Consumers are spending more on convenient, indulgent and healthy biscuits and cakes. Helen Gregory reports
Eating cakes and biscuits is no longer just a leisurely affair. It’s speeding up in the quest for convenience.
Manufacturers are embracing impulse products, shrinking the size of cakes and biscuits, particularly savoury ones, to make them rivals to crisps and confectionery.
Mark Ferguson, category director at Manor Bakeries, says there is plenty of potential to develop individually wrapped cakes and slices further.
He says the adult population only spends an average £2 per head on cakes for immediate consumption each year,compared with £50 per head on confectionery.
“Eat-now cake is growing at 31% and in five years the sector will be worth £168m.”
Memory Lane Cakes, which produces a range of Nestlé-branded cakes and muffins, says the children’s treat sector is also underdeveloped in cakes. While products designed specifically for children account for 6% of the biscuit market and 20% of the confectionery market, the figure for cakes is 3%.
Phil Batchelor, managing director, says: “The proportion of cakes sold as impulse products is 1% - moving this figure up to 2.5% will generate an extra £30m in retail sales.”
The biscuits market is worth £1.67bn [TNS, 52 w/e August 15, 2004] and grew 2.3% in the last year as a result of a shift towards premium sectors.
Cakes are performing slightly ahead of biscuits, up 5.7% to £1.2bn [TNS, 52 w/e July 2004].
Although cake bars are faring worst, following a similar pattern to chocolate biscuit bars, which are down 6.4%, TNS says small tarts, flapjacks and slices have all performed strongly as a result of innovation.
Retailers such as Tesco and Asda are doing their best to encourage spending.
The two chains have been strong on promotions, which has particularly driven own label growth.
Cadbury and McVitie’s have been slugging it out over digestives but there’s been little brand development in the biscuits category this year.
Consequently, own label is stealing share; branded biscuits still account for 77.5% of value sales [IRI grocery & impulse outlets, 52 w/e August 7, 2004] but they are declining 1.3% year-on-year in value and 4.6% in volume.
However, own label biscuits account for 22.5% and are growing by 2.1% in value and 3.1% in volume.
The trend towards indulgence has driven demand for higher quality products, says Simon Smith, Fox’s Biscuits marketing
director: “There’s an ongoing premiumisation of the biscuit category. Everyday biscuits has been growing by value for the first time in three years.”
Sarah Lewis, Co-operative Group category marketing manager, says: “Many new cake products have been introduced under retailer premium brands in both the small and whole cake arena and this trend is expected to continue as consumers expect a higher quality treat as a reward for healthier eating on a day-to-day basis.”
The trend towards healthy eating is having the biggest impact. Consumers are switching particularly to cereal bars - and most manufacturers have launched versions, making it the strongest-performing sector (up 14.8%).
Children’s lunchboxes particularly contain a greater number of cereal bars instead of chocolate biscuit bars.
However, healthy eating is usually a solitary affair - unlike the consumption of chocolate biscuits, which are still shared round among friends and family.
Paul Selvey, United Biscuits’ head of consumer marketing, says: “You won’t often get people offering their friends healthy biscuits - instead, they’ll share round more indulgent products.”
But with all the noise going on in the obesity debate, the Biscuit, Cake, Chocolate and Confectionery Association is adamant that cakes and biscuits are not the baddies.
Penny Hawley, communications director, says:“Contrary to some assumptions, there is no direct correlation between biscuit and cake consumption and the complex and multi-factorial issues surrounding obesity and the food and health debate generally.
“While rates of obesity have increased recently, consumption of biscuits and cakes have not.”
Eating cakes and biscuits is no longer just a leisurely affair. It’s speeding up in the quest for convenience.
Manufacturers are embracing impulse products, shrinking the size of cakes and biscuits, particularly savoury ones, to make them rivals to crisps and confectionery.
Mark Ferguson, category director at Manor Bakeries, says there is plenty of potential to develop individually wrapped cakes and slices further.
He says the adult population only spends an average £2 per head on cakes for immediate consumption each year,compared with £50 per head on confectionery.
“Eat-now cake is growing at 31% and in five years the sector will be worth £168m.”
Memory Lane Cakes, which produces a range of Nestlé-branded cakes and muffins, says the children’s treat sector is also underdeveloped in cakes. While products designed specifically for children account for 6% of the biscuit market and 20% of the confectionery market, the figure for cakes is 3%.
Phil Batchelor, managing director, says: “The proportion of cakes sold as impulse products is 1% - moving this figure up to 2.5% will generate an extra £30m in retail sales.”
The biscuits market is worth £1.67bn [TNS, 52 w/e August 15, 2004] and grew 2.3% in the last year as a result of a shift towards premium sectors.
Cakes are performing slightly ahead of biscuits, up 5.7% to £1.2bn [TNS, 52 w/e July 2004].
Although cake bars are faring worst, following a similar pattern to chocolate biscuit bars, which are down 6.4%, TNS says small tarts, flapjacks and slices have all performed strongly as a result of innovation.
Retailers such as Tesco and Asda are doing their best to encourage spending.
The two chains have been strong on promotions, which has particularly driven own label growth.
Cadbury and McVitie’s have been slugging it out over digestives but there’s been little brand development in the biscuits category this year.
Consequently, own label is stealing share; branded biscuits still account for 77.5% of value sales [IRI grocery & impulse outlets, 52 w/e August 7, 2004] but they are declining 1.3% year-on-year in value and 4.6% in volume.
However, own label biscuits account for 22.5% and are growing by 2.1% in value and 3.1% in volume.
The trend towards indulgence has driven demand for higher quality products, says Simon Smith, Fox’s Biscuits marketing
director: “There’s an ongoing premiumisation of the biscuit category. Everyday biscuits has been growing by value for the first time in three years.”
Sarah Lewis, Co-operative Group category marketing manager, says: “Many new cake products have been introduced under retailer premium brands in both the small and whole cake arena and this trend is expected to continue as consumers expect a higher quality treat as a reward for healthier eating on a day-to-day basis.”
The trend towards healthy eating is having the biggest impact. Consumers are switching particularly to cereal bars - and most manufacturers have launched versions, making it the strongest-performing sector (up 14.8%).
Children’s lunchboxes particularly contain a greater number of cereal bars instead of chocolate biscuit bars.
However, healthy eating is usually a solitary affair - unlike the consumption of chocolate biscuits, which are still shared round among friends and family.
Paul Selvey, United Biscuits’ head of consumer marketing, says: “You won’t often get people offering their friends healthy biscuits - instead, they’ll share round more indulgent products.”
But with all the noise going on in the obesity debate, the Biscuit, Cake, Chocolate and Confectionery Association is adamant that cakes and biscuits are not the baddies.
Penny Hawley, communications director, says:“Contrary to some assumptions, there is no direct correlation between biscuit and cake consumption and the complex and multi-factorial issues surrounding obesity and the food and health debate generally.
“While rates of obesity have increased recently, consumption of biscuits and cakes have not.”
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