Analysis by Sheila Eggleston The cake and biscuit market isn't so much booming as holding its own, in spite of the nation's reputation for enjoying a sweet tooth. Worth in total £2.2bn, the £823m cake market is static but the £1.42bn biscuit market continues to show a slight decline [TNS Superpanel]. According to TNS, the slide is because of a move away from traditional cake and biscuit sectors while innovative formats expand smaller sectors, and consumers look for more convenience in their hectic lives. Most of the npd activity has been seen in packaging formats and product extensions. More confectionery brands are squeezing into a busy fixture and the overall view is that where there are strong products and brand innovation, with ample media support, markets will grow. Cadbury, already a force in ambient, has stepped into the chiller and freezer, while McVitie's Cake Company has Galaxy and Milky Way cake bars and has introduced a chocolate brownie topped with Mars' M&M's. McVitie's Cake director Garry Biggs says: "Confectionery brands aren't new to the cake market. Cadbury's has always had a presence in cake. If confectionery is stretching into the cake market, it's important it is better than what is out there at the moment. If it's the same old product under a different brand label, it won't push the category forward." Manor Bakeries, manufacturer of Mr Kipling, Cadbury's and Lyons cakes, produces more than six million packs of cakes each week from its four UK bakeries. Marketing director Ian Ayling welcomes any branding that does a clear distinctive job but not when it starts to confuse consumers. "There is only so far you can go with that sector and now we are seeing duplications ­ Galaxy Caramel v Cadbury's Caramel." He says people buy only 30 packs a year from this "wall of cakes" and need help to shop the fixture. "A year ago how many were promoting on a high:low basis? Now its all low price. For a market that's bought 40% on impulse, it changes the way you need to market the product," he adds. MB's mini roll promotion, offering a free mini roll safe in every six pack, drove sales of 44 million individual mini rolls, equivalent to 6.5 million safes, and helped Cadbury's share shoot up by 9.8%. Manor Bakeries now plans to develop this kind of activity. McVitie's biscuit market review 2000 attributes the biscuit sector decline to a combination of warm weather last year which hit chocolate biscuit bar sector sales, and poor new product development initiatives. McVitie's ploughed £8m into its brand in 1999 and intends to top the figure in 2000. Putting its key biscuit brands into small and large tubes has accelerated sales. More than 10.5 million McVitie's Jaffa cake tubes were sold in 1999, driving the range to more than £31m and in its first year McVitie's Chocolate Digestives are estimated to be worth more than £11m. Sales director Colin Hutchison says: "People want portability, resealability and no mess." Hutchison is optimistic the hiccups of 1999 won't be repeated in 2000. "It's early days yet, but it looks as if the market is levelling out." He says that digestive biscuits suffered in value because of Every Day Low Pricing, but volume sales were more positive: "Own label has been declining for two to three years because brands are innovating. "With continued EDLP in the chains, some brands are cheaper and that gives them more value," he adds. Multiples account for 77.4% by value of the cake and pastries market and 78.9% of the biscuit market [TNS]. TNS says Morrisons and Asda are star performers in biscuits and cakes ­ both achieving double digit growth over last year and outperforming the market. Asda, it says, has Sainsbury firmly in its sights in the biscuit market, particularly in volume terms. Its powerful performance comes on the back of continued Rollback activity and strategic promotional activity driving key brands. That contrasts with the pure EDLP approach taken by Tesco which has reaped more modest returns. Another notable performance has come from Safeway, where there was growth in biscuits after the category's short-term deep price cut deals. Cake, on the other hand, has not been targeted as strongly by such deals. McVitie's has a strong base in two of the growth sectors ­ healthier and kids. Its Go Ahead! brand has reached the magic £100m value of which biscuits accounts for £50m and cakes £9m. Fox's Biscuits entered the buoyant healthier' sector in April with Big Softies, a 97% fat free cookie, and in January plans to increase the range with countline formats. Sales director Doug Campbell says: "We plan to play our part in returning the market to growth through sustainable innovation and above the line brand support." Burton's Biscuits, maker of established lines Jammie Dodger and Wagon Wheel biscuits, recently relocated to Blackpool where its new marketing team is re-evaluating its business. Brands marketing controller Rob McNeilly says: "Kids' biscuits is a dynamic sector. The Jammie Dodger brand has grown over the past 14 years but we are looking to extend penetration and bring in more children." Brand activity is focused on 2001 with £2.5m support. Bahlsen's marketing project manager Geoff Wright says: "The move to true luxury products is a parallel to trends within savoury snacks, ice cream and soft drinks ­ products that deliver additional taste to their everyday counterparts." Looking at what makes successful snacking products, he believes smaller bitesize, grazing lines closely meet consumers' expectations. Tests with its Bahlsen Minis sustained sixfold increases in sales in multiples. Capitalising on the demand for indulgent luxury products is newcomer Parma Britishlat, maker of the Grisbi Classic and Tuá ranges consisting of hazelnut, chocolate or coffee fillings, and chocolate covered cream filled wafers. Plans in the pipeline include snack packs. Changing lifestyles and smaller households have forced companies to put more effort behind packaging formats. Horizon Biscuits has moved into 200g resealable tubs with mini versions of its Maryland mini choc chip cookies commanding a premium rsp of 89p compared to the standard 150g flow-wrapped line at 49p. Jacob's Bakery, part of Danone, now includes Tuc, McVitie's cheddars and cheddar breadsticks in its range following their acquisition from United Biscuits. This year it has focused on spicing up its traditional cream cracker range with flavours and snack packs. Its goats cheese and cream cracker snack pack called Snack Match has been rolled out nationally. Claimed to be a first for retail, Scotts of the Dean hopes to appeal to busy consumers with a frozen half-round cake pre-cut into generous portions. Bakkersland De Graaf is the result of a merger of 10 family bakers in Holland. As well as five packs and slab cakes, it offers sliced chocolate madeira cake and madeira cake. Organics is waiting for a major player and Manor Bakeries' Ayling says: "There is an opportunity in cakes but it isn't the biggest. When you look at the developments in better-for-you and organic, it's a 1%-2% market opportunity not a 10% one. But we have been looking at accreditation for our sites so we understand the implications." If the big players get involved in organics, some companies are concerned that pressures on suppliers to drive prices down could affect quality control. Family business Ashbourne Biscuits claims a 50% increase in sales of its sweet organic biscuits this year. "Small companies help provide innovation and specialisation," says managing director Roy Johnson. "My fear is that sourcing for supermarkets will be made abroad where standards do not match ours." Duchy Originals claims to be the leading branded biscuit supplier in the organic sector. This year it added a Highland Shortbread tin with a picture of Balmoral Castle to its limited edition gift range. Another company to gain a Soil Association endorsement is Gray Dunn which has launched organic digestives and half-coated milk-coated digestives in 250g packs. Links with character licensing can be lucrative. Memory Lane Cakes specialises in premium own label and celebration cakes, attributing most growth to its celebration cakes and character licences. New to its range are "pocket money" priced Mini-Pressie cakes. Lowthers Cakes produces Barbie and Action Man mini cakes, and the Fabulous Bakin' Boys claims the link with the Chicken Run film on its muffin four-packs has increased sales by 131.7% since last year. {{FOCUS SPECIALS }}