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Foodies the goal of Go Soup

Line has upscale, fresh ingredients, comes in pouch

– To the average sushi-munching Millennial, Campbell Soup Co. is about as cool as a Buick.

Raised on arugula and free-range fowl by their foodie parents, consumers in their 20s show little zest for soup in the iconic red-and-white can.

So this month, Campbell will unveil Go Soup, a line of ready-to-eat meals, including chorizo and pulled chicken with black beans, in fuchsia-and-white pouches. As befits the company’s first move upscale in about 20 years, Campbell will charge $2.99 per pouch, or about three times the price of a can of its chicken noodle soup.

The question is whether a population grappling with higher-than-average unemployment will pay up for food in a pouch, said Ken Harris, an independent consultant to Campbell and other food companies.

Turning around the soup business is vital for Campbell, which has fallen 2.9 percent over the past 12 months, compared with a 9.8 percent advance for the S&P Consumer Staples Index.

While the company also sells V8 beverages and Pepperidge Farm snacks, soup remains Campbell’s most important product line.

When executives began examining Campbell’s soup woes a year ago, they discovered that though younger shoppers have little money to spend, they nonetheless have high expectations for their food.

They eat out in restaurants twice as often as their grandparents, said Darren Serrao, vice president of innovation for Campbell’s North American business.

College campuses today are surrounded by Thai and Indian restaurants, sushi bars and fusion eateries. As a result, Millennials are “culturally connected,” said Chuck Vila, Campbell’s vice president of consumer insights. “They’re more experimental; they love to sample.”

Vila and his team invited younger consumers to their test kitchens and sent researchers to their homes to watch them cook. The younger consumers were asking for ingredients like coconut curry and gouda cheese, ingredients that have never made it into a can of condensed tomato soup. Hence such new flavors as golden lentils with madras curry

Having traipsed to green markets as kids, Millennials developed a taste for fresh ingredients. So Campbell ditched the cans for pouches, which are already used to sell fresher food.

Millennials typically aren’t as impressed with established brands as their Boomer parents, according to “Trouble in Aisle 5,” a study done jointly by consulting firm AlixPartners and investment firm Jefferies and Co., both based in New York.

To turn Go Soup into a blockbuster product, Campbell will have to convince them it’s worth spending $2.99 on a pouch, according to Scott Mushkin, a senior food and drug retailing analyst with Jefferies. If shoppers perceive Go Soup as an appetizer, say, they may not bite, he said.

“They will pay for the product if it is positioned right,” Mushkin said in a phone interview. “The problem with soup is that it’s thought of as an accompaniment.”

Serrao sees it differently. Just as Starbucks persuaded consumers to pay more for coffee, he says Campbell can charge a premium because the ingredients are more gourmet and offer something that isn’t really out in the market.

Younger buyers haven’t bought much soup because most varieties failed to cater to their finicky palates, he said. While the price may seem lofty for soup, it positions Campbell in a premium spot above the competition and is still affordable, he said.

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