Premier makes most of Brits' comfort eating

Premier Foods has been cracking the whip over Mr Kipling in an attempt to modernise the brand, but overall growth in the cakes category has slowed.

Whether the obesity message is starting to sink in, or credit-squeezed consumers are simply shying away from sweet temptation, cake sales have increased just 3.1% to £1.064bn - down on last year's 6.1%. Strip out food price inflation and the category's performance is likely to look a lot worse.

At least Premier is trying. Since acquiring Mr Kipling in March 2007, it has striven to bring the 40-year-old brand up to date, launching Cake Bites for the lunchbox market in June and then dropping 'exceedingly good' from its ad slogan for the first time since 1976, replacing it with 'exceedingly happy', which was deemed "more carefree and lighthearted".

The culture of cake is changing in line with consumer attitudes to health, according to Waitrose pre-packed cake buyer Sam Witherington. She says 2008 is the year consumers have become more happy to turn a blind eye to fats than artificial nasties.

Top Launch - The Big French Fancy (Mr Kipling) 
Full marks for bravery to the Premier Foods marketeer who first looked at a French Fancy and thought "we need to super-size that". Eighty grams of fluorescent icing, sponge and lemon curd, The Big French Fancy arrived on-shelf in August as a fun riposte to the calorie-conscious times. Although primarily designed for the celebration market, it is typical of the brand's drive to win younger consumers with less formal offerings.
"The key trend this year has been for cleaner recipes," says Witherington. "Customers are looking for a healthier,  more natural offering. Not in terms of lower-fat cakes, but as a return to traditional recipes using natural ingredients free from artificial flavourings and colourings."

The top products don't exactly read like Gillian McKeith's wishlist. Cadbury Mini Rolls stand untouchable in top position, but sales fell 6% to £38.2m. Cadbury Cake Bars fared worse and plummeted from 12th place to 20th with an 18.2% drop. Mr Kipling's Viennese Whirls (and the small cakes range in general) were a star performer, replacing Soreen malt loaf in third place, growing 22.5% to £15.1m.

In a category dominated by snack formats, Mr Kipling's Manor House Cake dropped 1.6% to 19th place. However, Witherington believes the old-fashioned slab cakes are a recession-friendly proposition that could fare well next year. "Slab cakes are a store cupboard purchase that customers will continue to buy, particularly in the current climate when they are closely scrutinising their food purchases," she says.

But Premier is facing real pressure from retailers. It must somehow make the figures meet while hampered by promotional offers on its Mr Kipling and Cadbury brands and renewed retailer and consumer confidence in own label. A piece of cake it ain't.

View The Grocer's definitive Top Products 2008 survey