VANCOUVER — Manufacturing natural, healthy soups for mass retail is easier said than done.
For one thing, peeling vegetables and making stock from scratch takes time, physical space and labour. That means a facility not only needs volume sales to offset the cost, it must be physically configured for all that chopping. Using concentrated powdered soup bases and precut vegetables is the conventional approach and much easier to handle.
“There’s less competition than you might think,” said Richard Breakell, sales and marketing director of Richmond’s Global Gourmet Foods, which launched Smart Soup, its healthy soup brand, in the U.S. in 2013 and plans to launch in Canada this fall. Whole Foods, Kroger and Costco in the U.S. are among its larger customers.
Small companies tend to lack both capital and distribution, Breakell said, while large companies reporting to corporate boards lack the will to wait for a return.
“When we decided to launch the brand, we easily had $1.5 million invested before a single box was produced,” Breakell said.
Global Gourmet is a 27-year-old family-owned food service business started by Anne Chong-Hill and her husband Lawrence Hill. The 140-employee company has a 75,000-square-foot facility and extensive distribution across Canada, the U.S. and Japan selling soups, chilis, sauces and entrées to multi-unit restaurants, supermarket delis and institutions such as hospitals. It also produces private label product for customers such as supermarket chains.
Chong-Hill built the business on gumption and luck.
Take the time she walked into the Bank of Nova Scotia back in 1976.
“I need a job,” the then young mother told the bank manager. Her previous work experience was mostly in a secretarial pool.
“‘You don’t have a loans officer. You should be concentrating on your job and hire somebody like me to expand your loan profile …’ He was laughing at me. ‘I can come in part time,’” she persisted.
She got the job.
It surprised no one when Chong-Hill started her own food service business three years later — with a Bank of Nova Scotia line of credit. It was 1979 and the recession was just beginning. The first month in business, Hill’s Cornish pasties, sausage rolls and curry puffs brought in $200.
That’s when she showed up at BC Ferries with a box of curry puffs. Luckily for her, the head of catering in Horseshoe Bay was a former British Army chef and he knew his curries.
“That’s how I started with four ferries,” she said.
The experience taught her to be frugal. The contract went out to tender every six months so before long, she was competing against big players. She had to deliver to Departure Bay and Swartz Bay, so she’d get up at five a.m., fill up her car with curry puffs and ride the ferry over.
“I was delivering for two years by myself,” she said. “Twice a week to Horseshoe Bay and twice a week to Tsawwassen. You know what? It was fun. I had all the truckers honking at me and they’d come sit with me and have a coffee early in the morning.”
A few years ago, when Chong-Hill was diagnosed with hypertension, she discovered a shortage of healthy, natural soups on the market — “Products may be low fat, but full of sugar, for instance,” Breakell said — and decided to manufacture a line of all-natural, cholesterol- and gluten-free soups with reduced sodium.
With strong U.S. distribution networks already in place, the company launched its frozen retail product down south and is now working on adding a single-serve product for refrigerated deli sections.
Consumers are increasingly seeking heart-healthy, minimally processed foods with recognizable and short ingredient lists. While canned and jarred soups make up the majority of the total U.S. retail soup market, frozen and chilled soups are growing fast. Chilled soups are usually located in a supermarket’s “deli fresh” area and that’s the fastest-growing grocery segment, according to Breakell’s research.
Manufacturing, storage and distribution costs for canned soups is much lower than for frozen or refrigerated, but “the reality is the fresh side of the business is growing and canning is declining,” said Breakell, Chong-Hill’s son.
Canning requires a high-pressure, high-temperature process that is “really hard on the food and the nutrients,” Breakell said. “It’s really hard to execute great textures and there’s a lot of salt and sugars involved to get any flavours out of it.”
“Our manufacturing process is very different from most facilities capable of manufacturing at scale,” Breakell said. “We are really, truly boiling vegetables to make a stock.”
“We’re trying to do our best to get scale and systems and that’s how we bring the cost down,” Breakell said. “We know we’ve got to keep it under a 30-per-cent premium.”
Smart Soup single-serve, 10-ounce portions (with flavours such as Thai Coconut Curry and Indian Bean Masala) will retail for $2.99 in the U.S. and a similar price in Canada.
Smart Soup’s accounts include Japan’s Ito-Yokado chain. Local clients include BC Children’s Hospital, Royal Columbian Hospital and the Good Soup Truck, a mobile outreach soup kitchen.