Canned Food Companies Reevaluate Strategies as Sales Stagnate

The canned food industry seems to have opened a can of worms. Long a staple of consumer diets, canned food has fallen out of favor with consumers, with more consumers valuing fresh, healthy food made without packaging. For example, several major canned food companies saw revenues decline in the first half of 2018. Furthermore, Campbell canned its CEO due to a precipitous drop in sales. So what happened? How did canned food get left off of consumers’ plates? And what are companies doing to respond?

Troubles Plague the Canned Food Industry

Three problems have put a dent in the canned food industry’s sales.

First, canned food suffers from a perception problem – consumers don’t believe that canned food is as good as fresh food. For example, a recent survey from Freedonia Focus Reports found that over half of consumers don’t think that canned meats are as nutritious as fresh meats. Consumers that don’t see canned food as being on par nutritionally with fresh food may not purchase canned food if fresh food is available at affordable prices.

Second, canned food often contains unappealing ingredients. Many canned food items are bland, as spices lose potency during the canning process and the subsequent shelf life of the food. Canned food also features much added salt or sugar, which may make food tastier, but can increase consumer concern about unhealthy added ingredients.

Third, the canned food industry is mature and thus relatively slower growing, which requires companies to compete more intensively for consumer dollars. Companies have to run more marketing campaigns and spend more on promotions – or risk consumers purchasing someone else’s product or not buying canned food at all.

Canned Food Companies Search for Solutions

Canned food companies continue to try to stay on the cutting edge, however, and they’re using a variety of strategies to fight back against negative consumer perceptions and competition from other food categories. Some companies have increased price to maintain company margins against stagnating demand. However, other strategies include:

• Re-designing product packaging – Several new options for canned food packaging have been made available through developments in the plastics sector. For example, McCall farms recently debuted a new variety of packaging for its Glory Farms brand, using the TruVue can. The can is made of transparent plastic, with a metal top and bottom so that it can be opened like a regular can. The can could help increase consumer trust of canned food.
• Premiumization – Companies are offering more expensive and higher quality goods. This strategy is often combined with a shift toward creation of healthier canned food. For example, Campbell debuted its Well Yes! brand of soup in 2016, which the company touts as offering “clean, simple, and nutritious ingredients”. The same year, General Mills’ launched Progresso Good Natured Soup, a line of vegan soups that features beans and vegetable purees.

Whether these solutions will return the canned food industry to speedier growth or merely kick the can down the road, however, remains to be seen.

Want to Learn More?

Don’t worry, we have you covered! For additional information and analysis of US industry trends, see Canned Foods: United States, a report published by the Freedonia Focus Reports division of The Freedonia Group.

This report forecasts to 2022 US canned food demand and shipments in nominal US dollars at the manufacturer level. Total demand and shipments are segmented by product in terms of:

• dressings and sauces
• fruits and vegetables
• dog and cat food
• meat, poultry, and seafood
• dairy products
• soups and stews
• other canned food such as canned baby food, beans, and peanut butter

For further insights into the US soups and stews industry, see Soups & Stews: United States. This report forecasts to 2022 US soups and stews demand and shipments in nominal US dollars at the manufacturer level. Total demand and shipments are segmented by product in terms of:

• canned soups and stews
• frozen soup
• dried soup mixes and broths
• canned seafood soup

To illustrate historical trends, total demand, total shipments, the various segments, and trade are provided in annual series from 2007 to 2017.

While you’re there, check out our related reports, which include:

• Aluminum: United States
• Condiments & Sauces: United States
• Dairy Products: United States
• Food Containers: United States
• Food Safety Products: United States
• Global Food Processing Machinery
• Meat & Poultry Products: United States
• Processed Food: United States

About the Author

Owen Stuart is a Market Research Analyst with Freedonia Focus Reports. He conducts research and writes a variety of Focus Reports, and his experience as an analyst covers multiple industries.