Campbell to enter world's two biggest soup markets
LOS ANGELES, July 9 (Reuters) Campbell Soup Co on Monday laid out plans to start selling its iconic soups in Russia and China, the world's largest soup consumption markets and two of the fastest-growing economies.
Campbell, which had pared back its international business in recent years to focus on boosting soup sales in North America, said soup servings in Russia and China far exceeded those of the United States.
In the United States, about 14 billion servings of soup are consumed each year, Campbell said, compared with about 32 billion in Russia and about 320 billion in China.
Nearly all of the soup consumed in Russia and China is homemade, and some analysts have said they are skeptical about how well premade soups from an American company will play.
But Campbell said today that it would go into Russia and China with products aimed at making homemade soup preparation easier.
''We recognized that in order to convert homemade behavior, we would have to offer products that enabled the preparer to use them as foundations for their favorite recipes,'' Larry McWilliams, president of Campbell's international business, said in a written statement.
The company's entrance into both markets comes as income levels are rising and consumers are looking for convenience, Chief Executive Douglas Conant said in the statement.
In Russia, the company plans to introduce beef, chicken and mushroom varieties of ''Campbell's Domashnaya Klassika,'' or Campbell's Home Classics. The broths will first go on sale in the Moscow region in October.
GOOD PROSPECTS Analysts say premade soup producers, including foreign ones, have good prospects in Russia.
''People used to prefer cooking at home and now, with many rushing doing business, people are actively switching to semi-finished products,'' said Vladislav Kochetkov from Finam investment company.
''There are Campbell Soup's products sold in Russia, but not very widely and the company does not promote its products here very actively,'' Kochetkov said. ''If it enters the market more actively and invests heavily in marketing and promoting its products, the prospects are not bad at all.'' In China, Campbell will introduce two Swanson-brand selections: a clear chicken broth and a classic broth known there as Gao Tang, with a combination of chicken, Hainan ham and pork.
Campbell has been selling Swanson broth for more than 20 years in Hong Kong, where it said it had more than a 90 per cent share of the broth market.
The broths will make their debut in early October in five cities in the Guandong Province: Guangzhou, Shenzen, Donguan, Zhongshanand Foshan.
Analysts in China said that with a growing middle class and domestic consumption on the rise, Chinese are eating more and more ''foreign'' foods, pointing to the popularity of Starbucks Corp, McDonald's Corp and other restaurant chains on the mainland.
In recent years, Campbell has had some success in the United States with new products like lower-sodium soups. The company has also improved its presence on store shelves with a new ''gravity-feed'' system that makes it easier to stock shelves and that highlights the soups.
But like most food companies, Campbell has also had to adjust to rising prices for ingredients and energy, as well as competition from General Mills Inc's Progresso soup, as well as store brands.
Last year, the Camden, New Jersey company sold its businesses in the United Kingdom and Ireland and used some of the proceeds to buy back stock.
Shares of Campbell were up 29 cents, or 0.8 per cent, at 38.34 dollars in mid-day New York Stock Exchange trade. The company plans to discuss its plans at a meeting with investors at its headquarters today afternoon.