Olivia Gagan on how you can boost your sales in the biscuits & cakes category at a time when concerns over excessive sugar consumption and the trend for healthy eating both continue to rise.
Dunking a biscuit in a cup of tea, enjoying a slice of cake mid-afternoon, or buying a sweet treat at a coffee shop are well-loved rituals up and down the UK. There is no doubt the biscuits & cakes category is well-established – but it is also one which is undergoing key shifts in consumer behaviour, and facing growing government scrutiny.
Public Health England is challenging manufacturers to cut the amount of sugar in food products by 20% by 2020. Consumers, too, are increasingly demanding a wider range of products to choose from, from luxury to low-calorie and free-from ranges. Cakes and biscuits may sound like an easy sell: but you need to choose your products carefully if you are to make maximum gains.
A rocky road
The success of The Great British Bake Off gives a hint of how much cake is an intrinsic part of the UK’s cultural identity. Kantar research estimates that the UK retail take-home cake market is worth around £1.5bn, and the body values the out-of-home cake market at £1.5bn – suggesting around £3bn of cakes are sold every year in the UK.
It is a sprawling category, and the type of cakes consumers are seeking out is changing. Claire Hooper, head of marketing for cake at McVitie’s Cake Company, says cake consumption is shifting away from a traditional evening dessert or afternoon tea occasion, and is increasingly consumed as an informal snack – which means you should stay on top of evolving product sizing in preparation.
Instead of buying a whole cake to be cut up and served at home, single-portion-sized products are increasing. “As a result, we are seeing declines in some of the more traditional sponge-based cakes and the growth of more modern and interesting products such as tiffin, rocky road and biscuit-based slices,” Hooper says. Such products all have something in common – they are hardier and often have a longer shelf life than sponge cakes. They can also be easily packaged as single servings and tucked into a bag or pocket whilst on the move.
This could be a boon for foodservice wholesalers, as consumption out of home, in places such as coffee shops and train stations, is also on the rise.
The health and wellness trend continues to have an impact on the cake category. Health-conscious shoppers are choosing to eat cake less often, or are switching to different types of products. Hooper says that “some shoppers are switching out of other snacking categories, and into cake products that are perceived as a healthier option than a traditional cake or confectionery product.”
Products that offer greater portion control or smaller portion sizes are therefore performing well – making cake bars and slices important product types to consider. “Flapjacks are one of the primary winners of this trend,” Hooper notes.
Steve Kelly, channel director at Premier Foods, which supplies Cadbury Cakes, Lyons and Mr Kipling products, adds: “It is the role of suppliers to ensure they are offering a range of products and formats to help with portion control and wholesalers in turn must consider this when making purchase decisions.”
Jon Turonnet, foodservice sales manager at Brioche Pasquier, believes interest in health-oriented products is only set to grow. “The demand for lower-sugar products and lighter cakes and biscuits is well and truly established, and will become even more pressing as the year progresses,” he says. He advises stocking a range of products that meet the demand for lower-calorie cake. “Smaller and lighter sweet options such as macarons offer a sweet option without a vast amount of calories, and small bites or mini-desserts offer a way for consumers to enjoy a sweet treat without resorting to a large slice of rich and sugary cake,” he notes.
That said, Turonnet does not advise abandoning core lines and richly-flavoured products completely. “There will always be demand for indulgent cakes and biscuits that have the feel-good factor,” he advises. “The key is to make sure that you offer operators real choice when it comes to sweet options.”
Hooper agrees. “We are also seeing the quest for indulgent experiences affecting the cake category,” she says. “Consumers are increasingly telling us that in the quest for a well-balanced diet, while some choices are influenced by healthier needs, they still want a little treat now and then.
“The change we are now seeing is that these treats really have to deliver ‘value for calories’, with an exciting, multi-dimensional taste and texture that is worth it, particularly later in the day, when treating ourselves becomes more important – especially if we are sharing with others.”
She suggests stocking a wide range of contemporary cakes in smaller portions, as well as both individually wrapped and shareable formats to meet varying needs.
Slam dunk
As a nation, we buy biscuits nearly every week, with the average household in the UK shown to purchase them on 44 different occasions throughout the year, according to Nielsen data.
Totalling £2.3bn (Nielsen), the UK’s biscuit market comprises three main sectors: sweet, healthy and savoury. Sweet holds the lion’s share, with £1.4bn of sales. The savoury biscuit category (excluding crispbreads and crackers) comes second, and sales in this area are on the up, with over 20% value growth in the category over the last two years. Despite being a relatively recent development, health-focused biscuits also take a significant share of the market, with a value of £485m.
In this in-flux market, which products should you pick? New pack formats, textures and flavours will no doubt continue to emerge as consumers demand a fresh, engaging offering from suppliers. However, it is important to note that despite this desire for innovation, only 4.7% of total sweet biscuits sales in the UK have come from new products.
Susan Nash, trade communications manager at Mondelez International, says that as trends within biscuits may come and go, wholesalers should make existing bestsellers from household names a priority. “Stock bestsellers from the sweet, healthy and savoury biscuits sectors, and ensure the most popular brands are represented to appeal to the largest range of customers,” she advises.
Instead of trying to chase micro-trends, Hena Chandarana, trade communications controller at Pladis, suggests you should maintain a biscuits offering which can meet a range of different consumer moods. “Our research shows that often, we snack to meet an
emotional need, rather than a physical one,” she says. “Around a quarter of the time, snacking is about sharing a connection with others. We also snack to reward ourselves, perhaps after a hard day. We will miss an opportunity if we do not acknowledge that people snack for emotional sustenance as well as for purely physical nourishment.”
Of course, guessing at consumer moods is never easy – but there are a few overarching themes in the category that can help guide your stock choices. Share-bags and bite-sized biscuits are growing in popularity, for instance. With 44% of UK adults planning more quiet nights in, according to Nielsen, sharing and more indulgent treats are becoming an increasingly important part of the category. Consumers also increasingly crave an affordable daily pick-me-up. The everyday treat segment, worth £432m, is currently driving the category and this is set to grow further.
Sharing is also on the increase outside of the home, in offices and on transport. Pladis has responded by releasing McVitie’s Digestives Nibbles, capitalising on the UK’s appetite for highly-established biscuit brands but also pushing the product forward to meet new consumption trends.
Health concerns are also filtering in to the biscuit category. To provide options for consumers hoping to cut calories, ‘thins’ – thinner versions of classics – are rising in popularity. They are emerging in the growing savoury segment, too, also driven by health trends. Chandarana says: “With bread-based sandwiches in decline, we are seeing consumers moving to lighter options such as crackers, representing a strong growth opportunity.” An example of a new product hoping to satisfy this demand is Pladis’ Jacob’s Ciabatta Crackers, which aims to combine the taste of ciabatta bread with the crunch of a cracker.
The biscuit category will continue to evolve over the next few years, as trends for sharing, everyday treats and healthier variations on classic products continue to make their mark. Stocking sizes and options which meet these new moods and occasions is important – but as Chandarana and Nash point out, as a nation of biscuit lovers, offering a wide line of old-fashioned crowd-pleasers will remain important to making the most of this category, too.
