Home baking continues to grow, and innovation is helping - up to a point. But could the category be doing more, and if so what? Jules Leyland reports.
Home baking is hot. In the past five years, the market has almost doubled in size from £376m to £645m, due to a measure of austerity, a handful of celebrities and a sprinkling of new opportunities - plus a big dollop of inflation.
And it’s shown no sign of slowing, up 18.2% in value in the past year. Now 41% of Brits bake at least once a fortnight, and the average consumer eats home-baked goods 4.6 times every two weeks. “Home baking is one of the few categories that has continued to grow during the recession,” says Moji Forde, Sainsbury’s home baking category planner.
So why has the nation gone baking mad? What are the dynamics driving the market? How are retailers and suppliers responding? Which areas are benefiting most? And are there any further opportunities?
Without question, the explosion in media about bakery has helped the market. New TV programmes focused on baking have created celebrity TV bakers, and there are myriad magazines, websites and blogs devoted to the topic - not to mention a new exhibition, The Cake & Bake Show, scheduled for September in Earls Court. The tricks of the trade are all accessible, encouraging the uninitiated to try their hands at baking and the experienced to become more adventurous than ever.
“People became more adventurous with their baking, trying out spelt and rye flour” Claire Marriage, Doves Farm
In an age of austerity, home baking is a cheap thrill. It competes as much with a trip to Legoland as it does with Mr Kipling or Hovis or McVitie’s. Indeed, insofar as it’s much more focused on entertainment than the practical need for sustenance, you could even say home baking is the new rock and roll.
That means it is no longer just the domain of families and the over-65s. A Dr Oetker U&A study, updated in 2012, shows that the fastest growing group is ‘nervous bakers’ - young and inexperienced, but keen. Indeed, Tesco chilled pastry and homebaking buyer Alexandra Tomalin notes that the number of 18 to 35-year-olds buying cake decorations grew by 35% in the past year, “showing that baking is appealing to a younger audience”. And looking specifically at cake decorations, the majority of households buying into the sector (61%) are those without children [Kantar Worldpanel 52 w/e 15 April 2012]. “They are buying them for the office bake-off or the ‘bake and booze’ night in with their partners,” says Edd Kimber (aka The Boy Who Bakes), winner of the BBC’s first Great British Bake Off.
Nonetheless, Forde cautions against ignoring the core market of seasoned home bakers. “Innovation has not been a significant driver of growth, but it is a dynamic category where it is important to meet the demands of increasingly adventurous bakers for a more diverse product range,” she says. “Innovation is relevant to core shoppers - hence the success of coloured icing, to meet the need to create stunning jubilee cakes.”
“The sugar market has seen sharp cost increases caused by a shortage in production” Jon Tanner, Napier Brown
The Royal Wedding, the Diamond Jubilee and now the Olympics have been giving consumers new excuses to showcase existing skills or take their first faltering steps into baking. And, as Forde says, the Jubilee has inspired a lot of extra business in ‘finishings’, up 89% by value and 49% by volume since 2008, with 2% value growth and 9% volume growth in the past year [Kantar]. Of all the home baking sub-categories, only cake mixes has grown at a faster lick in the past year (see left).
But it’s not all good news. While people are visiting the category more often and spending more per trip, the number of baking occasions has actually fallen by 4% in the past year (with men aged between 35 and 44 the only group in growth). This suggests some growth, at least, is being driven by bigger - or more expensive - home-baked goods.
Value growth has also been flattered, to an extent, by price inflation. Some of this, and the 4.6% volume uplift in the past year, has resulted from premiumisation. But the return of commodity-based inflation is having a material impact not only on prices, but on shopper behaviour.
Fruit & nuts
This is most evident in fruit and nuts, where price inflation was wholly responsible for its 14.4% value growth. Indeed, it’s the only category to show a decline in volume, down 2% on 2011. Over the five-year period, value sales have increased by 63%, but fruit and nut volumes have grown a paltry 4%.
“Home baking is one of the few categories that has continued to grow during the recession” Moji Forde, Sainsbury’s
That makes the performance of category leader Whitworths all the more impressive. In a market in which own label accounts for 56% of volume, it doubled its share from 6.7% to 12%, with value up 99.1%, and 75.7% growth in volume. As well as increased frequency of purchase, Whitworths put its success down to a continuing focus on taste. “I defy anyone to find a better-tasting juicy raisin than our Juicy Raisins,” says Clinton Orchard, Whitworths’ marketing director.
With 17 new lines, including pre-soaked and cut fruits, and flaked, roasted and ground nuts, Whitworths’ new essentials range also taps into another key trend in home baking: convenience. “The time it takes to chop and roast is often not included in recipes,” says Orchard, “so this range is designed to make baking easier.”
Flour, with values up 11% year-on-year versus 3.2% volume growth, has also suffered from inflation. “The increase in the value of the flour sector is a combination of increased commodity costs and less deep promotions” says Edward Otero, marketing manager for home baking at Kerry Foods.
Own label dominates the category, but once again, the strongest growth has come from brands. Homepride, the fastest growing, has boosted value sales by 18%. Allinson, meanwhile, grew value and volume sales by 17% and 21% respectively, it says, by targeting bakers with a health and craft focus.
“People want more than frivolity or nostalgia, and are looking for something serious” Clare Simpson, Dragon Rouge
According to its CEO Claire Marriage, Doves Farm has also seen big growth in its specialist flours as “people become more adventurous with their baking, trying out spelt and rye flour for their breads”. Doves Farm has also experienced a big uplift in gluten-free flour. And last year it introduced einkorn flour, using one of the earliest cultivated forms of wheat. Thought to have been born in the ‘Cradle of Civilisation’ around the eastern Mediterranean, and old enough to have been in decline by the time the Bronze Age rolled around, it makes spelt look young.
The hottest ingredient in flour, however, is the chia seed, widely hailed as a superfood. The seed contains more omega-3 fatty acids than salmon, antioxidants and minerals, and is a complete source of protein. The first flour to employ chia is Amy Ruth’s gluten-free baking mix, which contains 70% wholegrains, including chia seeds, quinoa, teff, brown rice and flax.
The sub-category with the highest rate of inflation has been baking sugar. “The sugar market has seen sharp cost increases caused by a shortage in EU sugar production in 2010/2011,” says Jon Tanner, sales director at sugar distributor Napier Brown, “and it’s expected to remain high.”
Happily, rising prices don’t appear to have had a negative impact on volume sales, which are up 6.9% year-on-year and 39.5% over the past five years. That’s partly thanks to growth in the use of specialist sugars such as caster and icing sugar, which now account for 16% of the total sugar category compared to 13.3% in 2010 - growth of 26.4% [Kantar].
“Promotions are not particularly effective at driving category growth in home baking” Moji Forde, Sainsbury’s
With health another important trend, the change in the EU laws last November to permit the use of stevia, a natural artificial sweetener, has seen the launch of two brands - Truvia and Purevia - both of which are targeting the home baker.
But it’s in cake mixes that the most significant and prolific innovation has been seen. It’s the only sector to show real growth, with volume up 34.1% in the past year and almost 76% since 2008. Value growth of 27.9% year-on-year and 65.3% over five years suggests strong promotions have been a big factor in its success. We can only assume this is in own label (up 15.7% in the last year versus 21% growth for brands), because the innovation in the market has been geared towards greater convenience at a higher price premium.
Last September, Betty Crocker launched seven cake mix lines based on new trends such as whoopie pies and layer cake as well as old favourites. Within four months, the range added £1m in retail sales and helped increase penetration of the brand to a new 16% high [SymphonyIRI/TNS 52 w/e 21 January 2012].
The latest range, out this month, is Half Baked Cakes from Helen Colley, the former pudding entrepreneur. With an rsp of £5, the range is clearly at the top end of the market - but consumers splashing out are rewarded with an easy-to-bake ‘homemade’ kit, in the form of fresh ready-to-bake wet chilled cake mixes, handily packaged with a cake mould and toppings.
“We expect to attract consumers who want to bake a cake, but don’t feel confident enough to bake one themselves,” explains Andy Hitchen, one of the co-founders of Half Baked Cakes.
Other examples of recent convenience-focused NPD include Dr Oetker’s sachets of baking powder and bicarbonate of soda, which “offer an entry price point for new or ‘nervous’ bakers, while driving category value and frequency,” according to Gill Davies, Dr Oetker UK marketing director.
And Jus-Rol’s new bake-it-fresh dough products allow consumers to pull off more tricky baking feats, such as croissants, while its newish pastry sheets even do away with the ever-so-irksome need to roll out pastry.
dairy brand Kerrygold, meanwhile, has introduced two new products with bakers in mind - ‘Block butter now softer’, which aims to meet the needs of the 83% of consumers who find block butter too hard [Omnibus survey 2012], and Kerrygold Lighter block butter, with 25% less fat.
With all this innovation (and more), perhaps the biggest surprise is that the size of the home baking aisle has remained more or less unchanged. Indeed, some believe the market could become bigger and more valuable still, especially if retailers and suppliers change the way they think about home baking.
supermarkets are repeatedly accused of being overly reliant on promotions, not always fairly - but in this instance there may be some justification. While, as Renshaw head of marketing Ruth Stead explains, “trial offers are important as the number of new products increase”, there seems to be agreement that deals don’t grow the category.
“Due to the long shelf life of home baking products, promotions are not particularly effective at driving category growth,” says Forde. “They tend to lead to cupboard-filling rather than increased consumption.” And Forde argues that “availability is more important than price, as shoppers look for specific products to make a recipe.”
“We find that relative to shop-bought cakes, home baking represents excellent value” Tony Lucas, The Silver Spoon Company
Suppliers like Tony Lucas, marketing and development director at The Silver Spoon Company, agree. “Generally we find the home baking market not to be price-sensitive. Relative to shop-bought cakes, home baking represents excellent value.”
Stead also argues that there are a number of products that are almost impossible to replicate at home. “Sugar decorations and ready to roll icing, for example, are the home baking equivalent of puff pastry, and this gives the sector a certain price elasticity.”
On the other hand, it’s simply not true that price is inelastic. Where retailers and manufacturers may be able to achieve better results, however, is through improving their promotions and merchandising.
In recent years, some supermarkets have worked hard on multi-ingredient promotions. The Waitrose Delia and Heston recipe cards were successful, but the Waitrose Delia Christmas cake in a bag, introduced in 2010, raised the bar. Helped by heavy promotion, Waitrose sold an estimated 1.5 million kits.
The latest trend is to place the kits in - wait for it - the chilled aisle. Tesco, for example, launched a Tesco ‘Easy to Bake’ range in February, which features chilled mixes such as Victoria and chocolate sponges, bread, cookies, muffins and cupcakes.
The launch this month of Half Baked Cakes, including additional accessories and tools as well as raw ingredients, has evolved the category still further - but research from General Mills suggests an even more radical re-examination of the fixture may be necessary. The research discovered only experts found it easy to seek out all of the ingredients for a recipe, and that consumers are “excited by recipes until they come to find the ingredients in store”, says Maria Manly, General Mills head of category.
“They may have to buy up to 10 products and visit three locations in store to complete a recipe. It’s easier online but can still take up to half an hour,” she adds. “If retailers could make the connection between the three temperature states - ambient, chilled and frozen - this market could be worth up to three times its current value.”
Despite the current rate of NPD, the other key area of opportunity is, say experts, innovation. Faddish as taste trends are, “every trend has a counter-trend,” says Clare Simpson at consultancy Dragon Rouge, “and after the Jubilee, should we be surprised if we are all cupcaked out?”
“To increase frequency and penetration, home baking needs to grab the zeitgeist and give us more sustaining, substantial and rewarding experiences,” says Simpson, “and become a more healthy indulgence.” This means more supergrains, natural sweeteners, fruits, smaller portions and added veg.
The trend in vegetable cakes was first noted by BBC Good Food more than three years ago, and it’s continued to pick up pace. Yet this seems to have passed the home baking fixture by, with only the ubiquitous carrot cake getting shelf space. There’s surely room to add courgette, parsnip, aubergine and avocado, whether in the form of dried products to add to recipes, or cake kits.
Simpson also predicts a bolder, slicker aesthetic sweeping the cake aisle. “With increasing recognition that the economic downturn is here to stay, people want more than just frivolity or nostalgia, and are looking for something more serious to see them through.”
That means less fussy products, and possibly more products that have male appeal such as scones, tray bakes and bread. Even the children’s market is an opportunity, she adds. “Home baking kits need to become more involving by pre-measuring and preparing each ingredient,” she argues.
According to Dr Oetker’s research, home baking with children is increasingly a form of play. A huge sector of the market is already targeting them - think colourful licensed cake mixes - but “to get kids really engaged with baking, the products aimed at them need to be the home bake equivalent of Play-Doh or painting, and if they end up inedible it doesn’t matter,” adds Manly at General Mills.
Finally, there’s savoury - an opportunity rarely considered by this industry. Savoury baking is perceived to go hand-in-hand with heavy fat and carb content, but the increased availability and popularity of lower-carb flours and reduced-fat white and yellow fats is helping make the sector healthier than ever. The advent of chilled home baking fixtures also lends itself to savoury baking.
And, of course, the final frontier. With men upping consumption of bakery, and increasingly engaged in baking - especially bread - is it just a matter of time before we see the first home baking range exclusively for men?
Home baking: Selling like hot cakes
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Selling like hot cakes: the continued rise of home baking