Wednesday, Jul. 22, 2009

Soup: A Recession Staple No More

How can that be? After all, soup is good food and, at first blush anyway, it's plenty cheap. That's why soup makers like Campbell's are regarded on Wall Street as recession darlings. The theory is that as folks stop eating out and start to look for cheaper grub they'll gravitate to canned soups. Yet it's not happening this time around. Sales of ready-to-serve soups at Campbell's, which dominates the soup market, plunged by 7% in the most recent quarter. Broth sales fell 2%. Campbell's shares, which are widely held to be recession resistant, are down 25% the past nine months. One problem, according to an analyst report at Credit Suisse, is that "soup is not so cheap when you add the sandwich," which you'll need to actually get full. There have also been some recent price increases, and the more filling "chunky" soups are high in calories and sodium — a no-no for those watching their intake.