The U.S. Canned Soup Market: A Competitive Profile

Y. Datta


This paper follows the path of eight studies of U.S. markets: Men’s Shaving Cream, Beer, Shampoo, Shredded/Grated Cheese, Refrigerated Orange Juice, Men’s Razor-Blades, Women’s Razor-Blades, and Toothpaste.

Porter associates high market share with cost leadership strategy which is based on the idea of competing on a price that is lower than that of the competition. However, customer-perceived quality—not low cost—should be the underpinning of competitive strategy, because it is far more vital to long-term competitive position and profitability than any other factor. So, a superior alternative is to offer better quality vs. the competition.

In most consumer markets a business seeking market share leadership should try to serve the middle class by competing in the mid-price segment; and offering quality better than that of the competition: at a price somewhat higher, to signify an image of quality, and to ensure that the strategy is both profitable and sustainable in the long run.

Quality, however, is a complex concept that consumers generally find hard to understand. So, they often use relative price, and a brand’s reputation, as a symbol of quality.

In 2008 the U.S. retail sales for the Canned Soup market were $3.44 Billion. The market leader Campbell had a commanding share of 52.5%, followed by a far-distant second Progresso with a share of 17.8%. A notable feature of this market was the tremendous variety of soups, albeit many with minor variations, that equaled the unbelievable figure of 1011!

We focused our attention on the two best-selling varieties of soup: (1) Chicken Broth canned, the market leader, with 11.1% market share, and (2) Chicken Noodle Soup canned, with a 7.4% share. Within each variety we chose the can-size range with the highest sales.

Using Hierarchical Cluster Analysis, we tested Hypotheses I that a market leader is likely to compete in the mid-price segment. Employing U.S. retail sales data for 2008 and 2007, we found that for both Chicken Broth and Chicken Noodle Soup—for 2008 and 2007—the market leader Campbell was a member of the mid-price segment.

For Hypothesis II we wanted to test the proposition that the unit price of the market leader would be somewhat higher than that of the nearest competition. For Chicken Broth we could not test this hypothesis because Progresso, the runner-up, could not be included in this analysis.

However, for Chicken Noodle Soup the results did not support the hypothesis because Progresso happened not to be a part of the mid-price, but that of the premium segment.

Finally, we discovered four strategic groups in the industry.

Full Text:




  • There are currently no refbacks.

Copyright (c) 2020 Y. Datta

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.

Copyright © SCHOLINK INC.   ISSN 2377-1038 (Print)    ISSN 2377-1046 (Online)