Will Campbell Soup Leave a Bad Taste in Consumers' Mouths?
John is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
What do you do when you've created product packaging that's so iconic that it literally became a part of pop culture? If you're the Campbell Soup Company (NYSE: CPB), you realize that your iconic soup cans might be holding you back and create a brand new product with a new look that ditches the can entirely.
Starting this summer, grocery shoppers will start seeing "Campbell's Go Soup" on the supermarket shelves next to classic Campbell varieties. Go Soup will feature trendy flavors intended to appeal to 20-somethings and 30-somethings; one variety that I've seen mentioned so far is coconut curry with chicken and shiitake mushrooms. Unlike the iconic soup cans of years gone by, Go Soup will come in pouches featuring busy graphics that show younger people having fun and enjoying their soup.
There are two primary reasons that Campbell is trying out new soups in pouches. First there's the financial factor... pouches are cheaper to produce than cans, and changing to pouches can save the company up to 15% on its manufacturing costs. Second and almost as important, however, is the fact that Campbell Soup's iconic status is both a blessing and a curse. Marketing surveys revealed that the younger generations associate classic Campbell Soup varieties (and the cans they come in) with the older generations. This isn't necessarily a good thing. If you want to market your products to the people who are starting families and setting themselves up to be a major force in supermarket retail, you don't necessarily want them to think of grandma's house when they see your product.
This leaves Campbell Soup Co. in an awkward position. If they leave their soups the way they are then they run the risk of losing business to other companies whose soups appeal more to the younger generations. If they change them, they run the risk of alienating those who don't like change as well as those who don't mind soup reminding them of their grandmas. Campbell is actually playing it smart by introducing the pouched soups as a separate product line, since this will let them see how well the soup is accepted before making a major commitment to the pouch concept. Go Soup will launch in the summer, followed by a line of cooking sauces in pouches in the fall. The initial pouches for the product lines will be made by third-party companies, though if Go Soup proves popular the company will begin producing the pouches itself.
Campbell isn't the first company to switch to pouches, of course; they're not even the only company to make the move this year. H.J. Heinz Co. (NYSE: HNZ) is also set to begin selling 10-ounce pouches of ketchup for 99 cents, though those pouches will retain the general look of the classic Heinz label. That makes sense for Heinz, since its ketchup isn't fighting quite the same stigma as Campbell Soup cans are.
Personally, I think that the switch to pouches for Campbell Soup is a good idea. The pouches reduce manufacturing costs, increase shelf life and are potentially easier to store and transport than bulky cans. The only problem that I can see with it is that they seem to be trying awfully hard to make the Go Soup varieties seem trendy and hip. I was never a fan of the "Extreme!" movement that saw every package marketed toward younger people done up in eye-searing hues and "edgy" fonts; from the sound of it, Go Soup packaging is going to be just another variation on the same theme. I think that the soups would do better if Campbell used a modernized version of the classic label, with some tasteful graphics to set it apart as a product line. This would make the packaging appealing and modern without shoving down our throats how "fun" the new soup is.
People don't necessarily need their soup to be fun; they need it to be good. The line between innovative packaging that opens up new portions of the market and loud, faddish packaging that turns away the very people that it's aimed at can be a thin one, and it remains to be seen which side of that line Go Soup will be walking.
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