26 July 2023

Inflation Slows for Campbell's Tomato Soup

Campbell's Tomato Soup Can photo by Girl with red hat on Unsplash - https://unsplash.com/photos/C0MAGd-6aZM

The pace of price increases affecting Campbell's Condensed Tomato Soup have slowed!

That's a positive development as the price of the iconic Number 1 size can of Campbell's condensed tomato soup has mostly held steady since the end of 2022. If you're a sharp-eyed shopper, you might also have been able to find it being sold at a deeply discounted price of 99 cents, which until 2021, represented the most you would ever have to pay for a can of America's most famous tomato soup.

For most Americans today, the typical price they pay is at least 25% higher than that. Depending on where they shop for tomato soup, it can be even higher.

We checked in with our ten major national or regional grocers. Here's what we found when we sampled their prices for Campbell's condensed tomato soup in July 2023 and compared them to our sampling from January 2023. We'll warn you in advance there's one really big coincidence....

  • Walmart: $1.26/each, unchanged
  • Amazon: $1.26/each, decrease of $0.33 (-20.7%)
  • Kroger: $0.99/each, decrease of $0.01 (-0.1%)
  • Walgreens: $2.29/each, increase of $0.30 (+15.1%), unchanged or unchanged at $1.50/each when you buy two cans
  • Target: $1.39/each, unchanged
  • CVS: $1.89/each, temporarily reduced $0.40 (-17.5%), or unchanged at $1.50/each when you buy two cans
  • Albertsons: $1.69/each, increased $0.40 (+31.0%)
  • Food Lion: $1.25/each, unchanged
  • H-E-B: $1.31/each, increase of $0.02 (+1.6%)
  • Meijer: $1.29/each, unchanged

The one big coincidence involves catching Kroger having discounted its price for Campbell's Condensed Tomato Soup from its regular price in both January 2023 and July 2023. In between these months, Kroger shoppers would have paid $1.29 per can, the price it will go back to once this month's promotion has ended.

Those occasional sale prices are important however, because Kroger's family of grocery stores is one of the highest volume purveyors of Campbell's Tomato Soup. So much so we factor its promotions into our rolling twelve-month average of the price Americans pay for a 10.75-oz can of condensed tomato soup. Its periodic discounts have played a large role in holding the price of tomato soup relatively steady in a range between $1.22 and $1.24 in our accounting during 2023.

Campbell's Condensed Tomato Soup Unit Price per Can, January 1898 - July 2023 (Linear Scale)

For its part, Campbell Soup (NYSE: CPB) has not announced any new price increases since it announced its fourth wave of Biden-era price hikes in December 2022.

Here's how the company's CEO Mark Clouse described the business outlook for its soups at its 2023-Q3 earnings call on 7 June 2023.

Dollar consumption was essentially flat versus prior year, reflecting inflation-driven pricing mitigated by below historical norm elasticities and some increasing share pressure. As competitors improve supply, we are seeing some increased promotional activity. On a net sales basis, soup was down 11%, primarily reflecting the disproportionate impact of cycling the inventory recovery from a year ago, which accounts for the majority of this decline.

Strategically, we continue to believe strongly in our ability to grow the soup business and are pleased with the progress we've made in leading the renewed relevance of the category over the last four years. For example, the improved relevance of condensed soup, especially cooking, where we have supported the growth of in-home meals. Importantly, this has attracted new younger consumers to Campbell's.

In addition to cooking, our condensed eating icons, including Chicken Noodle and Tomato, are also up significantly from pre-COVID levels, providing a strong foundation for our business. However, some flankers like Healthy Request in our Kids' flavors, which have been key drivers of recent share softness, remain an area of opportunity.

Next is the complete restage and growth of Chunky Soup. This brand has been fundamentally transformed from a product purchase primarily on deep discount promotion to a great everyday value with a compelling position that focuses on protein and quick in-home lunches. This positioning has been particularly relevant with younger consumers, especially given the current economic climate and in contrast to higher-priced frozen food or away-from-home options.

The impressive four-year growth in dollar consumption up 31% and share of 2 points has been fueled by great marketing, effective inflation-driven pricing, and innovation like our Spicy line. We did experience a step-up in some competitive pressure in Q3, but we're already seeing the return to share growth, up 1 point in the latest four weeks.

Put a little more simply, Campbell Soup is positioning its soup products as a more affordable option compared other foods (not just soups). In doing so, the company is counting on American consumers to turn its products as they try to conserve money in the ongoing higher inflation environment.

As for the inflation they've seen, the four waves of price increases they've implemented combined with their efforts to operate more efficiently have helped "mostly offset" the increases they've experienced in their costs of doing business during the past two years.

For the latest in our coverage of Campbell's Tomato Soup prices, follow this link!

Previously on Political Calculations

Political Calculations' analysis of Campbell's Tomato Soup dates back to 2015! Along the way, we've filled in the gaps we had in the historic price data and have explored America's second-most popular soup from a lot of different angles.

Image credit: Campbell's Tomato Soup Can photo by Girl with red hat on Unsplash.

at