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Outperforming the market
2009 | Filed under Previously Featured | (0) 
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According to the Biscuits & Cakes Market Report Plus 2009 report by Research and Markets, which was published in May 2009, the UK biscuit market experienced year-on-year sales growth in the four years from 2004 to 2008 to reach a value of £3.22 billion and, despite a slowing of recent growth levels, is anticipated to be worth £3.66 billion by 2012.
As with so many other areas of the food market, a key driver in the cakes and biscuits category in recent years has been healthy eating and brands that have offered reduced fat and reduced calorie options have benefited from consumers who still like to indulge their taste for sweet foods but can do so without feeling guilty. The same applies for products that have replaced hydrogenated fats, artificial colourants and preservatives in their recipes.
Convenience has also been important in encouraging higher spending in the biscuits and cakes sector. In biscuits there has been a rise in formats, such as portioned biscuit, resealable tubs and tubes and share packs, in order to target different eating occasions with tailor-packaged products. In the cakes sector, much of the market increase has been motivated by the success of small and individual-serve products, whether in multi-pack format or individually packaged for impulse sales. An additional motivation behind this move by cake and biscuit manufacturers has been to enable their brands to compete more directly with products such as confectionery.
SHOWING STRONG GROWTH
While consumers are currently facing more stringent economic times, cakes and biscuits are regarded as relatively low-cost treats and are possibly more immune to consumers cutting back than may be the case for some other categories. Indeed, some may choose to take a more indulgent attitude towards spending in this sector as they trade down in other areas, especially staying in rather than going out as often as they may have done in the past.
This view is confirmed by Trevor McCrum, United Biscuits Northern Ireland Sales Controller, who commented: “The biscuit category, which is worth £19m in the Northern Ireland symbols and a massive £2.2bn across the UK, is one of the grocery market’s largest categories. It is also one of the few categories showing strong growth in the current environment, with the Northern Ireland symbols market performing particularly well, posting value growth of 11.6 per cent as compared to last year (data 52 w/e March 2009 PS&A).
“For UK shoppers, biscuits are a cupboard staple, with more than 96 per cent of households buying biscuits every year. In Ireland it’s even higher, with 99 per cent of households buying biscuits annually. This means that more households buy biscuits than any other food, including bread and butter,” continued Trevor.
“There has been a particularly strong performance from established favourites such as McVitie’s Digestives at +26.5 per cent and McVitie’s Rich Tea at +15.8 per cent, while Penguin Wafer is the most successful new product with £172k sales in the last year and has been the biggest source of growth in the market in the last 12 months.
SECTOR PERFORMANCE
Asked how the biscuit market is classified and how the different segments are performing, Trevor continued: “There are eight segments in the biscuit market – Chocolate Biscuit Bars, Everyday Treats, Everyday Biscuits, Special Treats, Childrens’, Healthier, Crackers & Crispbreads and Savoury. All segments are experiencing growth, most noticeably Everyday Treats such as McVitie’s Chocolate Digestives (+24.6 per cent) and Everyday Biscuits such as McVitie’s Digestives (+17.1 per cent). The Healthier segment also continues to perform very well with an increase of 10.9 per cent. Premium brands are slowing but we’re seeing these sales being picked up by products such as McVitie’s Chocolate Digestives, which offer good value for money.
Bill Godfrey, Sales and Marketing Manager, Graham’s Bakery, outlined the performance of the cakes sector: “Small cakes and buns are enjoying a relatively high level of activity at the moment within the retail sector. The market tendency is towards a demand for multi-packs, added value packs and £1.00 lines. You only have to take a look at the array of product currently available in stores from a broad base of suppliers to confirm this trend.
“Large cakes, speciality and high end products are experiencing a lower level of activity in the marketplace. As these products can be perceived by the consumer as a luxury spend or, indeed, an impulse buy, this is affected when money is in a short or restricted supply – for example, during a downturn in the economy - and this tends to influence the market trends.”
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