The British love affair with sweet biscuits hasn’t crumbled - but it’s certainly going through a rocky patch. At a category level, value sales growth has been artificially propped up by the astonishing success of Belvita breakfast biscuits, and volume sales declined again for many leading brands, including McVitie’s Digestives and Kit Kat, as consumers traded down from higher value biscuits to own label.
Mark Sugden, director of market strategy and planning at McVitie’s owner UBUK, believes inflationary pressures and changes in pricing and promotional strategies across the category, and within specific brands, has been responsible. “There have been more single price point promotions than multibuy deals, which have in the past driven volume,” he says. “And this is largely reflective of the current economic climate.”
Biscuits have also been on the wrong end of the Olympic effect, says Sugden, as retailers gave more in-store display space to categories such as beer & cider, soft drinks and bagged snacks. As market leader in sweet biscuits, UBUK has found itself first in the line of fire. Each of McVitie’s four top 20 brands have suffered volume declines, with only Digestives managing to deliver value growth. It’s now promising one of its “biggest ever” years for NPD IN 2013 to reinvigorate the category.
A number of brands have bucked the downward trend in volume sales - including Cadbury Fingers, Maryland and, most eye-catchingly, Belvita, whose sales soared more than 70%, making it the star performer in the emerging breakfast biscuits category.
Belvita’s £18.6m in extra sales is greater than the value growth across the entire branded category, and is also responsible for 80% of the growth in breakfast biscuits, according to Rahul Gursahani, senior brand manager for Belvita Breakfast. “Belvita has succeeded in the market through strong, sustained marketing investment and truly great innovations such as Belvita Breakfast Duo Crunch,” says Gursahani. “The future for us will bring more innovation in flavours, food forms and formats to ensure we are able to appeal to more consumers and drive further penetration of this category.”
At the more indulgent end of the sweet biscuits market, both Rocky and Club have performed strongly, delivering 8.9% and 17.9% growth, respectively. Rocky was bolstered by the launch of Rocky Chockas in the summer, a piece of NPD that expanded the brand beyond the traditional chocolate biscuit bar format and has been well received in the market, according to brand owner 2 Sisters.
UBUK’s Club brand, meanwhile, responded to consumer demand for value products with the launch of a new six-pack into the convenience channel, price-marked at £1. “We have also continued to innovate with new flavours like the Club Honeycomb variant launched this year,” says Sugden. “This has driven trial of the brand and further built on the relaunch last year.”
While sweet biscuits have, on the whole, struggled, savoury biscuits and cereal bars have made a better fist of holding on to consumers. Cereal bars, in particular, have had a respectable year, growing sales in both value and volume. Although sales of brand leader Kellogg’s Rice Krispies have retracted, the second and third-placed brands - Nature Valley and Kellogg’s Special K - have both enjoyed double-digit growth.
“It has been a fantastic year for Nature Valley,” says sales director Neil Barker. “Building on the long-term growth of the brand, we have further step-changed the investment to drive category growth.” Barker says Nature Valley’s sponsorship of the London 2012 Olympic and Paralympic Games, where Nature Valley was the official supplier of cereal bars, has dramatically increased awareness, trial and penetration, enabling it to significantly grow distribution.
Although price hikes were chiefly responsible for the 8.2% increase in value sales of savoury biscuits, volume decline was negligible and own label achieved 1.5% volume growth. “Savoury biscuits has continued to grow year-on-year, driven by base price increases in a little-promoted category,” says Nielsen client manager Paul Prosser. “The decline in volume highlights the fact that savoury biscuits is an area where consumers are happy to indulge in a premium offering.”
According to Prosser, Jacob’s Crackers have been the biggest contributor to growth, which has been driven in large part by new product Jacob’s Oddities. The NPD has netted £7m since its February launch, he adds, although Ryvita crispbread has also been a high grower “driven very much by base price”.
Nairn’s has also achieved strong value growth, although volume sales have fallen 6.9% as premium lines have grown at a faster rate than core SKUs. Despite its lack of volume growth, the company believes savoury biscuits is a category to watch.
“While it’s been a tough year, over the medium to long term the underlying trend of healthier snacking is driving new consumers to the category and encouraging existing consumers to look to savoury to fulfil snacking needs more often,” says Nairn’s head of marketing Lucy Holroyd. “Consumers are waking up to the fact that this category is no longer about boring, plain crackers.”
TOP LAUCH 2012
Nutri-Grain Breakfast Kellogg’s
Kellogg’s will be hoping its belated move into the breakfast biscuits market will jump-start sales of Nutri-Grain, which slumped by 7.5% this year. It won’t be easy. Kraft’s Belvita brand is already worth £45m and is growing at over 70% a year - but Kellogg’s is optimistic that its three-strong range can grab a sizeable share of this burgeoning market. The biscuits will be available in three variants - oats & honey, fruit & fibre and cereal & milk - and sold in six-packs of four-biscuit servings.
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Top products survey 2012: Biscuits - Belvita is a lone beacon in biscuits