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Biscuits & Cakes Market Report Plus 2010
Key Note Publications Ltd, March 2011, Pages: 94
This report examines the UK retail market for biscuits and ambient cakes. The authors estimate that this market grew each year between 2005 and 2009, to a value of £3.38bn. While the food market as a whole has tended to outperform other sectors during previous recessions, the value increases that have taken place since 2008 have been driven largely by higher costs, feeding through to retail prices. Volume sales have outperformed value.
The squeeze on consumer spending caused by the recession brought with it a focus on price. Although sweet foods are often regarded as affordable indulgences, prices for biscuits and cakes still became more competitive. Discounted prices, extra product free and similar activities allowed consumers to shop across promotions, rather than reinforcing loyalty to particular brands. The successful introduction of tertiary branding and the extension of value own-brand ranges also served to erode price points.
However, suppliers have continued to develop products and brands to add value to the market. Snacking and `on-the-go' eating have remained important influences, with more miniature products being introduced. Individually wrapped products have been created for lunchboxes, snacking and solo eating. There has also been development in `sharing' packs of miniature products, targeting occasions such as the `big night in'.
Healthier products account for a large share of sales and there has been further innovation in this sector, with new products introduced under brands such as Go Ahead! and WeightWatchers. Some standard products have also been given healthier recipes through the removal of artificial additives or the substitution of certain ingredients with more wholesome alternatives.
The market continues to be dominated by the brand portfolios of major manufacturers such as United Biscuits, Burton's Foods and Premier Foods. In 2009, Kraft Foods invested heavily in its Oreo brand, while Nestlé continued to give heavy support to its market-leading KitKat brand. Kellogg's also widened its branded cereal-bar range during the year.
As the economy emerges from recession and levels of promotion fall off, price points in the biscuit and cakes sector are likely to rise. This will enable further investment in new product development by manufacturers and will form a good basis for a recovery in market values.
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