Tio Gazpacho: Drinkable soup is ‘not just a New York or LA phenomenon, it’s a country-wide phenomenon’
The global market for chilled soup is valued at nearly $790m and expected to reach $1.3bn by the end of 2025, fueled by the 'bowl-to-bottle' movement
that offers convenience to consumers and preference for high fiber, low-sugar soups, according to Persistence Market Research.
Due to these factors, the narrower bottled chilled soup market has become increasingly competitive with some front-runners starting to emerge.
“When it comes to the bottled chilled soup category, there’s really only two major players and that’s us and Zupa Noma,” founder Austin Allan told FoodNavigator-USA.
Bone broth brand Bonafide Provisions launched a line of ‘drinkable veggies’ last year in RTD bottled format but has recently discontinued the brand. And the other periphery player has a different positioning than Tio Gazpacho as a shelf-stable soup drink.
How consumers are approaching drinkable soup
“There is this appetite for products like ours because people are rejecting sugar, they’re rejecting filler ingredients, they’re rejecting artificial ingredients. This checks all the boxes for what people want,” Allan said.
In March, Tio Gazpacho gained a Whole30 certification – a strict 30-day elimination diet that’s heavy on vegetables – which according to Allan has helped consumers identify its products as a convenient way to squeeze in nutrition while on the go.
“What everybody is universally telling us is that they reach for it because it’s vegetables, and it’s vegetables on the go, and it’s a savory snacking product,” Allan said.
“Consumers are fitting it into their days either as a light lunch, a part of a meal, a snack, and all of the above.”
Even though consumers seem to be responding to the idea of a portable, drinkable soup, the company continues to work on the consumer education piece of its brand. Tio Gazpacho tweaked its on-pack messaging, swapping out ‘all natural’ with ‘ready to drink’ and is currently rolling out the new labels to stores.
“As much as I as the founder thought it was very obvious that if you put soup in the bottle, you drink it out of the bottle, it’s not obvious to everybody,” Allan continued.
“We’re really excited to see if those labels have any effect on sales with that new terminology on the bottle.”
20-25% of our sales are coming from Amazon
E-commerce has been pivotal to Tio Gazpacho’s success as the company continues to ramp up distribution across the US entering new retailers next month including Earth Fare in the Southeast, Mariano’s in the Chicago area, Snap Kitchen in Texas, Whole Foods in Northern California, independent retailers in Southern California, and Market of Choice in Oregon.
According to Allan, Tio Gazpacho shut down its own Shopify store and went full force into the online retail game, specifically Amazon Grocery.
“We had tried our own e-commerce business and it was mildly successful but the issue was, we weren’t really making a lot of money,” Allan said.
As a food startup, shipping and logistics costs are costly especially for a chilled product that promises a two-business-day shipping window.
“Amazon takes all of that way. Then all of the sudden, the shipping cost issues goes away and you’re able to reach any consumers in the United States. Where we stand right now, about 20-25% of our sales are coming from Amazon,” he added.
What’s on the horizon?
Tio Gazpacho has pushed its culinary differentiation through its collaboration with professional, award-winning chef José Andrés, who has finetuned the brand's four flavors and helped with sourcing of ingredients. While its flavor-first positioning will continue to be a focus, with a new flavor launch planned for Q1 2019, Allan added that the brand also wants to start promote its whole ingredients.
“The story we’re going to be telling is ‘drink your veggies on-the-go’, ‘made with whole foods, simple ingredients’… Because at the end of the day every American knows they need more vegetables,” Allan said.
