Friday's column -- which discussed the latest results from Campbell Soup (NYSE: CPB) and asked the question "Why aren't you eating soup?" -- resulted in a surprisingly large number of responses. E-mail flowed into Fool HQ like water over a dam, and the sleepy Campbell Soup discussion board bubbled quickly to life. Many of you have specific reasons why you're not eating soup.
The number one response went along these lines, sent from a reader: "The answer to why I am buying less Campbell's soup lies on the back of every can. Nutrition Facts: A can of beef with vegetables and barley contains 920 mg of sodium. Way too much for me."
And this response: "About six years ago I noticed Campbell's soup was using sulfates in their mix as a preservative. I am one of the 14% to 20% of the population that is allergic to sulfates. Perhaps you can say that people eat out more, but take a look at the organic food grocery stores and you'll see customers frequently buying soup without sulfates."
Dozens more followed, so the most common response as to why you're not eating Campbell's soup was due to health concerns. A surprisingly large number of you took the time to write that the soup has too much sodium for you. Meanwhile, only one person mentioned Campbell's fairly new "Healthy Request" line of soups, which are meant to serve the health-conscious consumer.
To me, this indicates that either the Healthy Request line is not advertised well enough or is not displayed well enough. At grocery stores that I've visited, the Healthy Request soups are close to the traditional condensed Campbell's soups, but they are still off to the side of the regular cans and not easily recognizable as "healthy" Campbell's soup unless you take the time to stop, look, and read. Or, perhaps most of you didn't mention Healthy Request because Healthy Request isn't healthy enough for you. Or maybe it's too expensive compared to regular soup. For whatever reason, many people don't eat Campbell's soup for health reasons, and they have not switched to Campbell's Healthy Request.
The second most common reason why you're not eating soup went along these lines, as shared by a reader named Joan: "I quit buying canned soup for my lunches five years ago because the price for a can became ridiculously high. The price increases were nonstop for a while. (The price hikes have been a lot more than inflation over the last five years.) I can afford it but I will not pay $2.49 for a can of Campbell's Chunky Soup that is barely enough to serve two people. Soup is easy to make and homemade soup tastes better. I still eat lots of soup but I do not feel ripped off."
And this response from Earl: "I can tell you why people aren't buying as much soup. The answer is C -- Price. That is my final answer. It's all in the price, my friend, and what consumers consider unreasonable. You go into the market wanting soup and find those little ol' cans selling for over $1.00 each and some are more than $1.89 and that is dumb. With me, if I can buy a can of noodle soup for between $0.50 and $0.75 then I don't bother making my own."
It's true that Campbell's management has steadily increased soup prices the past decade, and in its recent initiatives regular small price increases were a large part of hitting its annual growth goals. Judging from the volume of e-mail and posts that complained about price, this pricing strategy has backfired with at least some consumers.
The number two soup, Progresso, is priced similarly to Campbell's, but store brand soups are typically considerably cheaper. From e-mail, however, it did not sound like the cheap, generic brands are the problem. People who wrote simply forewent purchasing soup when Campbell's cost too much. Instead, they made their own soup or lived without it. (This may indicate how strong Campbell's brand is.)
The other reasons that you're not buying soup don't get any more encouraging, but less so. More than a few Fools said that they do not like the new recipes that Campbell introduced to some of its popular soups. Like New Coke, the soups aren't as good as they used to be. (I noticed this, too, with one soup last year.)
Other Fools don't like the new soup can design. They resonated with the old Campbell design because they have known it since they were children. They don't feel any attachment to the new cans, however, and thus they have less of an impulse to make a purchase. It is easier to walk by now. Again, as with New Coke, it appears that the design change backfired with many consumers. So, can Campbell bring back the old taste of some of its popular soups that it changed, and bring back the old can design? Maybe that would help.
As far as we know, however, this isn't in the plan. Instead, Campbell is focused on new, portable (on the go) soup containers (it must compete with convenience foods like bars, wraps, and sandwiches -- not easy). Campbell may also be focused on job cuts. Today, Campbell rehired Edward Walsh on an interim basis. The stock rose because Walsh is known for cutting jobs. Employees, on the other hand, are reportedly concerned. (George Runkle wrote about a demoralized work environment under job cuts in his Monday column.)
Finally, only one Fool wrote to blame something other than Campbell for slow soup sales. The culprit: a very warm winter. "How does Campbell expect people to buy their products? Reverse the weather scenario and you'd see their profits and stock going through the roof!"
To recap, nearly all of you wrote that you're not eating soup because of one of these reasons:
- Health concerns. The soup's sodium is too high.
- Price. Prices have risen too much.
- Taste. You don't like some of the new recipes.
- Design. The new can design doesn't speak to you.
Obviously this is a limited study, and it wasn't even a planned study. But it still seems to hit a few targets and imply a few conclusions (such that Healthy Request has failed to reach many health-concerned consumers).
If health is such a large issue with consumers today, what does that mean for our investment finalist PepsiCo (NYSE: PEP), which sells sugar water and salty snacks? And why did its Frito-Lay division have record results last quarter? We'll take a renewed up-close look at Pepsi on Friday. Until then, we'll be on the discussion boards. (I'm TMF Jeff on the boards.) Fool on!