Morgan Stanley is out with a negative report on Campbell’s soup this morning.
Apparently demographic trends are not favourable to the company and the entire soup industry.
Soup Consuming Demographic is growing older
Soup consumer demographics currently somewhat mirror the US population (i.e., for both, ~40% of people are under 45 and 60% are over 45). However, since 2001, MRI data indicates that the volume share of soup usage across younger demographic groups (i.e., under 45) is declining faster than the population share of those groups.
Soup consumption by those under 25 is declining twice as fast as the under 25 demographic is declining relative to the total population. Between 2001 and 2010 the US population under the age of 25 declined as a percentage of the overall population by 60 bps while the percentage of soup consumers under the age of 24 (defined as anyone who consumed canned soup in the past 6 months) declined by 130 bps, or over double the decline relative to the overall population.
Photo: Morgan Stanley
Meanwhile, soup is not popular in the rapidly growing Hispanic population:
MRI data indicates that over the past 6 months, 64% of US households have consumed soup and 34% of US households are deemed “heavy users” (4+ cans over the last 30 days). However, only 47% of Hispanic households have consumed soup over the past 6 months, and just 24% of Hispanic households qualify as “heavy users”. Further, soup penetration in Hispanic households has declined from 50% in 2001 to 47% in 2010, while average US household soup penetration has actually increased from 63% to 64%. We believe this trend is particularly worrisome as the Hispanic population is an increasingly important population segment, having increased from 9.3% of the population in 2001 to 11.3% in 2010 and is forecasted to reach nearly 25% by 2050 (according to the US Census Bureau).