56

Cost-driven price rises have boosted the value of the cakes and biscuits markets, but
volume sales have increased too thanks to much-needed innovation, says Lisa Riley
f
o
c
u
s

o
n
.
.
.
B
rits seem to be reacting to the
threat of a recession by reach-
ing for the biscuit barrel or
the cake tin.
Biscuits, in particular, have
thrived in the past year, with
sales up 7% to 1.93bn, while cake sales
increased 5% to 1.55bn [TNS 52w/e 10
August 2008].
Much of this value growth was down to
the soaring cost of ingredients pushing
up prices the price of McVities Diges-
tives have shot up 22.7% in the past seven
months, for example [The Grocer 33 price
survey]. However, the underlying trend is
positive, with biscuit sales up 2% in volume
and cake sales up 0.5% [TNS].
The market continues to be buoyant
and is showing a strong resistance to the
credit crunch, says Mark Sudgen, direc-
tor of customer marketing at UBUK. Price
increases have played a big part in value
growth, but the popularity of some of the
more expensive sub-sectors, including spe-
cial treats and health, has had a positive
impact across biscuit and cake sales.
Continued pressure on commodity prices
is almost certain to push prices up further
in the coming year, but just how much is
hard to predict as the industry does not yet
have the full picture of this years UK har-
vest. The wet summer may have pushed
yields down lower than expected.
Acquisitions are a natural consequence
of a tough trading environment, and the
cakes and biscuits industry is no excep-
tion. Premier Foods purchased RHM,
including the veteran Mr Kipling brand, in
2007. UBUK also changed hands, bought by
private equity groups Blackstone and PAI
Partners. Duke Street Capitals acquisition
of Burtons Foods followed and the latter
then bought Northumbrian Fine Foods.
Own-label specialist Finsbury Food
Group also swelled its portfolio when it
snapped up Anthony Alan Foods, a move
that offers the opportunity to streamline
its range. Increased price competition
between the major multiples has chal-
lenged suppliers to offer better products
at lower prices, therefore driving them to
rationalise, says Graeme Clark, the com-
panys brand manager.
Sugden also supports that view, adding
that changes in ownership have allowed
companies to continue to invest in brands
and have helped the category grow sales
overall.
Premier Foods decision to pension off
ageing brand ambassador Mr Kipling by
dropping the name from ads after 30 years
of service marked a strategy to attract
new, younger customers and different
audiences to cakes and biscuits with a
friendlier, more lighthearted approach.
The controversial move has
Biscuits give it both barrels
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cakes & biscuits

The market is
buoyant and is showing
strong resistance to
the credit crunch

Mark Sugden

cakes Market
Market share
%
Produced for The Grocer by TNS Worldpanel. TNS Worldpanel monitors the grocery retailer
take-home purchasing habits of 25,000 demographically representative British households.
Call 020 8967 4700 for further details
The cake sector has increased 5% in value
compared with last year, but much of this
growth is from raw material-driven price
increases, and volume has grown by only
0.5%. And though in the past 12 months
the number of people buying cake has
grown, they have bought less often.
Small cakes are the largest sub-sector,
and outpaced the market, increasing 11%
by value and 6% by volume. Growth in this
sub-sector is driven by rising prices and
increased shopping frequency, but also
by attracting new buyers and through
shoppers buying more packs per visit.
Large Swiss rolls (one of the smallest
sub-sectors) and malt/fruit loaves are the
fastest-growing sub-sectors.
In contrast, small tarts, muffns and
cake bars are showing the sharpest
decline, with fewer people buying them,
and theyre buying them less often.
M&S and The Co-operative Group
overtrade in the market, as do Somerfeld
and Morrisons to a lesser extent.
Sainsburys is in line with its overall
performance, while the other multiples
undertrade.
top 10 cake retailers
RETAILER cAkE shARE
ToTAL GRocERy
shARE
oVERTRADE*/
unDERTRADE
M&S 9.1 3.3 278
Co-op 4.8 3.8 127
Somerfeld 3.7 3.4 110
Morrisons 10.7 11.6 108
Sainsburys 14.8 14.8 100
Tesco 26.7 27.5 97
Waitrose 3.5 3.7 96
Asda 13.2 14.1 93
Discounters 4.0 4.7 86
Iceland 1.5 1.8 84
Source: TNS Worldpanel 52w/e 10 August 2008
* 100+ represents a sales overtrade
30
15.7
10.2
6.6
6.5
6.3
4.3
20.2
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category value: cakes
VAlue ChAnge
M YOY %
Small cakes 464 10.8
large whole cakes 243 1.2
Small tarts 102 4.5
Small pies 100 0.4
Slices 97 6.8
Malt/fruit loaves 67 12.7
Small Swiss roll 59 0.3
large tarts 59 2.9
Muffns 56 2.4
large Swiss roll 47 15.4
Slab/cut cakes 47 9.9
Cake bars 25 1.3
All others 158 3.9
Total category value 1,545 5.0
Source: TNS Worldpanel 52w/e 10 August 2008
not been greeted with universal
approval. It is essential Mr Kipling ensures
tradition is maintained along with more
modern trends if it does not want to back-
track, warns one industry insider.
Cakes
Generally, however, the cake categorys
attempts to modernise its image and try
and address health concerns have gone
down well.
Manufacturers have strived to make
their cakes more versatile by targeting a
wider audience with specifc NPD, ranging
from cakes aimed at adult lunchboxes to
the frst licensed malt loaf for children.
Traditional cake consumption in the
home has been in slow decline as fewer
people make time to enjoy tea with a cake
in the afternoon, says Dan Ince, head of
marketing for the Mr Kipling brand.
However, other eating occasions have
emerged, such as cake with morning cof-
fee, as a snack at work, or even cake in the
evening with friends, perhaps with a glass
of wine. The defnition of cake is also evolv-
ing and now includes muffns, doughnuts
and fapjacks.
The bite-sized cake, positioned as a con-
venient option for easy sharing and on-the-
go snacking is one of the ways suppliers are
targeting the needs of todays consumers.
The format gained momentum last year
when Premier Foods launched Mr Kipling
Cake Bites, the brands biggest NPD activity
for a decade. It also brought out bite-sized
versions of the Cadbury cakes it produces
under licence.
The premium end of the market also
helped boost the cake categorys perform-
ance. The fall-out of consumers being
more healthy is being mitigated by con-
sumers indulging themselves when they
do break their good behaviour, says Harry
Foster, senior market analyst at Mintel.
The strength of this trend has been
facilitated by brands such as Galaxy and
Cadbury crossing over from the chocolate
market to the luxury cake category. This
55
helps to keep the market fresh and relevant
to consumers.
Growth of indulgent products has now
overtaken that of healthier options, accord-
ing to Gail Lindsay, marketing manager for
ambient and frozen bakery supplier Rich.
Convenience is also a key trend in the sec-
tor as more consumers are eating on the go
to accommodate their busy lifestyles, and
snacking is now the norm, she adds.
Even with the renewed competition from
premium products, health continues to
play a major role in the cake category.
McVities Cake Company says sales of
impulse cakes are benefiting from con-
sumers perceiving them as more natural
and less artifcial than competing snacks.
In August the company relaunched its
Eat Now range with revamped packaging
to highlight the products health claims.
It also launched Wholesense, cakes made
from wholemeal four and fruit, in a bid to
win over health-conscious shoppers.
Provenance and eco-friendly credentials
are also important to cake consumers, says
Mark Bruce, brands director for Finsbury
Food Group.

Other eating
occasions have
emerged, such as cake
in the evening with
friends, perhaps with a
glass of wine

Dan Ince

smALL cAkEs
WhoLE
LARGE
cAkEs
ALL oThERs
mALT/fRuIT
LoAVEs
oThER
smALL TARTs
smALL pIEs
sLIcEs
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cakes & biscuits
In recent times we have seen
increasing consumer interest in UK-made
products. Consumers want to support
local businesses and are conscious of food
miles. However, he warns these factors
could become vulnerable to the economic
situation as consumers tighten their purse
strings.
Generally, own label goods have bene-
fted from the credit crunch as people have
switched from more expensive brands.
Cakes are poised for further increases.
Own label already commands a 62.8%
share of the category, with sales up 0.3%
[TNS 52w/e 10 August 2008].
Bruce puts the good performance down
to retailers expanding their ranges to
include standard and premium offers.
Sales have also been helped by more shelf
space being devoted to the sector in the
past year, he says.
Small cakes is the largest sector with
sales up 10.8% to 464.2m [TNS], nearly
double the value of the second-biggest sec-
tor, large whole cakes, which grew 1.2% to
243.1m. Sales of large Swiss rolls outper-
formed all other sub-sectors, albeit from
a small base, with sales up an impressive
15.4% to 47.1m.
The malt and fruit loaves sector also
performed well, growing 12.7% to 66.6m
thanks to shoppers viewing them as bet-
ter-for-you options.
One of the biggest launches came from
Soreen, which teamed up with Disney to
launch Disney Mini Malts. The individu-
ally wrapped slices of malt loaf are made to
a different recipe from the standard Soreen
to give them a child-friendly edge. They
also have a lighter texture and colour, are
less sticky and have a cinnamon favour.
Soreens new owner, McCambridge,
which acquired the brand in July last year
at the same time as own-label manufac-
turer Inter Link, intends to use the new
format to grow the 34m malt loaf market
by 10% in the frst year, according to mar-
keting manager Alison Dunn. She admits
that getting suffcient investment for NPD
at Soreen has been tough in the past year.
We have had to work through some fnan-
cial diffculties over the past 12 months but
these new products herald a new dawn for
Soreen, she says.
Smaller, more portable products were
not the only news this year. The Fabulous
Bakin Boys entered new territory when it
expanded its Cupcakes range to include
a kingsize version aimed at adult lunch-
boxes. By pricing it at 1.39 for a pack of
four, the company claimed the launch was
credit crunch-focused.
56
Major trends in cakes and biscuits
Biscuit brands
join bar brawl
Biscuit-branded cereal-type
bars are all the rage. The
original breakfast cereal bars
from the big brands, such as
Kelloggs and Nestl, have
boomed in recent years,
primarily because they
have been perceived as a
healthier option. But biscuit
manufacturers are fghting
back. Burtons has led the way
by throwing two of its biggest
biscuit brands, Maryland and
Jammie Dodgers, into the
cereal-type bar sector, as well
as launching a posh variant
through its partnership with
organic chocolate business
Green & Blacks.
When is a muffn
not a muffn?
Montys Bakehouse, best
known for upmarket pastries
and pizzas, has developed
Scoffns, a cross between a
muffn and a scone.
The company says the
newcomer, which comes
in savoury and vegetarian
varieties and can be eaten
hot or cold, flls a gap for a
premium savoury on-the-go
snacking product.
Scoffns come in individual
boxes that can go straight
into the oven, and are priced
at 1.80 to 1.99 per 100g
portion. Fillings include
bacon, chorizo sausage,
cheese, mushrooms, sundried
tomatoes, pesto and herbs.
The range is currently sold in
Aramark and through a chain
of pasty concessions in the
north of England.
The little and large show
Size does matter at least
where cakes are concerned.
In the past year, a trend for
oversizing and minimising
has emerged, with several big
brand names jumping on the
bandwagon.
Premier Foods went both
ways with the August launch
of The Big French Fancy a
giant version of its iconic Mr
Kipling brand French Fancy, as
well as adding Bite Size cakes
under the same banner earlier
in the year.
Meanwhile, The Fabulous
Bakin Boys opted for an
enlargement when it added a
kingsize option to its cupcakes
range, which is nearly twice
the size of its standard
version. This went on shelf in
August and was targeted at
the adult lunchbox market.
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cakes & biscuits
We wanted to make sure that,
even when times are hard, consumers can
still afford to buy our good-quality prod-
ucts, says MD Gary Frank. The company
has also been clearing its portfolio of arti-
fcial ingredients and hydrogenated fats to
tap into the health trend.
Only four of the 13 cake sub-sectors
experienced a decline in sales small tarts,
small pies, cake bars and muffns, which
were down by 4.5%, 0.4%, 1.3% and 2.4%
respectively [TNS] as consumers opted for
newer formats and sponge products rather
than pastry options.
Mintel nevertheless predicts the cake
market as a whole will likely to continue
to grow thanks to two key factors. The
growing number of older consumers, who
are the most frequent traditional cake eat-
ers and less susceptible to changing con-
sumption trends, is set to boost sales,
says Foster. On top of this, manufacturers
are likely to continue innovation and NPD
targeted at the younger end of the market,
giving the category plenty of opportunity
to grow sales further.
Biscuits
Biscuits have fared even better than cakes
in the past year. They are a fundamental
part of the British way of life. The sector
is almost as embedded in our culture as
the cuppa, which is perhaps one of the
reasons the market appears to be almost
recession-proof.
Last year sales were up 7% in value and
2% in volume [TNS] despite the increasing
fnancial pressures on UK households.
Brits look at biscuits as an inexpensive
treat and we see the economic situation as
a potential opportunity, given that people
are more likely to stay in and treat them-
selves, says Mark Sugden, director of cus-
tomer marketing at UBUK.
Sugden predicts the category will
62
S
ticking to quality
relentlessly and
uncompromisingly is the
mantra of organic wholesale
business Honeyrose Bakery,
which has just moved into
new London premises to
increase its capacity fourfold.
With a turnover close
to 3m, and a 40-strong
workforce, the company is
aiming to become a middle-
sized manufacturer.
One of the points of
difference it aims to bring
to the cakes and biscuits
category is exceptional
ingredients. It can take us
dozen of samples to fnd the
right blueberry, says founder
Lise Madsen, who set up the
company eight years ago.
organic cake Works like a treat For honeyrose
The business is also careful
with costs to achieve prices
that even non-organic
equivalents fnd hard to
achieve.
Madsen is a pastry chef
by profession and trained
in Paris and Germany.
Honeyrose Bakery was born
when she quit her job in food
management to plug a gap
in the market for what she
describes as organic cakes
that taste sinful.
To get things rolling,
Madsen locked herself in
the kitchen until she had
the perfect recipes and re-
mortgaged her fat and sold
her car to fnance the venture,
helped by a small amount
from minority investors.
As a consumer of organics,
all the cakes I could fnd at the
time were dry and boring,
she says. I have never sold a
product I could not be proud
of. It is a lot more fun to have
principles and you sleep
better at night.
Products from the bakery,
which include muffns,
brownies, cookies and cakes,
can be found in Waitrose,
Fresh & Wild and Harrods.
They all come with a premium
stamp and are aimed at
organic consumers who dont
want to pay over the odds for
their food.
Our theory is that people
will allow themselves an
organic treat if it is well
priced, says Madsen.
Intriguing name, intriguing
prospect. Named after the Scottish
Borders town where the traditional
recipe comes from, Ecclefechan
tarts are similar to mince pies
but are made with a rich flling
of sultanas, currants, glc cherry
and chopped almonds.
Less sweet, more buttery yet
with a distinctive almondy taste,
one to watch
eccleFechan: Will it be the neW Mince pie?
they could even prove a popular
alternative to their Christmas-
oriented rivals, while not being
limited to seasonal sales.
Walkers, which launched
the tarts in February, reckons
the old favourite will rekindle
fond memories among older
consumers, as well as tempting a
younger market.
James Walker, joint managing
director, says the tarts have
been well received in higher end
independent stores their target
channel. They are a genuine,
authentic Scottish product with a
lot of heritage, he adds.
The tarts won gold at this years
Guild of Fine Food Great Taste
Awards.
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cakes & biscuits
64
continue to generate good growth
in the next year in value and volume terms.
Data from past recessional periods shows
that biscuit sales hold up in hard times,
he adds.
His optimism is not surprising consid-
ering it has been a good year for UBUK,
whose portfolio hosts some of the biggest
brand names, including McVities and Hob-
Nobs. Over the past year its total biscuit
sales have risen 7.4% to 501m, according
to Nielsen [52w/e 6 September 2008].
Special treats was the best-performing
segment, up 12.7% to 123.2m, followed
by everyday treats and healthier biscuits,
which rose 9.9% to 238.9m and 8.3% to
380.2m respectively [TNS]. The latter is
still the biggest sector and easily outper-
formed second-placed chocolate biscuit
bars, which increased 1.8% to 342.2m.
With healthier eating dominating a lot
of consumers snacking behaviour, many
are switching from chocolate biscuit bars
to cereal bars because of the perceived
health benefts, says Sue Garftt, head of
insight and category at Burtons Foods,
which made its frst foray into the cereal
bar market last year.
It extended two of its leading brands
Jammie Dodgers and Maryland into the
format and also forged a partnership with
organic chocolate brand Green & Blacks to
launch a premium option.
Putting established brands into cereal
bars has enabled Burtons to boost their
permissibility and expand the brands
target audience, according to Garftt. The
moves have generated respectable sales so
far a combined total of 750,000 for the
May launches of Jammie Dodgers and Mar-
yland and 1.2m for the Green and Blacks
lines [Nielsen 52w/e 9 August 2008].
Burtons acquisition of Northumbrian
Fine Foods this year is likely to reinforce
its position within health and premium,
and Garftt describes it as a perfect
an exceedingly good Move?
. W
ould KitKat, Jaffa Cakes and Penguin
have succeeded without memorable
slogans or commercials?
For most people, KitKat is the defnitive
break brand, Jaffa Cakes will forever be the
only product with an orangey centre, and
Penguin will always be synonymous with those
waddling brand ambassadors.
Its a simple yet effective combination
brand equity injected with real emotion, says
Kate Waddell, managing director of consumer
brands at brand consultancy Dragon Brands.
So, why, after years of establishing clear
brand messages, does a brand owner decide
it is time to change tack? Mr Kipling has
abandoned its exceedingly good cakes
strapline and aged brand ambassador in
favour of a new take: exceedingly happy
cakes. And the switch has not impressed some
experts.
What is achieved by dumping iconic
lines but to tell the consumer that this great
brand has fundamentally changed? says
Don Williams, CEO at branding and design
consultancy Pi Global.
This naturally results in the need to spend
another fortune to re-educate the consumer as
to how and why its changed.
The history of brands is littered with about-
turns. Hovis, for example, has reverted to
the boy in the cap, eschewing Simpsons-style
cartoon families.
Only if brands are close to deaths door
should their iconic elements be tossed aside,
says Williams.
And even then, they should be replaced
with new foundations of substance and real
brand relevance, capable of rebuilding the
brand in the long term, rather than by a
favour-of-the-month creative indulgence.
However, Dan Ince, head of marketing
for Mr Kipling, points out that the brand
has retained its exceedingly tag , merely
swapping good for happy. This, he says,
taps directly into the inherent happiness that
accompanies consumers enjoyment of cake.
Last year sales of celebration
cakes were up nearly 3% to
137m, according to Nielsen [MAT
September 2008], reversing the
the previous years downturn.
It seems manufacturers efforts
to make the category more
appealing are starting to pay off.
In a market dominated by
own-label offerings Finsbury Food
celebration cakes
turnaround is soMething to celebrate
Group, a key player in the sector,
has made recipe changes to its
celebrations cake menu in the past
couple of years. By the end of this
year, the entire range will be free
from artifcial colours and favours.
Celebration cakes should still
have the correct balance in
products, says brand director
Mark Bruce.
Consumers view these products
in a different way. However, it is
still important that, together with
a fantastic visual and taste appeal,
they should also give assurance on
the ingredients used.
Finsbury has also added kids TV
favourites Peppa Pig and Ben 10 to
the categorys licensed character
line-up.
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strategic ft for Burtons because of
its expertise within the cereal bars mar-
ket.
Cereal-type bars have driven impressive
growth in the healthier biscuits segment
in the past few years.
A lot of success is down to Kelloggs
and other cereal makers stretching their
breakfast brands into the category, says
Jon Dance, marketing manager for Conti-
nental biscuit manufacturer Bahlsen. The
perception is that these products are bet-
ter for you, but while they might be lower
in fat, most are just as high in sugar as a
standard biscuit.
He warns that cereal bar makers fortunes
could take a downturn when shoppers
start to realise that some of the ingredients
used are not particularly healthy.
UBUKs Go Ahead! health-oriented brand
also tapped into the trend for better-for-you
products, growing 22% to 51.3m [Nielsen
52 w/e to 6 September 2008]. And it was a
good year for Nature Valley, which claims
sales of 8.6m since its launch two years
ago. The brand benefted from a 4m adver-
tising push this year and added a roasted
almond favour to its line-up.
Nestl has also been capitalising on the
health trend by highlighting its permissi-
bility with an on-pack fash displaying the
number of calories (107) in its two-fnger
KitKat. The brand benefted from a 14m
media campaign this year, which helped
to keep it in the bestseller slot, followed
by McVities Chocolate Digestives and Cad-
bury Fingers.
KitKats fortunes have been boosted by
the brands extension with orange, mint,
dark and cappuccino varieties, says Gra-
ham Walker, communications manager for
Nestl. This has added value as well as cre-
ated choice for consumers, he claims.
KitKat isnt the only brand that has been
extended. NPD across the biscuit market
has consisted predominantly of range
biscuit Market
Market share
%
Produced for The Grocer by TNS Worldpanel. TNS Worldpanel monitors the grocery retailer
take-home purchasing habits of 25,000 demographically representative British households.
Call 020 8967 4700 for further details
T
he biscuit market has grown by 7%
in value in the past year and is worth
more than 1.9bn. The fact that
volume has grown at 2% in the same
period indicates that much of this value
growth has come from increased prices.
Shoppers, though, are purchasing biscuits
more often.
The main growth sectors have been
healthier biscuits and everyday treats.
Healthier biscuits is the largest sector
and accounts for 20% of the market.
The growth here has come from cereal
bars and the sector has also attracted
new buyers. New products have not
signifcantly infuenced the market and
account for only 2% of total market sales.
KitKat is still the biggest biscuit brand,
although it has declined in value slightly,
mainly because fewer customers have
been buying. One of the winners of the
year has been Cadbury Fingers, which
became the third-largest brand.
M&S and discounters such as Aldi and
Lidl over-trade in biscuits compared with
their share of the total grocery market.
top 10 biscuit retailers
RETAILER BIscuIT shARE
ToTAL GRocERy
shARE
oVERTRADE*/
unDERTRADE
M&S 6.9 3.3 211
Discounters 5.4 4.7 116
Somerfeld 3.7 3.4 110
Co-op 4.1 3.8 109
Morrisons 11.5 10.7 107
Iceland 1.9 1.8 107
Tesco 26.8 27.5 97
Waitrose 3.5 3.7 96
Asda 13.5 14.1 96
Sainsburys 14.0 14.8 95
Source: TNS Worldpanel 52w/e 10 August 2008
* 100+ represents a sales overtrade
19.7
17.7
12.9 12.5
12.4
8.8
6.4
5.7
4.0
cRAckERs &
cRIspBREADs
EVERyDAy TREATs
sEAsonAL
BIscuITs
spEcIAL
TREATs
chILDREns
BIscuITs
category value: biscuits
VAlue ChAnge
M YOY %
healthier biscuits 380 8.3
Chocolate biscuit bars 342 1.8
everyday biscuits 248 8.6
Crackers & crispbreads 241 4.8
everyday treats 239 9.9
Seasonal biscuits 170 8.4
Special treats 123 12.7
Childrens biscuits 110 6.0
Savoury biscuits 77 7.2
Total category value 1,932 7.0
Source: TNS Worldpanel - 52w/e 10 August 2008
extensions, primarily because this is a
category where consumers are extremely
loyal to their favourites.
Taking healthier products out of the
equation, only one of the categorys top-
performing biscuits McVities Chocolate
HobNobs is less than 30 years old.
It is very expensive to develop a new
brand when an extension of a pre-existing
favourite, if done well, can attract just as
many consumers, says Bahlsens Dance.
Penguin has been doing it for years, while
Burtons has recently done it with its Cad-
burys chocolate biscuit range.
One newcomer that looks likely to start
nipping at the heels of top performers
is Oreo. Available in the US since 1912, it
made its UK debut in March backed by a
4m media campaign. The biscuit brand is
worth more than $1bn worldwide, accord-
ing to brand owner Kraft Foods, which is
determined to grab itself a chunk of the
UK market.
Bahlsen, meanwhile, has brought out
Dip It!, an oval-shaped biscuit aimed at
dunking enthusiasts, which the company
hopes will increase the brands appeal to a
younger audience.
Other newcomers include Yumbles
which marks UBUKs first foray into
organic and Foxs Whipped Creams in
two favours, which are positioned at the
premium end of the market. Foxs June
launch had the support of a 5m advertis-
ing spend for the total brand this year, the
companys biggest to date.
The range aims to fll a gap in
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BIscuITs
hEALThIER
BIscuITs
chocoLATE
BIscuIT
BARs
EVERyDAy
BIscuITs

Brits look at biscuits

as an inexpensive treat
and we see the
economic situation as a
potential opportunity

Mark Sugden

the grown-up indulgence category,

says managing director Graham Hunter. It
offers consumers an alternative to choco-
late-loaded biscuits and cookies.
McVities also dug deep into its market-
ing pockets, with a 5m push for its port-
folio at the beginning of the year.
Free-from
Alongside indulgence, health and more
specifcally free-from is the other key trend
shaping the sector. Sales of free-from cakes
and biscuits have been gathering pace in
the past year.
It is one of the biggest sectors within the
total free-from market and is also one of
the key growth areas, according to leading
brand Mrs Crimbles.
Last year, sales of total free-from prod-
ucts rose 25% in both value and volume
terms and the category is now worth
120m, according to the companys own
estimates, which are based on IRI and TNS
data. Whatever source is used, however, a
quick glance at supermarket shelves con-
frms that growth in the sector is impres-
sive.
This can be put down to a growing
awareness of food allergies and intoler-
ances as well as better product quality,
says Jeremy Woods, Mrs Crimbles manag-
ing director. The high quality of products,
such as Mrs Crimbles, and a wider variety
of offerings, is allowing free-from cakes
and biscuits to compete on the main cake
and biscuits aisles.
cakes & biscuits
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25 October 2008
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Produced for The Grocer by Cambridge Fast Foodfax, an independent standardised product testing service where a sample of 50
consumers rate new products across ten key performance measures. Maximum score 50. Details on www.fast-foodfax.com
Changing tastes and the drive to eat more
healthily are reshaping the cakes and biscuits
category.
Category ratings have gone up over the past
two years in sweet biscuits and family-sized
cakes as suppliers have responded to the need
to deliver treats.
Only the individual cake sector has remained
the same, held back by the introduction
of more rustic oat-based and muesli-style
products. Bite-sized formats have kept the
sector convenient and therefore relevant,
particularly for chocolate treats.
The family-sized sector has been revitalised
by a new generation of larger, traditional
recipe cakes from artisan suppliers.
Mr Kipling Lemon Individual
Sponge Cakes
A great brand, but these were
not only a bit expensive, they
proved to be too bite-sized.
You would need several,
said one reviewer.
SCore: 35
Category average: 36
Thorntons Mini Chocolate
Orange Cakes
Attractively packaged, with
the promise of thick chocolate,
these cakes proved to be a
great choice when looking for
a real treat.
SCore: 39
Category average: 36
Penguin Triple
Chocolate Wafer
Consumers were a bit
disappointed. They had a nice
chocolate taste, but were not
much different from other
wafer bars, said one.
SCore: 38
Category average: 40
What the consuMers think: cakes
trade proMotions
1. In our year-on-year comparison of category-based promotions Sainsburys bucked the trend with an
increased investment in cakes and pastries n Oct 06 - Sep 07 n Oct 07 - Sep 08
6%
5%
4%
3%
2%
1%
asda Morrisons sainsburys soMerField tesco
Source: Assosia. Notes: The fgures represent featured and secondary promotional space across the uks leading
supermarket chains, including hot spots, power aisles, free-standing display units, gondola ends, seasonal space
etc. for further information contact kay staniland on 01708 444840 or see www.assosia.com
2.2%
1.6%
1.1%
0.4%
3.9%
4.5%
1.6%
1.8%
4.1%
3.4%
2. Cadbury showed the greatest increase in branded promotional activity as a percentage of the cakes and
pastries category n Oct 06 - Sep 07 n Oct 07 - Sep 08
35%
30%
25%
20%
15%
10%
5%
Mr kipling Mcvities cadbury Fabulous
bakin boys
lyons
28%
32%
26%
19%
10%
15%
12% 12%
9%
5%
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cakes & biscuits
However, there are still a number
of very poor products available, which are
damaging the categorys reputation and
deterring repeat purchases, warns Woods.
Household penetration of free-from
cakes and biscuits is already nearly 25%
[TNS 52w/e October 2008], which is an
increase of nearly a third compared with a
year ago, although it still leaves plenty of
room for growth.
Nutrition Point, another big player in
the free-from arena, which offers cakes and
biscuits under its Trufree brand, says a key
issue facing the sector is a lack of space on
the fxture. Ultimately, free-from foods
are likely to sit alongside mainstream
equivalents, says managing director Chris
Hook. In the meantime, retailers need to
choose brands and products wisely.
Nutrition Point relaunched its portfolio
last month with revamped packaging and
NPD, including brownie and cookie bites
in resealable tubs and retro-style Choc Dip-
pers pot snacks.
Our research shows that people who fol-
low a wheat and gluten-free diet are often
most likely to miss sweet things like cakes
and biscuits, says Hook. With as many
as 45% of people suffering from food intol-
erances, we are anticipating strong future
growth from this sector.
Own label is also getting in on the free-
from act. Asda introduced a 100-strong
free-from range, which includes cakes and
biscuits, this February. The supermarket
says there has already been strong demand
for the range from people with and without
food intolerances.
Yet, according to Hook, brands have got
the strongest hand.
It is easy to underestimate the brand
loyalty that exists in this sector, he says.
But, when it comes to their health, con-
sumers will often rather go without rather
than buy a product they dont know and
trust. n
T
he star performer last
year in the biscuit market
was arguably Cadbury
Fingers, which is produced
under licence by Burtons
Foods.
Sales of the total brand
were up 20% to 35.5m,
according to Nielsen, after an
8% decline the previous year.
The chocolate biscuit
was helped by aggressive
promotions, which have
seen the price reduced by as
much as 70%. This has helped
to attract new buyers and
increased shopping frequency
from 1.9 to 2.2, Nielsen
Homescan shows.
However, NPD has
also helped. The strong
performance from the mini
bags variant increased sales
by 16% to 2m last year
according to Nielsen.
And Cadbury Fingers are
now available in 10 varieties,
including honeycomb, white
chocolate, dark chocolate
mint, giant and gift tins,
which include mixed biscuits.
A new limited-edition
variety, Cadbury Toffee
Crunch Fingers, was launched
in March 2008 following a
consumer poll. It was the
fourth new favour to be
developed in the past three
years.
The dark chocolate limited-
edition variant launched in
2007 has now become a
permanent fxture.
Fingers also benefted from
the halo effect of Cadburys
multimillion pound marketing
investment in Dairy Milk,
including the much-praised
Gorilla advert, with its purple
packaging regarded as a
brand signpost in the special
treat segment according to
Burtons.
Cadburys Fingers also
look set for a good future
in the credit crunch and are
ideally suited to a number
of other trends: as well as
portion control, mini-treats,
portability, dunkability,
nostalgia and simple comfort
food, they even suit the new
craze for home-baking as
they make excellent cake
decoration material.
Burtons Food is currently
looking at ways of capitalising
on the brands success by
extending it to other formats.
Mini bags boost perForMance oF cadbury Fingers
Sales director Dave Pickup once
ran the London marathon dressed
as a cherry bakewell. He completed
the race in just over fve hours,
particularly impressive considering
his costume weighed 35lb. And
with this level of dedication to the
cause he helped achieve double-
digit proft margins in the cake
division at Manor Bakeries.
and finally...
dave pickup joins p-p-p... penguin
So how will he fare at UBUK,
which he joined in July this year?
It should prove a piece of cake.
For what buyer could refuse to
purchase more P-p-p-penguins
from a man named Pickup?
He has some work to do, mind,
as sales fell by 8% last year [Top
Products/Nielsen 8 October 2007],
while sales of UBUKs leading
brands, McVities digestives and
McVities Jaffa Cakes have stalled.
Pickup is confdent they will, er,
pick up in the credit crunch.
When consumers are shopping
on a budget they tend to stick with
what they know, he says.
In the meantime, if you see a
waddling Penguin at next years
marathon, youll know who it is.
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