose popularity has soared by leaps and bounds. Most of the growth has, not surprisingly, been driven by Indians’ rising affinity for processed foods. Easy-to-cook soups are therefore, increasingly finding their way to dinner tables across India and are now being positioned as anywhere, anytime nutrition-rich snacks. Making soup is now as easy as opening a pack, pouring the mix into boiling water and stirring – literally a matter of minutes.
Having said that, soups are far from becoming a year-around, pan- India favourite; that is a scenario that cannot be expected in all fairness given the Indian food habits. However, there are distinct consumption patterns emerging – both geographically and seasonally.
“In winters consumption of ‘hot’ foods goes up substantially,” says Capital Foods’ Gupta. “For instance, in North India (specifically in Delhi), soup sales peak during winter months. However, and this may surprise many, when we looked at the sales figures for the same time period in Bangalore and Chennai, we found that the statistics were the same as in the North! But the concept or theory that soups are a winter phenomenon is very strong and drives sales during the season in the regions affected by weather changes.”
Gupta reveals that when Capital Foods rolled out the Ching’s Secret soup range in April 2008, most retailers criticised the move, calling it an impractical strategy as they were launching a ‘winter food’ in summer. “But our understanding of business and strategy told us that Chinese is largest cuisine consumed out of home in India. Therefore, there is no weather phenomenon to the consumption of Chinese cuisine – Indians eat Chinese food in summer, in pouring rain and even in winter. We believed that seasonality would have no role to play in demand for Ching’s Chinese soups,” he adds.
Varghese agrees. “As soups are consumed hot, cook-up soups typically become more popular in winters. But the soup is now being seen as a healthy option for all seasons,” he says.
The consumption trend also suggests that packaged soup mixes are not considered as affordable by many lower middle-class families. Upwardly mobile families and affluent households are more willing to spend more on convenience and taste. In sync with this, consumption is driven by tier I and metro consumers. Commenting on the consumption pattern, Varghese says, “Soups are certainly more popular in metros and big cities. They are consumed in the urban markets in all the regions – Mumbai, Kolkata, Delhi, Pune, Hyderabad and Bangalore.”
Further, elucidating on the affordability factor, he adds, “Convenience as a value proposition appeals more to the urban consumers, who are ready to spend higher than usual. A private label however, increases consumer acceptability across various segments by delivering quality products at comparatively lower price points. Through our privatelabel soup ranges, we hope to generate faster acceptance in smaller towns as well.”
“In today’s economic scenario, (where many businesses are logging lower revenues, there is uncertainly about job security) many families are reining in their out-of-home entertainment spends, including on eating out. But, if someone still wants a Chinese food experience, they can bring a pack of Ching’s soup priced at Rs 30. This pack makes six bowls of soup; the cost works out to be Rs 5 per bowl, a very reasonable payout. This is what has been driving the category. For a middle-class family the packaged soup mix is a heaven-sent,” Gupta explains.
Brands Truly Progressive
The Indian story of packaged soups dates back to the year 1989, when Nestle India first introduced convenient packaged soup mixes under the Maggi brand. In the past 20 years, Nestle has considerably enhanced its initial limited range. It now offers distinct variants under three categories within the Maggi Healthy Soup label. Maggi soups contain real vegetables, are low in fat, low in cholesterol and are free from synthetic colours and monosodium glutamate (MSG). The variants have been appropriately categorised as Chef Style, Home Style and Chinese style:. Variants included in Chef Style are: cream mushroom, sweet sour tomato noodles, and tangy tomato vegetable; three variants are offered in Home Style – creamy chicken, mixed vegetable, and rich tomato. The Chinese Style soups have hot sour chicken, sweet corn chicken, sweet corn vegetable, and hot and sour vegetable. Some more variants have been added to the existing range in recent days.
Apart from these, Maggi’s soup portfolio also offers a range of healthy instant soup mixes called Maggi Healthy Soup – Sanjeevni. This Sanjeevni range consists of four variants formulated with traditional ingredients such as amla (gooseberry), badam (almond), spinach, dal (pulses) and tomato. Sanjeevni variants are available in convenient single serve packs and are instant; one just needs to add hot water to the contents in the pack to make a cup of soup.
According to Euromonitor, Nestlé India is the second largest player in soups, holding a value share of 31 percent, with its Maggi Brand. Knorr, the most popular and one of the largest selling soup brands in the world, is considered to be the category king in the Indian soup market. From the Unilever stable now, it was born in 1838 in Germany.
Knorr forayed into the Indian market in 1997 through International Bestfoods Ltd, a wholly owned subsidiary of BestFoods Inc, which owned Knorr brands worldwide. In 1998, the company launched yet another soup offering – Knorr mixed vegetable soup. The new, thick and creamy soup was 100 percent vegetarian and contained a healthy mix of vegetables such as carrot, cabbage, capsicum, spring onion, potato and kasuri methi (fenugreek).
However, much excitement in the brand portfolio did not take place until the year 2000, when Unilever acquired Knorr from BestFoods Inc. Today, as a part of Hindustan Unilever Ltd., the range of Knorr soups comprises various types – oriental, Indian and continental. Knorr soups come in a four serve packs and are available across the country. These soups can be prepared in a few minutes and the consumer can enhance the taste by adding vegetables or garnishing as per choice, as they can even with Maggi soups.
Knorr’s portfolio currently offers a slew of exciting flavours – thick tomato, tangy tomato, Chinese veg tomato, sweet corn veg, hot and sour veg, creamy mushroom, sweet and sour noodle, Thai lemony noodle, mixed veg, sweet corn chicken, hot and sour chicken, chicken delite, chicken noodle, Thai curry noodle, chicken malai tikka, Chinese chicken and mushroom, and more.
In addition, the brand also has two-serve packs in thick tomato, tangy tomato, sweet corn veg, sweet and sour noodle, Thai lemony noodle, hot and sour chicken and chicken noodle flavours.
Among the recent entrants to the category is Capital Foods. Under the brand Ching’s Secret, it forayed in the cook-up soups segment in April 2008. Ching’s Secret signifies authentic Chinese formulations, created with in-depth research and knowledge of oriental Chinese cuisine. In a short span, Ching’s soups have become a popular name in the category, holding considerable retail share. Its soup portfolio currently offers sweet corn veg soup, hot and sour veg soup, hot and sour chicken soup, mix vegetable soup, sweet and sour soup, sweet corn chicken soup, manchow soup, lemon coriander soup and Beijing soup. “Three months from the launch of our range we were holding around four percent market share; today we hold close to 30 percent share in modern trade,” Gupta says.
The steady rise in the consumption of soups, especially byconvenience-driven consumers, offered a ground full of promises for Aditya Birla’s food & grocery retail chain More to launch a private label in the category.
Elaborating on the reason that influenced the corporate giant to enter the segment, Varghese says, “The private label initiative at More has been focused on delivering exceptional value to the customers. This also means that we want to provide a comprehensive range under private label brands. Soup being a fast growing category showed consumer acceptability and we decided to offer soups as well through our private label Feasters.”
Today, Feasters offers five delectable variants – thick tomato soup, hot and sour, vegetable soup, mix vegetable soup, creamy chicken soup and sweet corn vegetable soup. South India-based MTR Foods Limited is another player in the category, which at present offers a range of six heartwarming and healthy easyto- cook soup mixes – babycorn and spring onion, spicy tomato, mixed vegetable, simply tomato, mulligatawny and spinach and carrot. However, this brand is more ubiquitous in southern Indian markets for now.
Bambino Agro Industries Ltd, the pioneers of shortcut vermicelli and a leading player in vermicelli and pasta, also introduced a range of instant soup mixes under the brand name Bambino. Bambino soups are especially created to suit the Indian palate. All Bambino soups are 100 percent vegetarian. Its soup portfolio has three variants – tomato, sweet corn veg. and mixed veg.
Campbell’s, Bachelor’s, Thaitan Foods International’s Real Thai and Heinz are the imported brand in the category. These brands offer instant, microwavable and easy-to-cook soups. In 2002 Gujarat Co-operative Milk Marketing Federation (GCMMF), started test marketing packaged heat-and-serve soups under the brand Masti. In 2003 Masti soups were soft-launched in Gujarat and the plan was to effect a national rollout within the next few months. Masti soups were priced at Rs 30 for a six-serve, one litre pack, which worked out to Rs 5 per serving.
Besides the proliferation of convenience- driven lifestyles and the array of variants, advertising and marketing too have played significant roles in enlarging the category. Extensive deployment of ATL and BTL tools by manufacturers and marketers have certainly pushed awareness and demand for ready soup mixes.
Nestle India, for instance, has been aggressively promoting its Maggi soups through high-frequency television spots, which have played a great role in not just communicating the benefits of the product to target consumers, but its “Taste Bhi, Health Bhi” tagline has also helped elevate the profile of the category. Soups under the company’s Sanjeevni range, on the other hand, are positioned as wellness meal solutions.
HUL has been banking extensively in employing various mass media to promote its Knorr range of soups. Analysts point out that it was due to the creative and intelligent positioning of the brand in mass media that Knorr developed into the leader of the category in India.
Euromonitor’s research tells us that Hindustan Unilever gainedshare in the category in 2007, thanks to its aggressive marketing strategies, strong distribution system and the wide range of flavours. “Hindustan Unilever further benefited from a realignment of its flavours of Knorr soups under the Snacky, Oriental and Classic ranges, to make it easier for consumers to make buying decisions, as they were now less confused about the different flavours. The company has focused on distribution channels to popularise its new range by ensuring that its upmarket international flavours in the Oriental and Snacky ranges gain greater visibility in modern outlets, while its Classic range is more visible at kirana stores and in smaller towns and cities,” it States.
The report further highlights the fact that in terms of media promotions, both Knorr and Nestle have been focusing on conveying the taste and health aspects of their soups for the entire family. In 2008, Hindustan Unilever introduced a new advertising campaign, which turned the conventional middle class Indian household image on its head. The campaign for Knorr featured a man making Knorr soup for dinner for the entire family, but mainly to lift the spirits of his wife – upset and tearful watching a weepy soap opera on the telly. With this advertisement, the company not just pitched Knorr as a ‘feel good’ food, but also promoted its user friendliness.
Capital Foods has also been very active and persuasive in promoting its brand. Describing the advertising strategy, Gupta says, “During the last 10-15 years it has been witnessed that most Indians have learned to consume soups through the Chinese cuisine route. Which is why our soup range is a core Chinese range. ‘Ho jaye Chinese tonight’ is what we are selling and that is our tagline. Our motive is that someone who wants to have Chinese soup should consume only Ching’s Secret soups.”
“All the nutritional information and health aspects are mentioned on the packs but we are promoting our range purely to offer something that will gratify the demand for Chinese cuisine. It is the Chinese taste that should drive Ching’s sales,” he adds. At the retail end, employing strategic merchandising strategies and in-store promotions to endorse the product features are also essential. So what is happening in the store? “Well, merchandising at the retail end is certainly important as the category is still not the part of shopping list of Indian housewives. Smart merchandising at the retail end can also generate interest and impulse purchase,” Gupta confirms.
According to Varghese, as the soup category is still evolving, it is important to drive penetration and induce trials. “Merchandising is the key to drive this category. You would see lots of cross promotions, bundled offers and other kind of promotions in soups. Product features / USPs can be communicated through instore communication,” he says.
“Companies also use especially designed outer cartons as a communication medium; this serves the dual purpose of visual merchandising and stocking on shelf. We have also initiated wet sampling in some markets periodically. This acts as a feedback mechanism too,” he adds.
Way to Go
Comparing and analysing the market pattern in India and elsewhere, Gupta points out that worldwide, the soup category is bifurcated into three sub-categories – wet soups or ready-to-consume canned soups; cook-up soups or easy-to-cook soup mixes that are largely available in India now; and, instant soups, which Maggi and a few imported brands offer. “In case of instant soups, one just needs to cut the pouch and add water; there’s no cooking involved.
Typically, a market begins with cookup soups and then evolves and moves towards instant and wet soups. So, there is great scope for innovation in the segment; a lot of that will happen in the next three to four years. Also, over the next few years, we can expect to see more MNCs foraying into this category in India,” he says.
“Innovation will be the key to expansion in the category and it will be driven by availability of more flavours and variants. I think there is scope for new players too as the market is growing rapidly,” Varghese concludes.