Held back in recent years by healthy eating, the cake sector has bounced back in 2007 to record a sales increase of 3.6% to slightly more than £1bn [TNS] thanks in no small part to the exceedingly good performance of Mr Kipling.

Previously in decline, sales of the brand, now owned by Premier Foods after its takeover of RHM, are up 10% with small cakes, such as Viennese Whirls, Lemon Slices and Angel Slices, driving growth. The UK's largest cake brand, Cadbury Mini Rolls - also made by Premier - performed equally well with sales up 10% to nearly £40m [Nielsen].

The turnaround in Mr Kipling's fortunes is due to recipe reformulations that cut out all artificial colours and flavours as well as a packaging redesign at the end of last year, according to Jill Caseberry, Premier's cake business unit director .

As the success of Cadbury Mini Rolls proves, confectionery brands continue to make an important contribution. At Memory Lane Cakes, part of Finsbury Food Group, which makes cakes under licence from Nestlé, head of consumer marketing Martin Wiltshire says there is still a lot of mileage in the cake-confectionery crossover. "Nestlé, Cadbury and Mars have confectionery brands that haven't been exploited in the cakes category and kids is one area where we see real potential. It's a sensitive market, but parents still want to treat their kids."

Cakes are also seen as an individual treat with strong growth in packs of single-unit products such as slices, and cake bars. According to research from cake supplier Dawn Foods, in-store bakeries are benefiting from this trend with sales of doughnuts up 6.8% and muffins up 8.4% in the past year.

At cake supplier Rich UK, sales and marketing director Simon Richardson says the ISB category is also benefiting from demand for premium 'natural' cakes. "Packaged cake manufacturers claim they are using all-natural ingredients, but to get a shelf life of 10-12 weeks they need to be adding something. Our cakes have a shelf life of six days because we only use fresh ingredients," he says.

Others, too, have been rushing to highlight their use of natural ingredients, such as butter and less refined sugars. A raft of natural products has hit the shelves. The Fabulous Bakin' Boys has this month launched a range of additive and hydrogenated fat-free cakes, flapjacks and brownies "made with ingredients you would find at home".

At Taylors of Harrogate, which has recently launched an "all-butter" marmalade loaf cake, marketing manager Alistair McIntosh says: "We've really benefited in the past few years as customers have become concerned about additives because we have a really high-quality ingredients specification."n