UK biscuit brands feel full force of economic crunch

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Sales of 14 of the UK’s top 20 biscuit brands - including Hobnobs, Jaffa Cakes and Kit Kat - have dipped as shoppers trade down to own label and retailers pull back on multibuys.

The decline among leading brands has coincided with a marked increase in volume sales of own label biscuits, up 4.3% [SymphonyIRI, 52 w/e 4 August 2012], as shoppers traded down, due to a combination of value and strong own-label NPD programmes. Own label now makes up 28.1% of the market by volume.

“Shoppers trade down in difficult economic times, and typically own label benefits,” said Fox’s Biscuits brands sector director Rachel Moffatt. “Some retailers have also relaunched their entry-level own label ranges across all categories.”

Some suggest a shift away from multibuys has also been to blame. The top five supermarkets cut featured space bogof promotions by 41% year-on-year as they shifted towards save mechanics [Assosia].

Others cite health as a factor, particularly in relation to declining sales of children’s biscuits and chocolate biscuit bars.

“Consumer tastes are leaning towards healthier snacking options,” said Kellogg’s UK head of speciality Sanjeev Khanna. “Shoppers are looking for alternatives to items such as chocolate biscuits, which have led the way in the past.”

United Biscuits, which owns the McVitie’s, Go Ahead! and Jacob’s brands, has been badly affected, with seven of its 14 brands in decline. “Some of our everyday brands have shown some short-term decline, but we have a strong Q4 plan and our 2013 plans are bigger and better than ever,” said UB UK director of market strategy & planning Mark Sugden.

Although the overall market is in value growth [Kantar Worldpanel], this is largely inflationary. Only two parts of the market - healthier and savoury - are in substantial volume growth on the branded side. Four of the five brands increasing volumes year-on-year fell into the savoury or healthier categories.

“Brands that bucked the trend have offered a genuine point of difference and continued to engage shoppers via investment in innovation and above and below-the-line support,” said Burton’s Biscuit Co category and activation director David Costello.

The best performance came from ‘breakfast’ biscuit Belvita. Sales rose 84.5% by value and 66% by volume.

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