SIC 2032
CANNED SPECIALTIES

This category covers establishments primarily engaged in canning specialty products, such as baby foods, nationality specialty foods, and soups, except seafood.

NAICS Code(s)

311422 (Specialty Canning)

311999 (All Other Miscellaneous Food Manufacturing)

Industry Snapshot

Canned foods suffered a decline at the beginning of the 1990s as consumers turned to fresh and frozen products in a search of healthier foods. However, thanks to new nutritional labeling and canned products that featured lower salt and lighter syrups, that trend showed signs of reversing by the latter part of the decade. Soup led the category in sales, with condensed soup as the best-selling canned food item on the shelf. Ethnic foods were the fastest growing aspect of the industry. By 2002, all sectors of the canned food industry were reporting growth.

Background and Development

Cans have unquestioned advantages as food containers. Hermetically sealed, they protect their contents from contamination as well as prevent undesirable fluctuations in moisture content; the absorption of oxygen, gases, and undesirable odors; and exposure to light. In addition, they allow for high-speed filling, sealing, and casing, and retailers can display them easily and attractively.

Compared to other methods of food preservation, canning is a recent development. Freezing goes back to the ice ages, and even smoking and drying were used before recorded history. Canning did not come along until the first quarter of the nineteenth century.

Nicholas Appert, a French confectioner and chef, theorized in 1795 that if food is heated in a container with no air in it, the food will keep. He worked on his theorem for 14 years, cooking foods in cork-stoppered bottles in boiling water. Sent around the world on sailing ships, Appert's preserved fruits and vegetables remained wholesome. Eventually an English merchant, Peter Durand, would develop the use of tin canisters in 1810.

The first U.S. patent for tin containers was granted in 1825. At first, cans were made by hand; even an expert in the process could turn out only five or six an hour. The term canning came to mean sterilizing food by heat and sealing it in airtight containers, either metal or glass, at an individual's home or in a processing plant.

The Civil War accelerated the need for canned foods and, by the war's end, production of canned foods had increased six times—and Americans had learned to trust them. The importance of canned foods to the military was underscored again during World War II, when two-thirds of the food supplies for the U.S. and Allied forces came in cans. When the Japanese capture of Malaya cut off important sources of tin, conservation of the metal in the United States became critical. At the same time, glass containers, which had always been used for some foods, were used to replace tin cans.

Technological advances in the canning industry accelerated after the Civil War. The invention of the retort, or pressure cooker, in 1874 made it possible to control cooking temperatures for the sealed cans. The invention of the so-called sanitary can in 1900 was a cylindrical can that had an open top, enabling canners to deposit larger food pieces without the damage that occurred when filling the old hole-and-cap can. The lid for the new can could be attached mechanically, without the solder seal coming into contact with the food.

Near the end of the twentieth century, when consumers were concerned about lead in food, tin replaced lead in soldering. Other packaging developments included the flexible pouch for low-acid foods and cans made of aluminum and of steel.

Canned Soups. Sales of canned soup totaled $2.6 billion in 1995, with condensed versions accounting for more than $1.8 billion. Sales of single-serving cans were just over $800 million. The canned soup market was huge, with sales coming from commercial outlets, such as restaurants, cafeterias, fast-food chains, and non-commercial institutions, such as schools, hospitals, and the military.

"Healthy" was the hot word in canned soups in the 1990s. Campbell Soup Company, long the industry leader, started the decade by launching 11 new soups under its Healthy Request label.

ConAgra, Inc. entered the arena with its Healthy Choice line of soups. Even with no experience in soups, ConAgra, the second-largest food company in the country, was optimistic about its low-sodium, low-fat, low-cholesterol product.

Pet, Inc., maker of Progresso soups, lowered salt in its Sodium Watch Soups, while Pritikin Systems, a division of Quaker Oats, put out a line of Healthy Soups. Pet's Progresso brand continued to capitalize on eating trends in the 1990s with six new ready-to-serve canned soups, containing pasta combined with a flavorful broth and plenty of vegetables.

In the latter part of the 1990s, Campbell's introduced ready-to-serve soup in glass jars and embarked on a $15-million advertising campaign to promote the new line. Soups with an emphasis on fresh appearance and flavor, as well as healthier formulations (low-sodium, low-fat, no-MSG) were put on the market; they were more appealing than ever. Vegetable broths also increased in popularity as a result of consumers' focus on healthy eating.

Baby Foods. By 1995 baby food sales in the United States reached $1 billion. The major manufacturers spent much of the 1990s cutting prices to win back customers who had switched over to value-price store brands. Additional customers were lost when the Center for Science in the Public Interest admonished several top brands for having excessive water and fillers in their baby foods.

In response to the criticism, Gerber Products Company, the leader in the category, introduced new versions of its core foods without added starch or sugar. The company also produced a line of Tropical Baby Foods targeting the Hispanic market. Beech-Nut, a division of St. Louis, Missouri-based Ralston-Purina, introduced its chemical and pesticide-free Special Harvest line of fruits, vegetables, cereals, dinners, and juices from organic sources in 1991, but poor sales caused the company to abandon the line two years later.

Several independent companies marketing organic baby foods appeared in the 1990s—notably Earth's Best and Growing Healthy, Inc. In spite of the popularity of so-called health foods among the general public, the market for infant health foods was slow to catch on. One reason was fierce brand loyalty among consumers for Gerber and Heinz. That outlook could change, however. In March 1996, H.J. Heinz Company acquired Earth's Best, and Gerber introduced four new vegetarian products with pasta and increased protein.

Ethnic Foods. The market for ethnic foods grew an average of 9.4 percent annually in the 1990s. As discounted and private label products, as well as new products geared toward niche markets, crowded supermarket shelves in the 1990s, many famous old brands began to disappear. La Choy and Chun King were typical of threatened brands, with competition coming from the increasing availability of fresh Chinese food.

Mexican specialties and southern soul food were the top sellers in the 1990s. Their growth spurred the growth of minority-owned businesses such as Goya Foods, Glory Foods, and Garcia Canning Co.

Canned pasta faced tough competition from the dried and fresh pasta industries. The Chef Boyardee brand of canned spaghetti was the industry leader with a 59 percent share of the market by mid-decade. Acquired by International Home Foods in 1996 from long-time parent American Home Food Products, Chef Boyardee launched its ABCs and 123s pasta shapes with an aggressive media campaign. Campbell Soup's Franco-American brand was second with a 36 percent share. In the late 1990s, Franco-American promoted its Superiore variety in an effort to attract more adult consumers.

Current Conditions

According to the most recent figures available from the U.S. Census Bureau, the industry's roughly 140 establishments employ more than 19,000 people. The value of shipments exceeds $8 billion annually, and canned soups and stews account for nearly half of that total, followed by canned baby foods and canned ethnic foods.

Canned soup sales grew 7 percent to $3.28 billion in 2001. One sector experiencing particularly rapid growth in the early 2000s was ready-to-serve soup, particularly private label brands. Sales of private label ready-to-serve soup jumped 62.3 percent in 2001.

Some analysts credited the September 11 terrorist attacks for boosting canned food sales as consumers became concerned with maintaining food reserves at home. According to Private Label Buyer, "Five weeks after the attacks on the World Trade Center and the Pentagon, canned food producers noticed clear jumps in their sales."

The canned food industry received a public relations boost in August of 2003 when a blackout in the Northeastern United States and Canada left residents without power for several days. Food spoilage losses were estimated

to range from $350 million to $1 billion, according to the Anderson Economic Group.

Increasingly, U.S. canned food manufacturers were looking to international markets for growth. For example, China was considered an emerging canned food market in the early 2000s. Canned food consumption there was expected to double between 2001 and 2005.

Industry Leaders

Campbell Soup Company. The undisputed leader of the industry in the 2000s and indeed throughout its long history, Campbell Soup Company was selling 5 billion cans of soup a year, or close to half of all soup sales in the market. Founded in 1869 by Joseph Campbell, a fruit merchant, and Abram Anderson, an ice box manufacturer, the company reported sales of $6.6 billion for 2003 (nearly two-thirds from soup sales).

Perhaps no event in the Campbell Soup Company's long history was more momentous than the arrival in 1897 of a 24 year-old chemist, Dr. John T. Dorrance, who signed on at a salary of $7.50. When he died 33 years later, he was sole owner of the Campbell Soup Company and amassed a personal fortune of $115 million, an amount equal to $850 million in the 1990s. Dorrance's descendants own about 50 percent of the company.

Young Dorrance was a man with an idea: condensed soup. When he joined Campbell Soup Company, soup was sold in 32-ounce cans for about 30 cents. Since soup was made mostly of water, Dorrance reasoned, the removal of water would save on shipping, cans, and weight. Dorrance introduced condensed soups in ten and a half ounce cans selling for 10 cents. To win over consumers who tended not to trust the quality of such a low-cost product, he spent heavily on advertising and promotion. In 1990 Campbell produced its 20-billionth can of condensed tomato soup.

Campbell Soup Company's marketing high points include the 1904 introduction of the enduring image of the Campbell kids, created by Philadelphia artist Grace Gebbie Drayton. In the 1930s, the slogan "M'm! M'm! Good!" entered the nation's consciousness when Campbell sponsored the "Amos 'n' Andy" and the George Burns and Gracie Allen radio shows.

One more momentous event may be on the horizon. In March 2000 the company's president departed, which raised the odds for a merger. Wall Street analysts even saw a hostile takeover in the company's future.

Gerber Products Company. A symbol of quality and trust, the Gerber baby was adopted as an official trademark in 1931, three years after Fremont Canning Company of Fremont, Michigan, began pureeing foods for babies. Commercial artist Dorothy Hope Smith created the unfinished charcoal sketch of a neighbor's child, who was the first Gerber baby. Gerber has a selection of more than 190 foods. In 2003, it began switching its primary packaging material from glass to plastic in the interest of cutting costs.

Further Reading

"Businesses and Consumers Lose Up to $1 Billion in Spoilage or Waste During August Blackout." Business Wire, 5 September 2003.

"Canned Goods." Grocer, 14 December 2002.

"Canned Soups, Veggies Finding New Life." Private Label Buyer, 2002. Available from http://www.privatelabelbuyer.com/catreview0111d.asp .

U.S. Census Bureau. "Manufacturing-Industry Series." 1997 Economic Census. Washington, D.C.: GPO, 24 January 2000.