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The oh-so British occasion of tea and cake is getting pricey. As the cost of a cuppa has risen 3.7% in grocery, the average price per pack of cake has increased 8.1%.

Much of the latter – which has driven a 7.7% value gain – is down to demand for larger formats and brands pushing pricier fare.

The growth in more indulgent, decadent lines “correlated with Covid restrictions being lifted, which were likely to impact more celebratory occasions” notes Ella Wrench, senior client analyst at NielsenIQ.

Plus, shoppers are looking to cakes for comfort amid economic uncertainty, says Mathew Bird, brand director for sweet treats at Premier Foods. Bird points to research by the supplier, which found “26% of shoppers would buy more treat foods to improve their mood in unsettled times”.

To tap this, Premier bolstered its Mr Kipling premium Signature Collection lineup in September with Seriously Chocolatey Brownies and two variants of Gooey Brownie Bites. A month later, Premier stablemate Cadbury added two fancy sharing cakes: Dairy Milk Caramel Layer Cake and Cadbury Crunchie Celebration Cake.

These launches topped a mixed year for the market’s biggest two names. They’re both up in value, making an extra £6.3m in total. However, their volumes dived 8.1% and 5.8% respectively – symptomatic of the wider 3.4% decline across branded cakes.

The third-biggest brand, Soreen, has gone against the grain by growing units. Selling an extra three million packs, it’s the only top five brand in volume growth.

A spokeswoman credits Soreen’s healthier proposition with its success . “As one of the few HFSS-compliant ranges in the cake aisle, we have been able to secure more feature space than we have previously,” she says.

This effect was already clear to see in the data period, which ended before October’s HFSS clampdown came into effect.

So Soreen will be in an even stronger position for 2023, suggests NielsenIQ’s Wrench, who urges other brands to take note.

“With HFSS now live, cake sales will be impacted by the removal of off-shelf promotions,” she says. “Other than the launch of Mr Kipling’s Deliciously Good range, we have seen very little non-HFSS reformulation and innovation in the category. Manufacturers will need to continue to innovate in this space, as a way to offset some of the losses expected as a result of HFSS restrictions.”

Still, Soreen’s buoyant year hasn’t been entirely down to its non-HFSS credentials. The launch of limited-edition flavours, including Gingerbread and Raspberry & White Chocolate, also drove purchase.

And Wrench points to a “return to normal behaviour after pandemic disruption” – which has driven an uptick in Soreen’s convenient formats, such as its mini and lunchbox loaves and pre-buttered slices.

This is a trend that’s also benefited Bonne Maman, which offers individually wrapped madeleines, fruit cakes and muffins – all well-suited to lunchboxes. As such, the brand has overtaken Galaxy in the ranking, with a £2.6m gain on volumes up 9.7%.

Maltesers is another brand worthy of note, adds Wrench. It has “observed double-digit value and volume growth this year through its cake bars, supported by the launch of the mint variant in late 2021”.

Biscuit snacking

The resurgences in on-the-go and lunchbox occasions have given cause for celebration to biscuit makers, too. Brands of all stripes have benefited.

Take Maryland, whose growth was driven by its snack-sized Minis format, styled as “perfect for the on-the-go or lunch occasion”. They’ve contributed to a 15.5% value gain.

Similarly, Maryland’s sister brands Kinder and Fox’s have cashed in on the return of on-the-go occasions. The former is the fastest grower in sweet biscuits thanks to the launch of its two-biscuit Cards snack packs in July 2021. They offer small, individually wrapped products to cater to children and health-conscious parents, explains Jason Sutherland, UK&I sales director at Kinder owner Ferrero.

At Fox’s, portion sizes have also been a focus, with the children’s biscuits segment accounting for one in five out-of-home snacking occasions, according to the brand. As such, it’s expanded its Minis range with Choccie Dodgers and Party Rings.

But bite-sized treats need not just be for kids. McVitie’s Blissfuls by Pladis (see Top Launch, p79) is a more grown-up mini biscuit that comes in a sharing format, designed to be shared on the sofa at the end of the day.

For the beginning of the day, there’s  Belvita. It’s shifted more than four million additional packs of sweet biscuits and cereal bars. The Mondelez brand has been busy launching non-HFSS variants – such as Fruit Crunch bars in Raisin & Currant and Apple & Pear – to maintain visibility in impulse locations.

Healthier options have been a boon for a number of other biscuit players. Chief among them is Trek. It’s up 27.9% in value, making it the fastest grower among the top 10 cereal bar brands. Senior brand manager Alice Boardman attributes this to the launch of an “on-trend” Peanut Butter bar in June and the ongoing success of its Power lineup, which contains 15g of plant-based protein per serve. Tapping sports nutrition trends, the range is “aimed at consumers with busy and active lifestyles who are looking for natural slow-release energy to avoid spikes throughout the day”, Boardman adds.

A similar focus on health is evident at Kind, the second-fastest grower in the top 10. It’s up 27.1% in value, having launched portion-controlled Thin bars in July.

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Everyday options

While healthy and lunchbox-friendly formats are booming, sales of everyday biscuits have been nothing to shout about.

McVitie’s, Cadbury and Oreo are in value and volume decline as “the nostalgia we saw for these brands throughout Covid is weakening, and therefore having a knock-on effect on sales”, Wrench explains.

This effect is being felt across the category, suggests McVitie’s chief marketing officer Aslı Özen Turhan. “It’s been a challenging year for both snacking companies and the grocery industry at large,” she says.

“Due to a challenging economic outlook, many consumers are having to carefully monitor their spending – and this is putting pressure on lots of categories, including biscuits.”

And yet, brands have so far held their own against own label. Volumes of McVitie’s et al are down 2.3% versus private label’s 2.8%.

“In the context of a challenging marketplace, many of our household favourites are holding relatively steady,” says Özen Turhan. She points to the “lipstick effect” observed in treat-led categories, “where shoppers continue to buy small and affordable treats, even if they are cutting spend elsewhere”.

The lipstick effect is arguably less applicable to savoury biscuits. Yet its post-pandemic losses have been moderate. Value’s down just 2.3% on a 4.3% fall in volumes.

Yes, top name Jacob’s sold 8.9 million fewer packs – but that was largely due to Pladis moving its crispbread, flatbread and ciabatta options to sister brand Carr’s in July 2021.

Conversely, Carr’s is the fastest grower in the top 15, leapfrogging Ryvita Crispbreads and Nairns, both of which are in decline – the former having suffered distribution losses. Carr’s sales were buoyed by its Christmas selection box, which Wrench identifies as the sector’s “top NPD last year”.

Little wonder, then, that the brand’s seasonal range was brought back for 2022, supported by a range of cross-category marketing and PoS activity designed to lure additional shoppers.

Another thing likely to attract consumers is an emphasis on plant-based sweet treats, Wrench suggests. Vegan options are already showing promise across biscuits and cakes, she says, highlighting the likes of Oggs, which has grown value 20.2%.

“It will be interesting to see if this trend continues, with shoppers becoming more conscious about what they are consuming, and an increasing number looking to introduce or increase plant-based options in their diet,” Wrench says.

Boardman at Trek – which is wholly plant-based – agrees an “increasing number of people in the UK are either converting to full veganism or following a flexitarian diet, consciously cutting back on meat and dairy and opting for plant-based alternatives”.

So, while afternoon tea is getting pricier, it also looks like it’s getting trendier.

Top Launch 2022

McVitie’s Blissfuls | Pladis UK

Blissfuls Belgian Chocolate & Hazelnut

Pladis took Britain’s favourite biscuit brand into bagged snacks this year. The sharing bags of baked mini McVitie’s biccies, complete with a Belgian milk chocolate centre and flavoured with hazelnut or caramel (rsp: £2.59/228g), are designed to tap evening occasions.  The two-strong range is billed as a “decadent new snacking experience” that would “enhance relevance for sweet biscuits during the evening snacking occasion”, said McVitie’s marketing director David Titman at time of launch in January.

The Grocer Top Products Survey 2022: How can brands stay in focus?