For a category worth nearly £2bn and with penetration of almost 100%, it seems remarkable that biscuits are still posting year-on-year growth of 2.7% [TNS, 52 w/e to 15 July 2007].

But it is - and sweet biscuits are driving growth. Special treats and healthy products grew 11.6% and 9.4% to £101m and £352m respectively while sales of of savoury biscuits fell 0.1% to £72m.

The challenge is to maintain growth. Manufacturers such as UBUK are turning their attentions to impulse channels. Earlier this year, UBUK launched its McVitie's Minis range in 40g grab-and-go packs. "If you look at crisps or confectionery, about 50% of sales are for out-of-home consumption. For biscuits it's about 20%," says Mark Sugden, director of customer marketing at UBUK. "Value sales of mini products have doubled for us in the past year and penetration has gone from 5-10%. "

However, says Sue Garfitt, category controller at Burton's Foods, manufacturers will need to change the way retailers view the category if a shift to impulse is to succeed. "Our trade partners see biscuits as part of ambient grocery, like home bakery, when in fact they have much more in common with impulse products such as confectionery and crisps. One of the challenges we face is to change that perception."

There is also the issue of innovation - or lack thereof in the category. While there has been overall growth in the sweet biscuits segment, sales of chocolate biscuit bars fell 6.5% to a £334m [TNS].

Graham Walker, Nestlé UK trade communications manager, blames lack of innovation, over-promotion and fall-out from the health debate. But the market is turning the corner, he says, and leading the way is Kit Kat 2 Finger - the country's biggest biscuit brand.

"Kit Kat 2 Finger sales are up by 7.2% [Nielsen], as a result of the new foil packaging, the launch of flavours such as Dark and Cappuccino, and the way we have highlighted permissibility by printing the calorie content on the front of packaging - just 107 calories per biscuit," he says.

Other old favourites are also continuing to grow. Biscuit barrel sales are up 1% with everyday and everyday treats worth £228m and £214m respectively [TNS].

The market has been buoyed by UBUK's £6.5m investment in marketing its core McVitie's products, as well as new launches, such as McVitie's Yog Fruit Digestives.

Meanwhile, Fox's Biscuits has introduced new products to its core creams range and redesigned its packaging to distinguish between its everyday and special treat ranges. n